Are Minorities The Hardest Hit By This Theft?

Earlier today your eq65 editor spoke with a former Embarq central office technician about the way minorities were treated at CT&T before Affirmative Action hiring and promotion practices.

Basically we wondered why a black man always seemed to be assigned to cleaning buildings and lifting heavy things. Suddenly, we both realized that many minority families will be hit especially hard by Embarq's theft of life insurance, removal of medical benefits , and even the removal of the corporate-matching program.

Years of doing the hard work, with much less pay, was to be rewarded these workers at their retirement. The pensions at retirement would be smaller in comparison to other retirees, but the medical and life insurance would make years of cleaning offices worth it.

The man I spoke with today remembered hearing something telling from the janitor. In essence, "My supervisor can't pay me a lot, my raises are small, but at 65 I'll be sitting pretty!"

He never thought of leaving for better pay, I guess.

I know that many African-Americans are executives at Embarq today. But that wasn't always the case. Ask around.

Years of unequal pay makes minority retirees particularly insecure today, because they are less likely to have disposable income to pay for health care. And without meaningful life insurance, they are not afforded a decent funeral. The sad thing is - they held on to those promises through years of assurance - only to see them stolen today - and when they need help the most.

So tonight I'm praying for the minority families affected by Ned Holland's decision. He's a greedy man. And I'm not about to let this go on without writing about it here.

Follow-Up: Options Sold As Part of Divorce Settlement

A frequent reader did some research on the previous story posted here at eq65 (see below) concerning Embarq's Senior V.P. of Human Resources and his recent stock sell-off. Here's what he found...

According to the SEC filing, Ned Holland was forced to cash in half of his options due to a divorce settlement. Read the Form 4 filing here...
http://www.sec.gov/Archives/edgar/data/1350031/000118143107067274/xslF345/rrd177505.xml

From the notes on the Form 4: "Mr. Holland exercised 50% of his vested in-the-money options and sold the underlying shares pursuant to a property settlement agreement with his former spouse."

Mr. Holland did not include any explanations with his May 2007 exercise, seen here...
http://www.sec.gov/Archives/edgar/data/1350031/000118143107030607/xslF345/rrd157635.xml
One can assume that this sale was also a part of the settlement.

So if you have been wondering whether Mr. Holland is on his way out the door, then put those thoughts aside. It looks like he will be at Embarq for a while longer - and greedier than ever.

His 'ex' gets half!

Ned Holland Cashes In More Stock Options

E.J. 'Ned' Holland cashed-in a lot of Embarq management stock options this week. The gross sale was $1,463,039 It is hard to figure the exact profit made with the sale, because the options were purchased for amounts between $15.37 and $33.86 per share. He sold 27,408 shares at $53.38

If you do the math on the numbers, he netted somewhere between $1/2 million to $1 million.

So why would a Senior VP at Embarq unload these valuable options now?

Only three reasons come to mind:

• First - He really needs some cash right now. Maybe he has some personal debt that he wants to pay off, like a court settlement. Or maybe he wants to finish making payments on some real estate. He may want a building named after himself at a college, so he could have cashed-in for charity. He may even want to fund a study on Medicare and retirees! But whatever he wants to do with the proceeds, he needs the cash NOW.


• Second - Mr. Holland may want to shift some of his assets to a retirement account or another investment - one that offers a better return than EQ stock.


• Third - He may think that 53.38 is as high as EQ will trade for awhile, so he cashed-in while he could. If that's what he thinks - then Ned Holland is the wrong man for the job of Senior VP of Human Resources.

Please understand that stock options are not 'Free Money'. Any sale directly affects a company's bottom line. For more info, see Employee Stock Option and Insider Trading at Wikipedia...
http://en.wikipedia.org/wiki/Employee_stock_option
http://en.wikipedia.org/wiki/Insider_trading

He also cashed-in earlier this year. See...http://biz.yahoo.com/t/62/7073.html

The cash going to Mr. Holland this week comes right out of the expense budget at Embarq, just like your stolen benefits would, and decreased life insurance. That means he gets money that was supposed to go to you.

So while Mr. Holland belittles Embarq's retirees, raises premiums on those with jobs, and steals life insurance plans from their families, (all while screaming, "Competition! Competition! Competition!") - Isn't it nice to know that he, Ned Holland, the man that pulled the trigger, took home all that cash this week?

What a nice guy.

You Cannot Shrink Your Way To Greatness

Apparently Wall Street is not happy that Embarq's management has confessed to giving up its fight with cable and wireless. EQ stock started off today at 56.50 and as I type this note, it is at 54.50. A loss of $2 per share.

The comments that Mr. Holland made yesterday are the only thing that I can find suggesting this selloff...“We are not going to wait until we have a problem to do the right things... We are doing them in anticipation of remaining competitive.”

That "in anticipation of" statement signals that he believes Embarq can't compete in the future, and that problems lie ahead. Mr. Holland may be thinking, "We have to let people go, because when won't have as much business."

But Wall Street investors perceive a dying company that is casting off newly unneeded manpower.

Regardless of the reason for the sell off, Embarq's executives like to make big announcements like this before quarterly conference calls. It shows investors that they are getting things done - no matter how poor the decisions are. The next call is November 1st. Expect more big announcements before the call.

Your editor read an interesting anonymous post at kansascity.com...

I have never heard anything good about EJ Holland. He ran Payless Cashways in the ground. He was a hatchet man for Sprint. All he cares about is his own pocketbook and has no compassion for anyone. Talk about an ego!

Well, the truth is Mr. Holland personally lost lots of cash today. So did a lot of other investors. Embarq needs to grow. Not shrink. Investors know this fundamental fact.

Because you cannot shrink when you face competition.

Embarq Calls For Voluntary Workforce Reduction

A letter was distributed throughout Embarq's Network Services group last Tuesday advising them that preselected employees have been chosen to voluntarily resign. Apparently these people would get a sweetened deal to step aside for the good of the company. The Kansas City Star broke the story to the internet today at...
http://www.kansascity.com/business/companies/story/328500.html

Now that this story has been outed by the traditional media, eq65 can share with you a copy of the note that went out to Embarq's Network employees:

From: May, Frank H [EQ]
Sent: Wed 10/17/2007 6:30 AM
Subject: Workforce Reduction - Voluntary Separation

Dear Colleagues:

Since launching EMBARQ, we have focused on continuous improvement and innovation in our products and processes to become an increasingly stronger competitor. As part of that focus, we’ve benchmarked ourselves against industry leaders to determine where we need to improve.

Our findings have made it clear that in order to compete, we need to operate more efficiently and will be taking deliberate actions to reduce our cost structure.

As one element of this cost reduction, we are offering the opportunity to voluntarily request separation benefits to selected eligible employees in Network Services. Employees who are part of an eligible group are being contacted by their supervisors today. If you are part of an eligible group, you will receive information by close of business today (Wednesday, Oct. 17). This is a personal decision, and we fully respect any interest you may or may not have in this opportunity. Please understand, though, that your voluntary request is not an indication nor guarantee that you will be approved for this offer. Each request will be carefully reviewed against the best interests of the business.

If you are not contacted by the end of today, you will know that you are not eligible for this opportunity. Please note that we are not accepting requests from employees other than those specified.

This announcement may cause uncertainty within our group for a period of time, but I know I can count on all of you to remain focused on meeting our commitments and continuing to provide great customer service.

Thank you,
Frank

Remember that anything offered to the ones chosen to go is not guaranteed.

Embarq has proven that it can not be counted on to keep its word. For example, many took early retirement in 1999 with pages of promises that turned out to be meaningless.

For those thinking about leaving:

Checking the small print on the documents given to you recently is worthless. Embarq can still take your benefits, and then refer you back to the small print in your employee handbook.

If you are at work now, find this handbook and read the legal info in the front. This book apparently gives Mr. Holland and others the ability to take any benefit from you at any time without warning or having to show just cause. Even if you are no longer an employee!

So if the separation document that you have been given reads that you get 2 weeks pay for every year that you have worked, don't believe it.

And if the separation document reads that you get medical coverage for a certain period after you leave, don't believe it.

Whatever promises the separation document makes is yours until Embarq takes it away.

My advice, for whatever it's worth, is to get a lawyer before signing anything. Maybe you can add a sheet stating the obvious: Embarq cannot remove these promises without retribution.

Embarq isn't the same company that it was 10 years ago. You just can't believe anything that they say to you anymore.

Even when it's in writing.

Kansas Board Makes Medical Care Proposals

As posted here earlier, the State of Kansas has formed a committee to reform health care in the state. Embarq's Senior VP of Human Resources, Ned Holland (left), is a member of this group, the Kansas Health Policy Authority.

Part of the challenge before them was to reduce the cost of health care for businesses and individuals and to reduce the number of uninsured Kansans. Any effort to achieve these goals should be applauded.

However your editor believes that corporations, such as Embarq, would like to let the government handle retiree health care completely and before 65. A scenario such as that would let companies off the hook for billions of dollars in retiree liability.

Companies should not be forgiven of a debt they owe to former workers. If at some point the Medicare system does cover all retirees, companies such as Embarq should pay the system for promised benefits and assist its retirees with any changeover - including items that Medicare does not pay in full.

The State of Kansas is right to pursue reform in their state. But having a man like Ned Holland on the board is chilling. If he really cares about the health of Kansans, then why did he yank medical coverage from his company's oldest retirees? Is that benevolence? Or could it be greed?

Here is a part of last Tuesday's Kansas City Star article on the board's progress...

Lawmakers left Topeka last spring vowing that 2008 would be the year they attacked Kansas’ health-care woes.

They directed a state health panel to craft solutions to address the rising cost of health care, which has burdened businesses and sent many consumers into the ranks of the uninsured. There was talk about bold public-private partnerships, universal health care and mandated insurance coverage for children and young adults.

Now, political reality has sunk in.

Gone are aggressive recommendations to require insurance. Gone are ideas to privatize government coverage programs. Gone too are big proposals to offer more government help to the poor and uninsured.

In their place are more modest ideas designed to tweak the existing system rather than reinvent it.

The authors of the recommendations issued this week — board members of the Kansas Health Policy Authority — say that was intentional.

“I don’t think this is nearly enough, that it goes far enough,” said board member E.J. “Ned” Holland Jr., senior vice president for human resources at Embarq Corp. “… In the end we must give something to legislators that is realistic. We’re not going to make fundamental change.”

The board finalized the recommendations Tuesday.

The list will be presented to lawmakers next month, ahead of the start of the legislative session in January.

Already, two of the most striking recommendations — a statewide smoking ban and the 50-cents-per-pack cigarette tax boost — appear doomed. Both ideas have been pitched before...

Read the entire story here...

http://www.kansascity.com/news/politics/story/320545.html

Background Info On Ned Holland, the Man That "Pulled The Trigger"

Ned Holland is the senior vice president of human resources at Embarq. According to Embarq's website, "Holland is responsible for... employee and labor relations, talent management, compensation and benefits, employee experience, corporate security, and real estate."

He leads the team that is stripping retiree benefits on January 1st, as well as the recently stripped insurance cash.


Surprisingly he is on the board of the Kansas Health Policy Authority, which is responsible for developing health reform options for the governor and legislature.

See it here...http://kansas.google.nicusa.com/search?q=cache:QqCNk3JvmnwJ:www.khpa.ks.gov/AuthorityBoard/Advisory%2520Councils/ProviderCouncil/050307SB11SUMHouseSub.pdf+S.B.+11&access=p&output=xml_no_dtd&ie=UTF-8&client=kansas&site=khpa&proxystylesheet=khpa&oe=UTF-8

From the Who's Who section of the KHPA site...

Well-known for his outspokenness, Holland is convinced the nation is “inexorably” headed toward a national, single-payer health care system. “It’s just a matter of time,” he said.

Holland half-joked that he’s not opposed to amending Medicare by “simply taking out the number 65. Pretty simple.”

He questions the role of insurance companies in achieving meaningful health reform. “Insurers are just resellers, they add no value,” he said. “When you’re big enough — like we were at Payless Cashways and Sprint (former employers) and like we are at EMBARQ — you don’t need them. Here at EMBARQ we buy direct from doctors and hospitals, we have contracts with doctors groups and we have contracts hospital groups. We don’t buy through an insurance company. So we cut out the middleman, cut out their profit and their margin and we return it to our beneficiaries who, in this case, are our 20,000-or-so employees.”

Kansas, he said, can do the same thing. “The State of Kansas is bigger than EMBARQ, bigger than Sprint. And if we’re actually going to buy health care for all Kansans, the State of Kansas is plenty big enough to do that.”

...

History is loaded with reform efforts that have collapsed under their own weight. There’s no better example, he said, than the Clinton administration’s failed push for universal health care in 1993-4. “I’m one of a very few people who actually saw a copy of the (proposed) statute,” Holland said. “It was 1,300 pages. It was impossible to read, way too complicated. Every special interest group wanted their bauble hung on the Christmas tree. You can’t do that and come up with coherent policy.”

Holland said Americans spend way too much on health care. “We spend more per capita — and a higher percentage of our gross domestic product — on health care than any other country in the history of the world. And the next closest country spends about half of what we do,” he said. “And yet our outcomes put us worse than 30th in the world in terms of performance, things like infant mortality and low birth-weight babies. The big picture is just appalling.”

Holland cited a recent RAND Corp. study that found that Americans get the health care they need about 55 percent of the time. “You know what?” he said. “The airlines deliver baggage better than that!

We’re spending way too much money on things that don’t produce results. We need to stop doing stuff we don’t need to do.”

Physicians, too, are part of the problem. “In no other society does the medical profession make as much money — compared with the rest of the population — as it does here.”

...

"(At EMBARQ) we have 20,000 employees, give or take a few, in 40 states and we operate subsidiaries in 18 states.”As EMBARQ’s senior vice president for human relations, Holland said he spends between $125 million and $150 million a year on health care. “We’re modest spenders,” he said.

...

Holland spent 32 years on the Truman Medical Center board of directors, including a stint as chairman. He is a past chairman of and general counsel for the Kansas City Area Hospital Association, which later merged with the Kansas Hospital Association. He has served a three-year term on the Children’s Mercy Hospital board’ 15 years on the hospital’s finance committee. He lives in Missouri.

See the complete biography here...
http://www.khi.org/s/indexp.cfm?AID=527

If you live in Kansas, the idea that this man is helping set policy in your state ought to scare you to death. The government will run health care. Doctors won't be able to drive down Interstates 35 and 70 fast enough to get out. Hospitals will fold or be sold. Specialists? Well, they won't be in Kansas, either. However, lawyers will still be there to help you sue the doctors or hospitals.

Because that's what Mr. Holland is - a lawyer.

Notice that, Mr. Holland didn't say that lawyers were a part of the problem. He blames the physicians, whom he says make too much money. Actually, many lawyers make a heck of a lot more money than physicians because they don't constantly get hit with frivolous malpractice lawsuits.

Trial lawyers are jealous of the cash the MD's have. They really can't grasp that there is another group of professionals that might make as much money. So they have been going after them for the past 20 years. Ask your family doctor about lawyers. See the response that you get. And while you are talking to them, ask about their insurance bills, legal bills, and whether or not they have finished paying for medical school. Go ahead. Call him or her today.

Not all lawyers are ambulance chasers or doctor haters. But this one, Mr. Holland, wants to set policy for the entire state of Kansas. And he lives in Missouri!

And notice that he says Embarq is a modest spender on health care. So why does he rip out health care from his unions and other workers every year? Why did he take your life insurance? Why is he ending your health care benefits at 65? Why? Could it be greed?

Your editor's biggest fear is that Mr. Holland believes the problem with Medicare is the number 65. You can assume that means he wants the government to spends its cash to provide health care for everyone that has retired, not just those that have reached the age of 65.

And this is where even the most right-wing capitalist Republican Embarq executive suddenly becomes a progressive Democrat. I assume the thought process is, "We can make even more money if we shove all of our retirement liabilities over to Uncle Sam. We'll be rich!"

As a proud American taxpayer, that school of thought just burns me up. I can't print here the words that are flying through my mind about this theft of not only retiree's earned benefits, but of money from the government (my tax dollars) that Mr. Holland wants to replace it with.

Don't back down from this fight retirees!

Those are your earned benefits! They were promised to you, and now Mr. Holland wants to weasel his way out of keeping those promises by getting the government to cover the liability.

Yell about this as loud as you can, right now!

And if you live in Kansas, read your newspapers everyday. A Missouri lawyer wants to destroy your health care system. You saw it here, first.