Sour Deal

My letter to Irene Rosenfield, CEO of Kraft Foods:

Dear Ms. Rosenfield:

Your crafty deal to acquire Cadbury chocolates sounds like a sour deal for little stockholders like me.

To acquire all the outstanding shares of Cadbury you propose to issue 370 million shares of Kraft common stock and plus pay Cadbury 4.3 billion British pounds (about 10.5 billion dollars?).

How many candy bars will you have to sell to make a profit on this deal?

With the number of increased shares, the value of common shares in Kraft will go down. You and your board will give yourselves thousands of shares of stock to make up for the loss. Besides, these days the price of stock seems to have no relation to true value.

You will have to cut dividends. Who cares? With your enormous salary, you don’t have to count on dividends to supplement your income.

I only own 300 shares of Kraft, which I bought with money from the sale of my house. I don’t have your enormous salary. I depend on dividends from the stock I own to pay my rent.

You are a typical C.E.O. Your wheeling and dealing makes you richer and richer. Everything you do is legal. The ethical situation is different. You and all the other multi-millionaire CEOs are embezzlers. I wish you could be prosecuted for defrauding your stockholders. Your punishment should be to forfeit your ill-gotten wealth and go to live in a trailer park with no income but Social Security – like so many honest, hard-working men and women.