|Reed Hundt: Director of the Day|
Reed Hundt was chairman of the Federal Communications Commission (FCC) from 1993 to 1997, during which the Telecommunications Act of 1996 was passed into law. While the law arguably helped encourage further development of information technology, it included a major concession to the industry, allowing television stations to broadcast on digital airwaves for free. These frequencies could have been auctioned off for tens of billions of dollars. Shortly after leaving the FCC, Hundt served as a senior advisor to McKinsey & Company from 1998 to 2009. In 2008 and 2009 he was a member of Barack Obama's Presidential Transition Project's Agency Review Working Group, where he was responsible for international trade and economics agencies.
Today, Hundt is the CEO of the Coalition for Green Capital, a renewable energy non-profit, and Principal of REH Advisors, a consulting firm. He is also a senior advisor to the law firm Skadden, Arps and to GTCR, a Chicago-based private equity firm. Hundt serves on the advisory board of the Yale School of Management. He completed his bachelor's degree at Yale in 1969 and graduated from Yale Law School in 1974.
Hundt has been a director at Intel since the company's 2001 annual stockholders' meeting. During his time as a director, the value of Intel's stock, both in real terms and relative to the S&P average, has fluctuated considerably. CEO and director pay, however, did not mimic these changes of fortune. In 2008 the company's stock price fell by 39 percent from the beginning to the end of the year, and while the S&P average fell that year as well, Intel's performance was worse. Yet CEO Paul Otellini's compensation increased from $12.3 million in 2007 to $12.4 million in 2008, after which it climbed at a much brisker pace. During this time Hundt was the chairman of the compensation committee, and his own pay rose from $209,100 in 2007 to $346,100 in 2008. In 2012, when Intel's stock price was 13 percent lower at the end of the year than at the beginning, whereas the S&P average climbed more than 10 percent, Otellini's compensation rose 8.6 percent, from $17.5 million in 2011 to $19 million in 2012. (By 2011 Hundt was no longer on the compensation committee.)
From February 2007 through May 2010, Hundt was also a director of Infinera, an optical telecommunications company. Infinera, which had been privately held since its founding in 2000, went public in June 2007; it's IPO price turned out at $13 per share, outpacing the forecasted $10 to $12. Since then, the company's shareholders have had little to cheer about. By the time Hundt stepped down from the board, Infinera's stock was trading below $8 per share. Jagdeep Singh, the firm's CEO, stepped down at the end of 2009. That year, Infinera's stock fell in value even as the S&P average grew by 20 percent and the NASDAQ average rose by nearly 40 percent. Nonetheless, including his severance pay, Singh received $6.2 million in total compensation in 2009 (he made $2.1 million the previous year). Furthermore, Thomas Fallon, the Chief Operating Officer who was promoted to succeed Singh as CEO the following year, received $7.7 million in 2009.