Martha Stewart still going strong

Last Friday, September 24, 2004, it was annouced that Martha Stewart's contract would be renewed. According to the article that I read on msnbc.com, Martha will be receiving $900,000 a year for the next five years. It was also mentioned that she will be eligible for annual bonuses of 55% to 150% of her base salary. It should be noted that Martha will not receive any salary or bonuses in prison, but she will be allowed to receive this compensation will on home confinement.

When I first heard about this I was flabbergasted! Why would Martha Stewart Living Omnimedia, Inc. make such a bold move as to renew Martha's contract? Any normal person found in Martha's situation would have been fired, yet Martha Stewart still has a job. So did Martha Stewart Living Omnimedia, Inc. make a good decision? After looking at the economic benefits that the company would receive be renewing Martha's contract, I feel that they did.

Martha Stewart still has a strong image in the homemaking industry, and you can't just push her away for being thrown in prison. If Martha Stewart Living Omnimedia, Inc. was to do this some other company may hire her. It should also be known that a lot of people still enjoy Martha Stewart's ideas and the way she does things. Martha Stewart has made some bad choices in the past and I really don't agree with them. Martha Stewart Living Omnimedia, Inc. on the other hand, has made a good economic decision, and that is a really good thing.


peter_parker said...

It looks as though the corporation still sees Martha as a valuable employee and asset to the company. I remember a lot of people rooting for her during the scandal. Maybe the company feels that the public is still behind her and won't necessarily shy away from their products. When it comes to choosing between inexpensive and innovative products and standing for ethics, most consumers will probably prefer the inexpensive products. Not just because people are unethical, but because they don't have to publically state their views and feel they have to live up to them.

John West said...

Martha Stewart unfortunately is still a big draw in the home interior and cooking markets. She messed up, but she shouldn't have to pay for it the rest of her life. In society we need to accept that high profile celebrities and their cases usually go severly under-punished. In the end, I think people will eventually forget about Martha's mishap and move on. The company was wise to keep their ties with her. Also, would the company even continue to exist without Martha? I doubt that it would.

Bryce Larkin said...

I disagree with what Martha Steward did, but I think the media blew it out of proportion. I feel it is great that her products are still working for her. If she is in prison, why should her products not be on the self if people still use them? I believe that her name was dragged through the mud, but many people still use her stuff. Good for her that she can still make money.

Dr. Tufte said...

-1 Spelling error in Rufio's post.

One in Bryce's comment too.

The post and the comments are all good. The message here is that optimizing managers still think Martha Stewart (the employee) is valuable to Martha Stewart Omnimedia.

Maudi said...

I feel as though they did make a great choice. Martha did make some poor decisions, everyone does. As long as she doesn't get anything in prison, that should be all right. She has great home ideas that my wife loves, and even though she's in prison, my wife still loves to buy her things and thinks she is a very creative person. I think that another company would have picked her up in a heart beat, had they not renewed her contract. But I do beleive that they are paying her too much!