The Milgram Experiment in Crony CEO Capitalism, the Commonalities Between Enron and SuperMedia

September 11, 2010

Stop the Stock Scam by Crony Executives at SuperMedia and Verizon

In the early 1960’s Stanley Milgram, a scientist, wanted to uncover what kind of common characteristics existed in evil people. So he set up an experiment with an actor playing an experimental subject and a real experimental test subject. The real subject would ask a question to the subject (the actor) and then if the subject got the question wrong the real test subject would shock the actor with an “electric charge”, so long as the scientist, an authority,would reassure the test subject that what he/she was doing was the right thing. The electric charge was not real, the actor would scream out in pain as the test subject would increase intensity. Approx 50% of the test subjects tested would continue the shock treatment on the subject to the point of death.

This experiment is a classic example of what is wrong with evil corporations and crony executive leaderships. Test subjects or loyal sycophants will do anything, as long as they have the encouragement of the superior or authority figure.

For 10 years I was a participant in an industry that had an Enron style corporate culture. Regardless of what happened to clients, shareholders, and employees not in management, executives would continue to demand people stay the course. Executives, like Scott Klein the CEO of SuperMedia, had zero investment in the company. Employees who understand the business were told to “shut-up” and agree, accept, and fulfill the changes the new CEO was making. Regardless whether or not these changes are in the best interest of shareholders, employees, or the future of the organization.

Being a corporate leader requires the utmost ethical conscience, honesty, and fraud prevention and corporate crime policing.  Whistleblowers are to be respected and given a podium to speak from.

When the SEC began investigating Enron, Ken Lay reaffirmed traders and other employees that he and the company were frauded by “Andy” Fastow, yet the companies auditor Arthur Anderson was busy shredding evidence of wrongdoing. Ken Lay the Enron CEO shifted all responsibility to Andy, traders, the Government, and anyone else besides the executive leadership.

Jeffrey Skilling told employees to “invest your 401k” into Enron stock while he committed fraud. Skilling himself moved his money out of the stock. His Milgram Experiment was to keep influencing employees that what they were doing was right. Keep selling. Employees had faith in leadership. Leadership does not “fall on a knife” when corruption is discovered. When Scott Klein from Idearc met with employees, while being aware of his bankruptcy plans for the company, he assured employees and investors that the spin-off debt and stock arrangements were “strong.”

In Dallas, at a Fuller Drive meeting, Scott Klein the new CEO of Idearc Media reassured employees that the company was financially sound and had cash on the balance sheet few companies had. Instead of going into detail about the companies longterm plans, Scott Klein proceeded to pander to employees his “7 keys to success,”” a presentation better suited to High School kids.

Atleast, we now know how Mr. DeKlein likes his cocktails.

During the rise and fall of Enron, employees and investors were scammed for more than 20 billion. Just the same, Verizon scammed investors with Idearc stock, as well as FairPoint Communications and Hawaiian Telecom spin-offs. The fraud committed by Verizon, Idearc Executives, and SuperMedia’s CEO Scott Klein will be uncovered just like Enron in years to come.

I respect those who blow the whistle to protect the innocent. Those who are not in leadership or positions of influence. I respect the honest worker who gets up, turns on the pot of coffee and heads to work to do good. I respect the Good Guys, not those that put on a super cape and claim “Good Guy” status.

It is wrong to tell investors you have challenges with receivables yet turn around and increase the credit limitations to clients. It is wrong to tell investors good news while hiding the bad. This is manipulation and dishonest.

Milgram’s experiment emphasizes that leadership is ultimately responsible for corporate culture.

Leadership doesn’t get the axe. Take a look at the 545 folks who run this country. Do they get fired? They work for us voters, yet we can’t seem to fire them and they just blame the bad decisions on co-workers or subordinates.

It’s time to put your big boy britches on fellas. Grab your whistles, proxy statements and voting cards….. Make a CHANGE. It is in your hands. When people are crying out in pain, will you continue shocking them? Do you want the blood of the innocent on your hands? What will you do? I suggest it is time to grab and axe and start hacking away at the leadership team. Time for them to get fired!

(btw, I wonder why would an executive commit suicide? Enron’s executives did after the Justice Department began inquiring about illegal activities. Thousands of people faced with crimes go to prison or face social scrutiny, so why are white collar criminals so spineless that they become suicidal?)

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It is bonus time once again for YellowCrook Scott Klein

April 7, 2010

SuperMedia CEO Pay up Millions while company struggles.

SuperMedia CEO Pay up 30% while company struggles to evolve.

SuperMedia’s Employee Union Members and Non-Union Members want to ask other Yellow Pages Industry Executives if they believe that formerly Idearc Media, the spun off and quickly bankrupt yellow pages publisher of the Verizon Yellow Pages, now called SuperMedia, CEO Scott Klein is fit for his job and whether he has earned his million dollar per year CEO Salary, recent 2 million dollar bonus, recent 9 million dollar longterm stock incentive and 1 million dollar short term stock incentive that he gets to keep once the company is purchased in a deal he struck behind closed doors with Hedge Fund Company Paulson?
SuperMedia purchases Beach Boys for YPA

To SuperMedia Mr. Tom Rogers….  do you have a clue how angry the sales force of the company is? They are scared and angry. Many have been with the company for 20 years and some in the local advertising industry even longer. Since the days of Bell Atlantic and Nynex. You are the CEO of Tivo. You must be paying attention to Google TV, the iPad, Local Search Verticals like Zillow who now offer rental information, and many other great ideas? Why is SuperMedia only selling products that need unmeasurable research from industry sponsored firms like YPA and the Burke study? Do you honestly think the company can afford to pay debt obligations paying sales reps for fraud? Why does Klein continue to manipulate the companies pay plan while planning golden parachute escape with a simple “Change in Control?”

Local Search is not product it is service. Yellow Pages is still used heavily in rural areas and many suburban areas. Do you think the SuperGuarantee subscriptions and impact is sufficient to sustain the company into the future? Why have all of Scott Klein’s internet directors left the company. They do not want to work for him.

If this was not a deal struck in the dark, why have other executives in both local search or yellow pages not follow suit? Why has the man Paulson put on the companies Board of Directors not spoken up? Oh, that is because it is not just the CEO who is raiding the coffers… it happens to be the companies Executives and the board of directors also gets a nice bonus in the process.

I say employees show concern at the next board meeting. I look forward to meeting you there. As a shareholder of the company I am asking other shareholders to voice concerns. If you knew of the corporate frauds of Enron, Bernard Madoff, Acorn, or Countrywide Mortgage ahead of time would you speak up?

Join the conversation at www.YellowCrooks.com

Form 8-K for SUPERMEDIA INC.

5-Apr-2010

Change in Directors or Principal Officers

Item 5.02 Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On March 30, 2010, the Human Resources Committee of the Board of Directors of SuperMedia Inc. (the “Company”) established the performance objectives and other terms of the Company’s 2010 Short Term Incentive Plan (the “2010 STI Plan”) pursuant to the Company’s 2009 Long Term Incentive Plan. The 2010 STI Plan provides for a payment of incentive compensation to each of the Company’s executive officers and to other eligible employees. These incentive compensation payments are determined by the Company’s achievement of specified performance metrics for 2010, based on: (i) EBITDA (earnings before interest, taxes, depreciation, and amortization), which comprises 70% of the total performance opportunity; and (ii) total published revenue, which comprises 30% of the total performance opportunity.

Each of the performance objectives will have a threshold, target, and maximum level of payment opportunity. Achievement of 100% of the performance metrics will result in award payouts equal to the target awards. At 90% achievement for EBITDA and 92% achievement for total published revenue, which are the minimum thresholds for award payouts, award payouts will be equal to 25% of the target awards. At 120% achievement for EBITDA and 110% achievement for total published revenue, which are the maximums, award payouts will be equal to 200% of the target awards. If achieved, awards will be paid in cash during the first quarter of 2011.

The target awards under the 2010 STI Plan for each of the Company’s named executive officers are set forth below:

Named Executive Officer Target Award

Scott W. Klein – Chief Executive Officer $ 1,000,000

Samuel D. Jones – Executive Vice President, Chief Financial
Officer and Treasurer $ 337,500

Frank P. Gatto – Executive Vice President – Operations $ 280,000

Michael D. Pawlowski – Executive Vice President – Sales $ 262,500

KEY INFORMATION for SUPERMEDIA from HOOVERS.com
DUNS Number 787911986
Doing Business As Verizon Drectories Disposition
Company Type Public – NASDAQ (GM): SPMD
Location Type Headquarters
Year of Founding or Change In Control 2006
KEY NUMBERS
Fiscal Year-End December
Sales (mil.) $2,512.0
1-Year Sales Growth (15.5%)
Net Income $8,257.0
1-Year Net Income Growth 4,412.0%
Total Employees 5,500
1-Year Employee Growth (9.8%)
Employees At This Location 10
KEY PEOPLE
Scott W. Klein CEO (Mr. Let Me Rob My Way Out The Door)
Frank P. Gatto EVP Operations
Samuel D. (Dee) Jones EVP, CFO, and Treasurer (Mr. Lets Not Tell Investors About Raising Credit Limits and Collections)
Dave O. Bethea EVP Sales (Mr. Drunken Fight Guy)
Sandra L. Henjum EVP Transformation and Marketing (Mrs. Heading Jumping Director)
SuperMedia — then called Idearc — was spun off from Verizon Communications in 2006.
HISTORICAL FINANCIALS
Income Statement
Year Revenue ($ mil.) Net Income ($ mil.) Net Profit Margin ($ mil.) Employees
Dec 2009 2,512.00 8,257.00 328.7% 5,500
Dec 2008 2,973.00 183.00 6.2% 6,100
Dec 2007 3,189.00 429.00 13.5% 7,200
Dec 2006 3,221.00 772.00 24.0% 7,400
Dec 2005 3,374.00 1,025.00 30.4% 7,100
Dec 2004 3,600.00 — — 7,400
Dec 2003 3,675.00 895.00 24.4% —
Dec 2002 3,760.00 1,095.00 29.1% —
Dec 2001 3,831.00 1,203.00 31.4% —
Notice how he is using sales fraud and collections to pump up the numbers for the company?
This one was requested to be removed. I later learned via email that it was true. I was contacted by SuperMedia to remove it. Someone lied to me. Said that they are filing a suit. I have emails that state otherwise.

Company information:
SuperMedia
United States

I have read many reviews of SuperMedia/Superpages.com from many angry customers that feel that have been ripped off,
but have not really read any solid explanations of why Idearc/Superpages.com is a rip off.

My name is Lisa, I work for the company in Everett, WA and have done the research to know why. It is my hope that by divulging
the truth someone will be able to use the information to take action against this company. I’ve made a lot
of money selling worthless advertising and this is my attempt to make it right.

First off, it’s important to know that SuperMedia/Superpages.com employs a very specific sales tactic that they
refer to as “Salesology.” This is the very basis of all training and as an employee of the company, if you do
not follow this method, you will be repromanded. Salesology is taught to all employees by Jay Hughes
(www.salesologyonline.com). Utilizing this sales method, most customers don’t even realize that they just purchased
advertising. Here’s how it works:

1) A Business receives a cold call and they are asked if it’s “a bad time.”
2) Rep tells them that “We have people in your area looking for (fill in blank) in your area, are you
currently taking on more work/new customers?”
3) Then we ask how much more work they can handle and how much they make per job. Multiply the amount of work by
the profit per job and that’s their gap. Let’s say an Electrical Contractor averages $500 per job and can take on
10 more of those per month. “So, if I were able to help you close that $5000 gap per month in your business,
would it be fair to ask for $500 on the back-end in return?”
4) Customer says “of course.”
5) Almost no explanation is given on how we are going to get them this promised work. We get GTI
(General telemarketing international) on the phone who records the customer agreeing to a 12-month
contract. They are told we’re doing this “To enter them into our database.” Most people have no idea
what just happened, but this is 100% legally binding. Our only goal is to get them through GTI.

In the initial training, they state we’re to find the gaps in small to medium sized businesses and help
them grow. The funny thing is that no matter what state their business is in, no matter what they sell, how
much they make per sale…it’s all the same. The soloution to every business is a minimum $500/month program to
meet their objectives. They don’t really encourage anyone to sell over a $500/month plan because that
requires a signed contract in lieu of a GTI recording. If you sell less than $500 you’re scoffed at, even if the
business doesn’t need it.

So, what does a business get for $500/month? We are told to tell businesses that we are selling “SuperLeads.”
However, these are nothing more than clicks with a theoretical conversion rate. Their collateral even shows how
this works. So, for $500 worth of SuperLeads a business will get 125 clicks with the minimum of $4/click (some
categories are more). They state that, on average, for every 5 clicks, a customer will actually make a call
to the business. $500 should then relate to 25 calls in a month. Again, this is how we are trained and this
is what the collateral we can send out states.

If the above actually worked, then it wouldn’t be a bad deal. However, most businesses will not get any calls
for their $500 per month. Why? Most (at least 90%) of these clicks aren’t even from SuperPages.com, Google, Yahoo
or anything you’ve ever heard of. They are from obscure partner sites that pull out a single keyword from the
business and get the needed clicks to bill out $500. As an example, let’s say a kitchen contractor installs sinks.
Let’s say someone googles “sink holes.” A few wrong clicks and the contractor is out $4. Again, at least 90%
of these clicks have nothing to do with what a business does. The customer doesn’t have any access to
these click reports, and there are no audits done to ensure it’s actually working at all. The fact is that
most sales are made to oversaturated markets where businesses will not get any return on their
investments. We can sell to the same type of business in the same cities as much as we want and tell everyone
“we have people looking for your services.” In all actuality, Superpgaes.com gets little traffic, and if a business
gets even one call per month for $500 they are doing better than average.

Next, is there click fraud going on? (i.e. the company clicking on it’s own ads to turn a profit.) I’m not 100%
sure here. We used to be able to see the IP addresses that were clicking on the ads, but not any more.
In the past, I did random sample searches to cross reference the IP addresses by location and a large amount
of the IP addresses were not even in the same state as the busnisses. Many of these IP addresses seemed to
track back to where Idearc has physical offices. I have asked many times if I click on someone’s ad from work, will
they be charged a click and have always been told no. I’m not so sure about that.

We also sell postcard mailers. When these came out I was excited to sell something that actually works. We are
told to tell customers they can expect a 0.5% – 2.0% return of them. I’ve heard of a few businesses getting
work from these, but I also know of businesses that have sent out 10, 000 cards (at $5000) with zero return.
The artwork on these is generally poor, as they have the sales reps do the basic design and ad copy for
them with very little training. It’s mostly a joke to see just how bad they come out. Many contractors have
actually gotten in trouble from the State because License numbers have to be on their ads. This also is not
audited.

SuperMedia Complaints – The Truth About SuperMedia

Review all Idearc Media complaints

SuperMedia

Posted: 2009-10-21 by IdearcEmployee
The Truth About SuperMedia
Complaint Rating:  75 % with 4 votes