Between 2001 and 2006, the CEO's of AT&T, HP, Home Depot, Walmart, and 7 other multinationals were paid an aggregate of $865 million in compensation while shareholders lost a total of $640 billion. Show me the risk/reward ratio, or remuneration based on value added there.
Poppycock. The total market capitalization of the four companies you named only amount to a little over $600 billion. Unless those other "multinationals" are all Berkshire Hathaway operating at a 90% loss, they did not lose 25% of their capitalized value each year for five years. (Yes, I just suggested a 125% loss)
But let's assume that this silly $640 billion number is real:
The value of shares is a function of the market, not necessarily of the company issuing the shares. Markets do irrational things based on poor information. If they were rational, there would be almost no way to profit from the market. Believing that market price is rationally tied to corporate performance is the rookie mistake that puts day-trading amateurs in bankruptcy. But, again, assuming this alleged $640 billion means anything:
A five-year aggregate decline in share price of $640 billion dollars represents roughly a 10% decline in share prices per year based on the 14 billion shares on the open market of
just the four companies you named and their average price as of today, and not these other etherial "multinationals." We can reasonably surmise that it is, in fact, far less than 10% per year, but I cannot calculate the exact number without knowing who else we're talking about.
$865 million in "compensation" is also an amusing number. Since it's 11 companies, we'll average that out to $79 million over that five-year period to reach a rough estimate of $16 million a year. Although this math may be wildly inaccurate, since one of these nonsense "multinationals" might well be Berkshire Hathaway. For the record, the average CEO pay of the companies on the S&P 500 is roughly $8 million per year.
A-Rod turns an average of $27 million each year
in salary alone, but does not run any company that employs thousands of people, produces goods/services for the markets, or contributes significantly to GDP. His "value add" to GDP is miniscule compared to a fortune 500 executive, but he doesn't represent capitalist oppression, so we don't complain about him.
The executives of those companies do, in fact, produce. They produce executive management services that govern some of the largest companies in the world. Clearly, "value added" is a matter of perspective, since the market for CEOs evidently values that service very highly. Complaining about it implies that some socialist weasel, for some reason, knows better than the board of those companies, with their
vested interest in the success of the company what a good CEO is worth. Central planning worked so well for the Soviets, so congress should probably regulate CEO pay.
