543: Wake Up Now

Ira Glass

Someone who works with our radio show, Bianca Giaever, went to this presentation at Columbia University a while back where two people onstage puzzled over this thing they had found online called Wake Up Now. And I say "thing they found online," because the whole point of their presentation was it was hard to tell exactly what it was.

Ira Glass

This is a video that was on WakeUpNow's website, which just looked like a kind of generic corporate-y website. And WakeUpNow seemed to be a company. But it was hard to tell exactly what the company did. This site talked about joining, about becoming a member, about living a better life. So was it a club? Was it an organization?

And then, when you googled WakeUpNow, there were tons of videos. Bianca saw some at the presentation at Columbia. And then, after the presentation, she started Googling on her own. And then, she sucked one of our producers, Brian Reed, into the vortex with her. Here is one of the videos they found.

Ira Glass

This is a video of a bunch of young people hanging out on the beach. You can see jet skis and the ocean. In the video, they refer to this as a leadership summit. And there was a whole genre of videos just like this, people in exotic locations, riding around in nice looking cars or, in this one, spelunking in a cave in Mexico, chanting.

[MUSIC - "LA BAMBA"]

That is, of course, WakeUpNow with "La Bamba." And then, there were a lot of videos with the word "scam" in the title, like "WakeUpNow is a scam, for real exposed truth." And so, these two producers on our staff were like, oh, so this is some kind of internet scam. But then, when they watched the videos, it seemed very different. Like, take this one for example titled, "WakeUpNow Warning, Don't Join Until You See This."

Ira Glass

So "WakeUpNow Warning, Don't Join Till You See This" is actually not a warning at all but entirely about how great WakeUpNow is. And in fact, there were so many videos like this, a video called "Five Reasons Not to Join WakeUpNow" offered not a single reason why not to join WakeUpNow, but instead went on to describe what a super awesome company it is.

So I'm joined in the studio right now by the two producers who were watching all these videos, Brian and Bianca. Hi, guys.

Bianca Giaever

Hi.

Brian Reed

Hey.

Ira Glass

So at that point, as best as you could tell, what was WakeUpNow?

Brian Reed

We honestly didn't know. Like, we couldn't figure it out. We eventually put some research in. We learned that, later, this move, the scam thing--

Ira Glass

You mean labeling videos "Such and Such is a Scam"?

Brian Reed

Yeah, exactly that. And then, having it not actually talk about it being a scam. So that's a move, I guess, that some people who are involved with certain companies or selling certain products will do. Like, that's a thing, I guess. But I'd never seen a video like that before. And it was really confusing.

Bianca Giaever

I mean, in so many of these WakeUpNow videos, we could tell people we're pitching something. But as far as we could tell, it wasn't a product.

Ira Glass

So what is this?

Bianca Giaever

This is a video of a guy who calls himself Panama. And it's titled "WakeUpNow Scam, Lend a Hand, Build a Man, Woman."

Brian Reed

So yeah, it wasn't really clear what WakeUpNow was. But still, there were hundreds of these videos. It was like this whole subculture with all these people, about thousands of people.

Ira Glass

OK, so then, I know what happened next is that you found out that WakeUpNow had a conference coming up, right?

Bianca Giaever

Yeah, and we went to try and figure out what this was.

Brian Reed

Yeah, and what we eventually found out is that it's something called "network marketing." It's a network marketing company. But also what we found out is that that is a very bland term for something completely mind-blowing, way beyond anything we could have imagined.

Ira Glass

So today on our radio program, Wake Up Now. If nothing else, I have to say, that is a completely genius name for a company. It promises so much so efficiently. That you'll open your eyes. You're life will be totally different, totally better.

And so, today, as New Year's approaches, as lots of people take stock of who they've been and make resolutions about who they want to be, we have stories of people in very different contexts who try to wake up and wake up others. Stay with us.

Ira Glass

Act 1, Something's Happening Here and You Don't Know What It Is. So Brian and Bianca headed to WakeUpNow's conference in New York City at a hotel in Times Square to try to figure out what this was. Here they are, Brian and Bianca.

Brian Reed

I'm a little embarrassed to admit this. But even after being at this conference for several hours, if you put a gun to my head and asked me what WakeUpNow is, what it does, I still don't think I could have told you.

Bianca Giaever

We talked to dozens of participants. And what we learned is that people were incredibly excited about something they weren't terribly good at explaining.

Bianca Giaever

People had come from all over, East Coast, Minnesota, California. They're mostly young and mostly people of color. They called WakeUpNow a lifestyle. They talked about WUN life, W-U-N, for WakeUpNow.

Brian Reed

For the longest time, I couldn't even figure out what to call the hundreds of people at this conference. Were they customers of WakeUpNow? Employees? Card-carrying members? Whatever they were, some of them could list specific WakeUpNow products.

Bianca Giaever

So there are products. And these people encouraged other people to buy them. But when we tried to use the word "selling," we were corrected.

Brian Reed

Awaken Thunder energy drink was not the only thing WakeUpNow was not selling, but providing. People seemed to be listing a totally random assortment of products.

Bianca Giaever

Lots of things people said WakeUpNow offered were just discounts, off their AT&T phone bills, purchases at Office Depot, on groceries.

Bianca Giaever

There's a vacation club.

Brian Reed

There's tax software.

Bianca Giaever

But in this sea of hard-to-understand information and unrelated products, one thing everyone seemed to agree on, WakeUpNow had a mission.

Brian Reed

In fact, so many people recited this mission so precisely, it was actually a bit weird.

Brian Reed

It took us all day and, honestly, quite a bit more research afterwards, including signing up ourselves-- which was really complicated-- to piece together how WakeUpNow works. Like I said earlier, they're a network marketing company. And if you haven't heard that term, you've probably heard of Amway or Herbalife or New-Skin, companies where you sell things to people you know. That's network marketing.

When you join WakeUpNow, you get access to a place on their website called The Hub, which is where you can purchase many of the products and services we heard about. You can join for free. But you're encouraged to sign up on a plan where you pay between $80 and $150 a month. You pay more money, you get more stuff, like the financial management and tax software.

Bianca Giaever

So that's the saving money and managing money part of WakeUpNow. As for the making money part, you can make money by recruiting other people to join WakeUpNow. They buy stuff, you can earn commission. They recruit people, you make money off that too. A chain forms below you.

That's the network in network marketing. You get three people to join, you get $100. If each of them gets three people to join, that's when the real money kicks in, about $600 a month. There are other ways to earn that money. But that's the one we saw them push.

Brian Reed

I know, this may sound like a pyramid scheme. Whether it is one, though, would have to be decided by the courts. We called the Federal Trade Commission. And a spokesman said figuring out if a network marketing company is a pyramid scheme is very difficult and takes a long investigation. The FTC's website says a good tip off that a network marketing company might be a pyramid scheme is that members earn more money for recruiting new members than for selling products to the public.

WakeUpNow's chief marketing officer told us that 100% of the company's profits come from product sales. But when you pay a monthly fee to join, they consider that a product. He said WakeUpNow is absolutely not a pyramid scheme.

Bianca Giaever

For now though, WakeUpNow members are charging forth, recruiting more and more people into the company and, apparently, getting paid a boatload to do it.

Boom, boom, boom. Just watch, probably 500K a month walked by you.

Brian Reed

This guy's pointing at a group of otherwise ordinary looking people. He's talking about all their salaries added together.

Bianca Giaever

People loved pointing out all the 6-figure-earner magnates among us. In our first few minutes of the conference, I saw this big bearded man. Someone else called him, quote, "a freaking duck hunter guy," which seemed like an apt description. People lined up to take pictures with him. Someone nearby told me why.

Bianca Giaever

His name? See More Green. That's S-E-E M-O-R-E Green. See More is the top earner in WakeUpNow. He's been doing it a year. He's 25. Everybody knew who he was and how much he allegedly made. Later in the day, WakeUpNow gave See More Green an award for being number one.

Bianca Giaever

A woman near me says, he's a regular dude. He's wearing a t-shirt. You would never know.

Brian Reed

Another thing we encountered at the conference was a repulsion to something so unsavory, so unseemly, that WakeUpNow's emcee for the day couldn't even bear to speak the word aloud. So he spelled it out instead.

Brian Reed

J-O-B. Quick warning, I'm going to say the word right now, job.

Bianca Giaever

This dissatisfaction with 9-to-5s ran deep through the crowd. Take this paralegal. How does she describe her job?

Bianca Giaever

She told me that as soon as her income from WakeUpNow inches above her current salary, she's outta there.

Brian Reed

Of course, lots of jobs do suck. A surprising number of attendees at the conference told us they were planning on quitting to pursue WakeUpNow. These appear to be people with steady full-time E-M-P-L-O-Y-M-E-N-T, a compliance manager at a big bank, a human resources person at Coca-Cola.

Bianca Giaever

And we also met people who had actually done it. One person quit a restaurant. Another quit his sales job at Samsung. Plus, there was this guy.

Bianca Giaever

He quit his job two years ago. Now, he has a motto.

Brian Reed

It's clear why lots of people would want to leave their current lousy jobs. What's not so clear is why they'd choose to leave them for WakeUpNow. When you look at the WakeUpNow compensation plan, which we did later, it actually says in there how many members are making a small profit, 4%. That's it.

And those 4% are not making a living, just an average of about $600 a month. The number of people making anything close to resembling a living is about 1%. Those are the company's numbers. If they're accurate, presumably 95% of the people chanting in this conference room weren't making any profit whatsoever.

Bianca Giaever

This is the beginning of the main event, what was billed as a business presentation that stretched on for nearly five hours with more than a dozen speakers. A lot of it was about how to recruit people into WakeUpNow.

I should say, officially, the company doesn't use the word "recruit." But there's no other way to describe what we saw. It was about recruiting. Like this advice from a guy named Rob McFadden. He said that, on the day you launch your WakeUpNow business--

Brian Reed

The next step was to get each person on the 10:00 AM call to bring 10 more people with them to the noon call and, then, to do the exact same thing over again for a 2 o'clock call, all with no mention of what the business actually is. After all--

Bianca Giaever

The fact that they called this event a business presentation was strange, because there was so little actual business discussed. So much of it was just motivational speeches.

Bianca Giaever

This was the aspect of the conference that we really struggled to make sense of, the contrast between this vision of WakeUpNow changing the world, speaking life into people, and the reality of what it seemed like WakeUpNow is actually doing, which is selling energy drinks and giving people discounts on random stuff.

Bianca Giaever

This crystallized during the single most confusing moment of the conference, the big announcement they made in between inspirational speeches. The company's marketing director, Jordan Harris, took the stage.

Brian Reed

And what he went on to talk about was coupons. WakeUpNow members have access to coupons that they can print out and use to get money off at local businesses.

Brian Reed

The big announcement was that you no longer had to print the coupons out. You could now just use a smartphone app.

Bianca Giaever

After this, Brian and I had to check with each other. We honestly weren't sure if we had missed something. This excitement was over coupons?

Brian Reed

The emcee couldn't even move on with the presentation after this, because everyone was so overwhelmed.

Bianca Giaever

We left the conference not sure what to think of what we'd witnessed. But the fact that people were talking about quitting their jobs to do WakeUpNow, when the chances of making any kind of living were so low, that seemed alarming.

Brian Reed

And to our surprise, when we interviewed WakeUpNow's Chief Marketing Officer Jordan Harris, the guy who made the coupon announcement, he said that isn't meant to be the company's message. They don't want everyone quitting their jobs.

Bianca Giaever

We told Jordan this wasn't the measured message we left the conference with. Instead, in a room where less than 1% was making any real money from WakeUpNow, we heard speakers spinning a fantasy of enormous wealth, infinity pools, trips to Cancun. One speaker had the crowd shout out their favorite fancy cars, Maseratis and Porsches.

Jordan understood why we got this impression. But he says that's not WakeUpNow is really about. He says their company was built around the idea of helping people make an extra $500 or $600 a month and that they chose that number deliberately.

Brian Reed

The conference we went to was in April. Jordan says the company had grown 4,000% over the previous year. And they were scrambling to deal with that expansion. WakeUpNow, by the way, was only founded in 2009.

Since April, Jordan says they're running a tighter ship. They recently replaced their CEO. They're rewriting some of their introductory literature, downplaying the recruiting side of things. And they've changed what they say at their events. He says, WakeUpNow has never been intentionally vague. But he thinks we were not unique in our confusion. And that's one of the things they're trying to fix.

Bianca Giaever

A couple weeks ago, we talked to a guy who studies companies like WakeUpNow, Amway and Herbalife and other network marketing companies. And he said, when reporters talk about them, they usually focus on the money people spend on them, but rarely discuss the part he considers more troubling and more destructive-- what it does to members' personal relationships.

This guy's name is Robert L. Fitzpatrick. And he used a word to describe WakeUpNow that may sound hyperbolic. The word was "cult," except not a religious cult.

Brian Reed

Robert Fitzpatrick says it's not an accident that it took us so long to figure out what WakeUpNow is, that the videos all seem so vague and the website was so confusing about pricing and products when we signed up as a member. He says, vagueness is part of a strategy companies use. Robert became interested in network marketing after he and some friends got caught up years ago in the frenzy of recruiting people into a gifting scheme.

And he says the most disturbing thing about it was how it manipulated their thinking, made them suspend critical judgment. So he spent years researching how network marketing companies work. A regular business, Robert says, doesn't try to tell people how to treat their friends and family, which we saw at WakeUpNow.

Bianca Giaever

Global is the highest earning level in the company, the level See More Green is. That guy literally just dropped the mic, by the way.

[CHEERING AND APPLAUSE]

Brian Reed

We asked WakeUpNow's Chief Marketing Officer Jordan Harris if the company is a cult. And no surprise here. He says that's an unfair characterization. He says, he interprets those moments from the conference differently than Robert Fitzpatrick does.

WakeUpNow is not trying to isolate members from their family, he says. But if someone's being negative about your work, he thinks it is good advice not to hang around them. And what's wrong with believing in what you do?

Bianca Giaever

At the conference, everyone was so amped up. It was hard to get a sense of what it was really like to do WakeUpNow day in and day out. So we found someone who'd gone all in on WakeUpNow, who'd quit his job to dedicate himself to it, a guy with a wife and three young kids who recently stopped working in the kitchen of a really nice restaurant to do WakeUpNow.

Brian Reed

His name is Damien Lacks. He's 29 years old. We went to visit him at his apartment in Gettysburg, Pennsylvania. Damien grew up in a rough part of Baltimore. He was a charismatic kid, a good athlete who did well in school. But he got into drugs, dropped out, did some time in jail. By the time he was 24, he was living in a halfway house in Gettysburg, where he moved to get away from the city, and working at a McDonald's.

Bianca Giaever

After McDonald's, Damien worked in kitchens at a couple of pubs in town, then landed at a TGI Fridays. But Damien was bored there.

Brian Reed

In other words, it was a J-O-B. So he applied to one of the best restaurants in the area, a place called Restaurant Sydney, founded by a chef he admired. Damien was taking online culinary classes. He had dreams of becoming a sous chef, of one day opening his own restaurant. So when Sidney hired him, he was thrilled.

Bianca Giaever

When it came down to it, working in the kitchen at Restaurant Sidney was still just working in a kitchen. His co-workers grumbled, told offensive jokes to pass the time. They didn't seem inspired.

Brian Reed

And Damien was only making $10 an hour. After babysitters and gas-- Sidney is 25 minutes from his house-- Damien says his pay was basically a wash. He kept asking for a raise, but wasn't getting one.

Bianca Giaever

And that's when an Instagram friend sent Damien some of the YouTube videos about WakeUpNow. Just like us, he says he'd never seen anything like them before. Unlike us, though, his reaction was--

Brian Reed

We asked Damien what about the video spoke to him. And what it came down to was the positivity. It was a bunch of young people and, in particular, young black people succeeding as entrepreneurs. They were working for themselves, in total control of their own destiny.

Brian Reed

Damien began reading WakeUpNow's literature obsessively. He went on a vacation with his family. And he says, the whole time, he couldn't tear himself away. He compares it to reading scripture. The company's Quick Start Guide includes a whole section called "Your Thoughts can Change the Future." Damien loved that. It talks about feeding yourself positive ideas and filtering out the negative, not hanging around negative people.

After that, every dirty joke his co-workers made felt like it was poisoning his mind. Then, after weeks of asking for a raise, his boss told him he wouldn't be getting one. Not long after, Damien quit Restaurant Sidney and devoted himself to WakeUpNow.

Bianca Giaever

When we visited Damien, he'd been doing WakeUpNow for four months. Here's what a typical work day looks like for him. He wakes up and helps get his two boys off to school. And once they're off, he usually dials into a 10:00 AM motivational group call. But most of the day, he watches his baby daughter.

While she's napping, he spends a few hours poking around on the computer, watching YouTube videos about how to present WakeUpNow to people and, then, just kind of being on Facebook. If he starts to feel down, he'll watch an uplifting video. Early on, he tried calling every contact in his phone to tell them about WakeUpNow. That yielded exactly one WakeUpNow recruit.

Bianca Giaever

His mom. After four months, she's still the only recruit he has, which means he's not making any income. And in fact, he's paying $100 a month to be part of WakeUpNow.

Brian Reed

We spent a lot of time debating with Damien about this. It was nearly impossible to get him to even entertain the hypothetical of WakeUpNow not working.

Brian Reed

Damien knows the stats, that just 1% of WakeUpNow members make a living. He actually pointed the numbers out to us on his own. But it's almost as if those dismal statistics made Damien even more optimistic about his prospects.

Bianca Giaever

We thought that one person who might be silently freaking out about this was Damien's wife, Candice. Candace has a full-time job managing a store at the nearby outlet mall and is now the sole breadwinner in their family of five. They have two kids, a baby and an eight-year-old, and just became the legal guardians of a third child, a 12-year-old who neither is related to, the son of one of Damien's ex-girlfriends.

So we took Candice aside, out of Damian's earshot, to ask how she was dealing with the pressure of providing for three kids while Damien didn't have a job and wasn't bringing in any money with WakeUpNow.

Brian Reed

This is not the answer we were expecting. But Candice likes her job. And she says that her income is enough to support the family without Damien earning money. She says they're not in financial trouble at all. When Damien had restaurant gigs where he worked long erratic hours, she and the kids would sometimes go days without seeing him. Now that Damien has left the restaurant industry for WakeUpNow, Candice says her kids get to be raised by their father.

Brian Reed

It's 3:30 in the afternoon on a Thursday. And Damien's greeting his boys, Damian Jr. and Leonte, as they get off the school bus. He asked them about their day, explains who these weird radio reporters are in their apartment. And then, they get to homework.

Brian Reed

Leonte has to present a biography of Bruce Lee.

Bianca Giaever

Both Damien and Candice say without hesitation that if Damien never makes a dime from WakeUpNow, it still will have been the best move he could have made for their family.

Ira Glass

Bianca Giaever and Brian Reed. A few weeks after the visit, Damien-- he decided to put WakeUpNow on pause. He is no longer a member. He says he's not paying money every month. He wanted to make some money for the holidays, went back to work at TGI Fridays where he's now a waiter, which says he likes a lot more than working in the kitchen.

Coming up, a rich guy tries to wake up other rich guys about the issue of how rich certain rich guys are getting. That's in a minute from Chicago Public Radio when our program continues.

Ira Glass

It's This American Life. I'm Ira Glass. Each week on our program, of course, we choose a theme. Today, with people making resolutions for how this new year will be different from the previous one, our show is "Wake Up Now." I hope you notice how classy we're keeping it here on the show by not inserting alarm clock sounds every time I say those words. Wake Up Now-- stories of people trying to wake themselves up or wake up others.

We've arrived at Act 2 of our program, Act 2, Board Games. So there's this thing that comes up in the news pretty regularly, CEO pay. When it comes up, rarely is it good for the CEOs. Usually, the point is that CEOs are overpaid, something needs to be done. If you figure that most people work 40 or 50 years in their work lives, it would take a typical worker four or five lifetimes to earn what the CEOs of large companies earn in a single year.

So you hear statistics like that in these stories. But what you almost never hear is anybody actually trying to cut the pay of a CEO. Well, David Kestenbaum and Jacob Goldstein of NPR'S "Planet Money" found a guy who tried to wake people up to the fact of the CEO of one small company seemed to be making way too much money.

David Kestenbaum

It takes an unusual person to wage a war against a CEO and his pay. The odds of success are just so low. And Tim Stabosz was definitely an outsider.

Jacob Goldstein

He lived in a small town, Laporte, Indiana, in a small house. We went to visit. In the dining room, there's a broken Dungeons and Dragons pinball machine. Tim tried to fix it.

Jacob Goldstein

When Tim got out of college, he got a government job and tried his hand at the stock market on the side. He used a computer to pick out stocks he thought were undervalued. He still has that computer. And just so you have the right image in your head, this is the kind of computer you'd find sitting out on the sidewalk. It's got a floppy disk drive. And when you turn it on, it just goes beep.

[PRINTING NOISE]

Jacob Goldstein

Sometime in the mid '90s, Tim came across this one company. He'd end up investing hundreds of thousands of dollars in its stock. It was a small company based on Long Island called P&F Industries. It made pneumatic tools. You can actually buy them at Home Depot.

Jacob Goldstein

Tim just like the company's numbers. It was a small company where you could understand everything about it. P&F seemed like a good deal. But over the years, something began to gnaw at him, the salary of the CEO, Richard Horowitz.

David Kestenbaum

Tim looked around at similar companies, some in the same industry, some in the same geographic area. And he couldn't find any where the CEO was paid even half of what Horowitz made. Now, if you just own a few shares of a company's stock and you think the CEO is overpaid, there isn't much you can do. But if you own more, well, that's different. And by the fall of 2009, Tim owned 180,000 shares.

Jacob Goldstein

His stake was worth more than half a million dollars. And it turned out, Tim had an ally in this fight, a guy with a little more experience, a guy who ran a hedge fund.

David Kestenbaum

Andrew also owned a big chunk of the company, about 8%. He and Tim didn't work together directly. They had very different styles. Andrew was a by-the-book investor, fond of semi-obscure military allusions.

Jacob Goldstein

For years, Andrew had been arguing that the CEO was grossly overpaid. Over one 10-year period, he says, Richard Horowitz took home $13.5 million dollars. That's more than twice what the entire company made in profits over that time.

David Kestenbaum

Sometimes, when people complain about CEO pay, they talk about it as if the money's coming out of the pockets of ordinary workers. That is not how Tim and Andrew see it. Every dollar the CEO gets is $1 less profit, $1 less for Tim and Andrew and all the other stockholders.

Jacob Goldstein

This is why, if you think CEOs are overpaid rich guys, your best hope for changing things may be other rich guys, rich guys with enough money to buy up a bunch of stock and take on the company to try and cut the CEO's pay, in hopes of becoming even richer themselves.

David Kestenbaum

We, of course, wanted to know what the CEO Richard Horowitz had to say about this. We tried to get him. We had a bunch of talks with the company's lawyer. In the end, Horowitz declined to be interviewed. But because this is a public company, there are plenty of recordings of him. Public companies have what are called "quarterly earnings calls" for investors, really anyone who wants to listen.

David Kestenbaum

The operator starts the call. And then, here is the man himself, Richard Horowitz.

David Kestenbaum

I've listened to a lot of earnings calls like this over the years. Usually, they are incredibly dull. Analysts from big banks asking super specific things about the company's balance sheet. But remember, P&F is a small company.

And on some of these calls, there are only two people phoning in with questions, two people who feel the CEO is grossly overpaid, Andrew and Tim. They get to ask the CEO whatever they want. Here's one exchange.

Jacob Goldstein

Tim is asking about this key thing that's used to determine a CEO's salary. It's called a compensation study. It looks at what CEOs at comparable companies are earning. P&F Industries had hired an external firm to do one of these reports. And Tim wanted details.

David Kestenbaum

Q2 means second quarter.

David Kestenbaum

There are a lot of calls like this.

Jacob Goldstein

A CEO's salary is set by a company's board of directors. And Shapiro suspected Richard Horowitz had packed the board with his cronies, people who paid him more than he deserved. So Andrew hired a private detective and did some digging himself. He discovered that, in fact, several board members played golf at the same country club as the CEO.

David Kestenbaum

Nothing illegal or maybe even surprising about these guys blowing into the same country club. But still, what would General Colin Powell do? He'd get them off the board. Andrew suggested several potential new board members. And Tim, Tim nominated himself.

Jacob Goldstein

Getting new people on a board is tough. There is a vote. But in most cases, the existing board members get to decide who's on the ballot. It's as if members of Congress were the ones who decided who got to run for Congress.

David Kestenbaum

So Tim and Andrew went to the company's annual meeting to try to convince the board to put their candidates on the ballot. It was the first time Andrew Shapiro and Richard Horowitz, the CEO, had met in person.

David Kestenbaum

The board did not seem immediately swayed by this argument. And it's easy to imagine how this whole thing might feel on the other side if you're, say, Richard Horowitz, the CEO; if you've got two guys who have never even worked in the tool business telling you how they think the business that your father built up should be run and how much you should be paid and who should be on your board.

Jacob Goldstein

For Tim Stabosz, what had started out as a rational investment, something just based on numbers, had become emotional, had become something hard to let go of. At some point in this whole fight, Tim's letters to the company took on a different tone. He got rid of the lawyer who'd been vetting them.

Some of the letters start to have words in all caps. Some start to feel weirdly intimate. One is addressed just to Richard and uses phrases like, "I was at the end of my rope," and, "goodness knows, I tried a different course."

David Kestenbaum

And then, in the summer of 2010, more than a decade after Tim first bought stock in P&F Industries, something finally went his way. There was a change on the board. The two guys who played golf at the same country club as the CEO stepped down from the committee that set the CEO's pay.

Jacob Goldstein

Also, one of the people Andrew had recommended for the board got put on the ballot and elected.

David Kestenbaum

And a year and a half later-- if you haven't noticed, this is an incredibly long process-- it finally happened, the thing that almost never happens. The board of P&F did what Andrew and Tim wanted. They cut Richard Horowitz's base salary by a lot, from $975,000 to $650,000, a cut of over $300,000.

David Kestenbaum

Tim Stabosz, of course, was elated about the pay cut.

Jacob Goldstein

That feeling did not last. It turns out, that new contract also made it easier for Richard Horowitz to get a bigger bonus. And in 2012, even though Horowitz's base pay had been cut, he actually ended up making more money than he had the previous year.

David Kestenbaum

And then, earlier this year, Richard Horowitz got a raise. The board boosted his base pay by $50,000.

David Kestenbaum

The company only let us talk to one person on its side of things. But it was someone we definitely wanted to hear from, the board member that Andrew Shapiro had recommended. We met him one afternoon at a business club at the top of a tall building in Philadelphia. His name is Howard Brownstein. And he told us he thinks Richard Horowitz's pay is reasonable.

Jacob Goldstein

He's one of the owners of the company, right?

David Kestenbaum

Since P&F wouldn't release that study, we asked a company that analyzes CEO compensation to take a look. The company is called Equilar. They do a lot of work for companies who are trying to figure out how much to pay their CEOs.

Jacob Goldstein

Here is what Equilar found. Among roughly 200 companies of similar size, Richard Horowitz's pay ranked near the very top, in the top 7%, more than twice the average. Equilar also looked at a smaller group of companies that, like P&F, are in what's called the "industrial goods" sector. There were 13 companies in that group. The top paid CEO was Richard Horowitz.

David Kestenbaum

In other words, according to the study, Richard Horowitz is one of the highest paid or the highest paid CEO for what he does.

Jacob Goldstein

Tim Stabosz lost. But he had owned shares in P&F for most of his adult life. And when you've been in something that long, it can be hard to know when to walk away.

David Kestenbaum

I can tell you what giving up looks like. After we talked to Tim this summer, he had a momentary cash crunch. He had to sell all his shares. The company bought them from him. And as part of the deal, Tim promised not to buy any shares of P&F Industries for three years.

Jacob Goldstein

It turns out it's really hard to cut a CEO's pay, even if you own 5% of the company. Now, he has even less power to do anything about it. Now, Tim Stabosz is just like everybody else.

Ira Glass

Jacob Goldstein and David Kestenbaum from the NPR podcast "Planet Money," the very entertaining podcast about economics. Get it for free at npr.org/money or whenever you get your podcasts.

[MUSIC - "BIG BOSS MAN" BY KOKO TAYLOR]

Ira Glass

Act 3, Sleep No More. OK, so to end today's program about waking up, let's leave the world of metaphor completely. So we're not talking about waking up to a new way of seeing the world or waking up to the things you need to do to change your life or waking up other people to the issue of overpaid CEOs, or whatever issue. I'm talking about just waking up, just waking up, pure and simple. That shouldn't be hard, right? You do it every day.

[ALARM BEEPING]

Springfield, Oregon, Monday morning during finals week, 7:30. Morgan Peach, a grad student hears the alarm that's supposed to wake him up. And he shuts it off. This happens again at 7:35.

[ALARM BEEPING]

And again at 7:40.

Ira Glass

Once more at 7:45.

[ALARM BEEPING]

You get the idea, 8:15, 8:25. Finally, 9 o'clock, his girlfriend, Angela Evancie, who made this recording, steps in.

Ira Glass

Right. He doesn't get up. Besides an exam, he has two research papers to turn in and 55 exams and papers to grade. Angela sees him struggle everyday with waking up. But she thought, this week-- this week-- for once, he would do it when the alarm sounds, because he has so much to do.

Tuesday, it goes off first at 7:30, then seven more times. 7:40, 7:45, 8 o'clock, 8:05, 8:10, 8:15, 8:20. Wednesday, pretty much the same deal. At some point, Angela says to her sleeping boyfriend--

Ira Glass

People can be surprisingly articulate when they're barely awake sometimes. Wednesday night, Morgan tells Angela that the next morning, Thursday, he actually is going to have to get up. The geography paper's due at noon.

Ira Glass

So next morning.

Ira Glass

Sometime near 10:00 AM, they finally have this conversation.

Ira Glass

And then, still lying in bed. He explains the whole thing perfectly. It would be impossible to say this better.

Ira Glass

Our program was produced today by Jonathan Menjivar, with Sean Cole, Stephanie Foo, Chana Joffe-Walt, Sarah Koenig, Miki Meek, Brian Reed, Robyn Semien, Alissa Shipp, and Nancy Updike. Our senior producer is Julie Snyder. Production help from JP Dukes.

Seth Lind is our operations director. Emily Condon's our production manager. Elise Bergerson's our office manager. Adrianne Mathiowetz runs our website. Editing help today from Joel Lovell. Research help from Christopher Swetala and Benjamin Anastas. Music help from Damen Graef.

[ACKNOWLEDGEMENTS]

Our website, thisamericanlife.org, our spin-off program, Serial, serialpodcast.org. This American Life is delivered to public radio stations by PRX, the Public Radio Exchange. Thanks, as always, to our program's co-founder, Mr. Torey Malatia. This is what he said to the crowd immediately after Peter Sagal dropped by the WBEZ Christmas party for five minutes.