April 25, 2007
Consumer Group Criticizes $1 Billion Plus Paycheck of Sears Chairman
Edward Lampert, Head of Sears, Profits From Sales of 800,000 Unsafe Stoves Annually; 12 Million Sears Stoves in Use in U.S.Households Today
WASHINGTON, D.C. – Joan Claybrook, president of Public Citizen, today characterized the announcement in Institutional Investor’s Alpha magazine that Edward S. Lampert, founder of hedge fund ESL Investments and chairman of Sears Holdings Corp., took home more than $1 billion on his investments last year as “excessive greed.”
According to The New York Times, Lampert has $11 billion of his $14.6 billion ESL fund in the retailer Sears Holdings Corp. Sears stock rose during the last year, enriching Lampert’s fortune by approximately $1.3 billion.
“Lampert-led Sears has raked in huge profits but failed to protect the public from the 800,000 unsafe stoves Sears sells annually in this country,” Claybrook said. “With the use of cost-cutting, lighter-gauge steel, these freestanding gas and electric ranges tip over easily. They are responsible for more than 100 reported cases of death and injury from scalding and burns due to hot foods and liquids spilling from the stove top when the stove tips over, and from the weight crushing anyone in the path of the tipping ranges.”
The history of unsafe stoves is sobering. Sears has known about this problem for years and yet done nothing. In December 1986, Sears staff members were told to secure the stoves. However, after informing installation managers in 1987 that the anti-tip devices “will be very simple [to install] in most cases” and “should require very little time,” an internal Sears memo documents that the brackets were usually not installed. Following the development of an industry-wide voluntary standard by Underwriters Laboratories and reevaluating the situation in 1994, Sears decided it would “take no action to provide installation of anti-tip devices.” A 1996 internal Sears memo estimates that the brackets were installed in only 2-5 percent of ranges sold.
A few years later in a 1999 letter to Sears, Underwriters Laboratories wrote that it expected ranges with the UL Listing Mark to be installed with anti-tip safety devices supplied by the manufacturers. In a highly misleading letter, Sears responded that its vendors and suppliers had assured them that their ranges “have the proper components, warnings and instructions to be in full compliance with the UL 858 [requirements].” Sears failed to note that it was not installing the brackets as required.
The retailer also failed to protect its customers after the U.S. Consumer Protect Safety Commission sent incident reports. They document horrific stove-tipping injuries and deaths, mostly involving children and the elderly.
Claybrook called on Lampert and the other sellers of freestanding ranges to stop these horrible and yet preventable injuries. “Retailers of these unsafe stoves need to notify all owners of the danger of tipping and to install the brackets for any stove sold to date and going forward.”