Post by: pinoyinus on June 14, 2008, 11:52:19 AM
Here are my reasons:
1. As a software developer, I have personal experience where the company I worked for awarded stock options to the CEO all the way to directors, but not a single share of stock to the people who actually create the company's products. It was such a lop-sided situation where the chairman and CEO came away with close to 10% of the company's net profits for that year. Non-executive employees who actually make the products work and serve customers get nothing but their 2.5% - 3.5% annual raise. I've spoken to other software engineers and technical people of other engineering fields and I've learned that my experience is not an isolated case.
2. The disparity between the average income and executive pay has never been higher. I think this will polarize society , add fuel to class envy, and will further thin out the middle class ranks. As we all know, the strength of any free society lies in its middle class.
3. Excessive CEO pay is not the result of a free market. In most cases, the approval of executive packages are done by the boards (stock holders don't have a direct say). It is very common to have one person sitting on different corporate boards and be chairman in another. This creates the "country club environment" where "I scratch your back, you scratch mine" arrangements are quite convenient.
I believe that it is goverment's role to promote a level playing field where opportunities are open to all who are willing to put their time and talents to work. Once an enterprise becomes successful, I think it is only just that "awards" should be fairly given and not be monopolized by the executives. I do understand that we all have the option to look for work and be employed with a company of our choosing. We are free to negotiate the terms of our employment and when not treated well, we are free to resign and look for work elsewhere. Executives however, have the same priveleges and MORE. Executives have access to the corporate boards. This access makes it easy for executives to find ways to award themselves on top of whatever it is that's stipulated in their employment contracts.
Looking forward to all your opinions.
Post by: Monkeyleg on June 14, 2008, 01:10:04 PM
That kind of talent is more rare than the talents found in the worker pool, in the same way that the talents of a Tiger Woods or even an Oprah are more rare than those found in the general population.
However, I don't see anyone suggesting that the government put caps on how much entertainers or sports figures can earn.
But let's suppose they did. In fact, why not put caps on how much every person can earn? All you'd need to do is establish a government agency that would set salary caps for various occupations. IIRC, that worked fairly well in the USSR.
Post by: Fly320s on June 14, 2008, 02:16:24 PM
Quote
3. Excessive CEO pay is not the result of a free market.
It most certainly is. The company (board of directors) and the employee (CEO) agreed on a compensation package. The deal was between the employer and the employee without outside influences or restrictions. It can't get anymore free-market than that.
Post by: Scout26 on June 14, 2008, 02:28:46 PM
2. Hmmm, Astor, Carnegie, Rockefeller, Mellon, Hearst, Vanderbilt, et al Made much, much, more then the average worker as compared to today. Show your data.
3. Fly320's beat me to it. Ask GE stockholders if they want Jack Welsh back ??
Post by: The Annoyed Man on June 14, 2008, 02:56:33 PM
Quote
2. Hmmm, Astor, Carnegie, Rockefeller, Mellon, Hearst, Vanderbilt, et al Made much, much, more then the average worker as compared to today.
Yeah, robber barons and the sweatshops of the industrial revolution. That's what we want back.
Post by: lupinus on June 14, 2008, 03:40:18 PM
Post by: RocketMan on June 14, 2008, 03:49:15 PM
But it's a lot more fun to froth at the mouth and scream about robber barons.
Post by: roo_ster on June 14, 2008, 05:10:00 PM
They put a cap on their CEO pay at some multiple of the lowest paid worker...and went looking for a CEO.
Turns out at that pay rate, they could not find anyone competent enough to suit their requirements.
So, the socialist ice cream entrepreneurs tossed out their pay scheme and hired a CEO at a much higher salary than they had originally planned. But, to assuage their socialist guilt, they made sure the guy they hired was at least black.
Post by: Sindawe on June 14, 2008, 05:23:35 PM
Quote
Being a CEO takes a lot more talent then being the average worker bee. I've seen how hard they work, it aint easy, and it aint short.
Horse Puckey. While a CEO may have skills as schmoozing and fast-talking, that is about the extent of their "skills". In each of the commercial for profit area's I've been employed at; which over the years have included Biotech, telecommunications and legal support; the "average worker bee" has a damn site more talent and works harder than the figure head CEO who sits in a plush air conditioned office while the "worker bee" toils over a hot fermentor or server. When the CEO of the start up I used to work at walked away with a Golden Parachute and a executive standing ovation after running the company into the ground, the folks who sacrificed blood, sweat and tears for years in hot or cold miserable conditions; suffered physical injury and chemical exposure and gave their all to the company got a shown the door with a pitance for their pain.
Maybe I'd have a better opion of "CEOs" if they had to walk the plank to pay for their folly.
Post by: lupinus on June 14, 2008, 05:29:55 PM
I sit in a nice A/C job in a comfy chair. And I go through three times the stress doing more jobs that require more knowledge then some of our floor people could dream of. I know that our managers have it worse. Being a CEO (and doing your job, I'll be more specific this time) is not an easy task.
The guy on the construction site with a shovel sweats a lot more then the guy who designed the building. Does that mean he is more valuable?
Post by: De Selby on June 14, 2008, 05:33:28 PM
Quote
3. Excessive CEO pay is not the result of a free market.
It most certainly is. The company (board of directors) and the employee (CEO) agreed on a compensation package. The deal was between the employer and the employee without outside influences or restrictions. It can't get anymore free-market than that.Except that the employer is actually the public shareholder, not the board of directors. The money doesn't belong to either the board or the CEO or the management-it's not their money, yet they spend it on each other as if it were.
Different standards apply when you are playing with other people's money, even in a free market, imho.
Post by: K Frame on June 14, 2008, 08:04:03 PM
Actually, the employer IS the Board of Directors as in every corporation I know of, hiring/firing upper management is a role specifically designated to the Board of Directors.
I bet you would be hard pressed to find a single corporation in the United States whose incorporation documents give the shareholders a tangible say in compensation and hiring policies.
Over the years there have been numerous attempts by shareholders to influence the hiring/firing and compensation policies of numerous corporations, but virtually all have been abject failures. Any number of lawsuits have been filed, most have also failed simply because the articles of incorporation don't allow standing for the suits.
I suppose you could get all technical and say "well, it's like the United States, a representative republic type structure, in which the shareholders elect the board to serve on their behalf..."
It's actually not like that at all.
Post by: Finch on June 14, 2008, 09:49:00 PM
I believe that it is goverment's role to promote a level playing field where opportunities are open to all who are willing to put their time and talents to work.
Negative. The purpose of government is to secure liberty and personal freedoms. Promoting a level playing field is slang for socialism....
Post by: De Selby on June 14, 2008, 10:37:53 PM
"Except that the employer is actually the public shareholder, not the board of directors."
Actually, the employer IS the Board of Directors as in every corporation I know of, hiring/firing upper management is a role specifically designated to the Board of Directors.
I bet you would be hard pressed to find a single corporation in the United States whose incorporation documents give the shareholders a tangible say in compensation and hiring policies.
Over the years there have been numerous attempts by shareholders to influence the hiring/firing and compensation policies of numerous corporations, but virtually all have been abject failures. Any number of lawsuits have been filed, most have also failed simply because the articles of incorporation don't allow standing for the suits.
I suppose you could get all technical and say "well, it's like the United States, a representative republic type structure, in which the shareholders elect the board to serve on their behalf..."
It's actually not like that at all.
Actually, the employer IS the Board of Directors as in every corporation I know of, hiring/firing upper management is a role specifically designated to the Board of Directors.
I bet you would be hard pressed to find a single corporation in the United States whose incorporation documents give the shareholders a tangible say in compensation and hiring policies.
Over the years there have been numerous attempts by shareholders to influence the hiring/firing and compensation policies of numerous corporations, but virtually all have been abject failures. Any number of lawsuits have been filed, most have also failed simply because the articles of incorporation don't allow standing for the suits.
I suppose you could get all technical and say "well, it's like the United States, a representative republic type structure, in which the shareholders elect the board to serve on their behalf..."
It's actually not like that at all.
Of course the shareholders don't have a say in most cases-but it's still the shareholder's money. The board and management are obligated to act for the benefit of the shareholders, but they don't in a large number of circumstances. They are under a fiduciary duty to excercise every power they have for the benefit of the shareholders-because those are the people who own the company.
It is a fact that the board, the CEO, and all of the management are employed and paid for by shareholder money. Because of the form of the organization, though, it's difficult to hold them accountable to the rightful ownership interests of the shareholders. You basically have to be Dennis Kozlowski to get busted for treating the shareholder's money as your own.
Post by: vernal45 on June 14, 2008, 11:56:08 PM
Post by: seeker_two on June 15, 2008, 03:54:14 AM
...as long as I don't have to pay it.
Post by: GingerGuy on June 15, 2008, 06:57:52 AM
With all due respect Pinoyinos, your candidate, Hillary Clinton lost to a black man
Obamo. Her brand of socialism which includes statements like yours is a perfect example of thinking from a minority of Americans, never to which will gain much support and rightfully so.Too many people make statements but do not ponder the consequences.
Most people do not want the responsiblities of management or ownership. For these individuals, they come into work, get a fair wage and go home each night. If they wanted more, they would work for it, invest for it and pay the repercussions of the added responsibilities. Leadership is easy to talk about, but difficult to be successful at unless you possess some special talents.
Only in America are we all free to achieve what we work for, I for one have a great respect for the average hourly wage earner. He is America...and they should be honored every chance we get...
Post by: Sergeant Bob on June 15, 2008, 07:30:29 AM
Pinoyinos wrote, "I believe that it is goverment's role to promote a level playing field where opportunities are open to all who are willing to put their time and talents to work."
With all due respect Pinoyinos, your candidate, Hillary Clinton lost to a black man Obamo. Her brand of socialism which includes statements like yours is a perfect example of thinking from a minority of Americans, never to which will gain much support and rightfully so.
Too many people make statements but do not ponder the consequences.
Most people do not want the responsiblities of management or ownership. For these individuals, they come into work, get a fair wage and go home each night. If they wanted more, they would work for it, invest for it and pay the repercussions of the added responsibilities. Leadership is easy to talk about, but difficult to be successful at unless you possess some special talents.
Only in America are we all free to achieve what we work for, I for one have a great respect for the average hourly wage earner. He is America...and they should be honored every chance we get...
With all due respect Pinoyinos, your candidate, Hillary Clinton lost to a black man
Obamo. Her brand of socialism which includes statements like yours is a perfect example of thinking from a minority of Americans, never to which will gain much support and rightfully so.Too many people make statements but do not ponder the consequences.
Most people do not want the responsiblities of management or ownership. For these individuals, they come into work, get a fair wage and go home each night. If they wanted more, they would work for it, invest for it and pay the repercussions of the added responsibilities. Leadership is easy to talk about, but difficult to be successful at unless you possess some special talents.
Only in America are we all free to achieve what we work for, I for one have a great respect for the average hourly wage earner. He is America...and they should be honored every chance we get...
Aw, you just spend too much time listening to Rush Limbaugh.
But you're correct on all counts.I think Paddy and SS both make too much and their pay should be regulated! Wage ===>
Post by: MechAg94 on June 15, 2008, 09:55:06 AM
Post by: MechAg94 on June 15, 2008, 09:56:15 AM
Post by: The Annoyed Man on June 15, 2008, 10:26:02 AM
Quote
I think Paddy and SS both make too much and their pay should be regulated! Wage ===> police
Uh, I'm unemployed and have zero earned income. But if you want to guarantee me some monthly/annual minimum, that's ok.
Post by: taurusowner on June 15, 2008, 11:35:28 AM
Shareholders do have some say in CEO's and companies, they can sell their shares. CEO's are partly judged by share price as most of those guys on the board often own a lot of them.
Precisely. If the Board makes some move and see their stock drop a bunch of points in return, they're gonna reconsider that move. That includes the hiring and firing of CEOs.
Post by: The Annoyed Man on June 15, 2008, 11:54:05 AM
Recently, John McCain said that, if elected, he will rein in "excessive" executive/CEO pay. I usually side myself with the free-market / capitalist system and would rather have less regulation. I think our society is over-regulated as it is and putting in more regulation will not help. On the subject of executive pay however, I've leaned more on the side of regulation and through this forum, I'd like to see what people here think of this subject.
Here are my reasons:
1. As a software developer, I have personal experience where the company I worked for awarded stock options to the CEO all the way to directors, but not a single share of stock to the people who actually create the company's products. It was such a lop-sided situation where the chairman and CEO came away with close to 10% of the company's net profits for that year. Non-executive employees who actually make the products work and serve customers get nothing but their 2.5% - 3.5% annual raise. I've spoken to other software engineers and technical people of other engineering fields and I've learned that my experience is not an isolated case.
2. The disparity between the average income and executive pay has never been higher. I think this will polarize society , add fuel to class envy, and will further thin out the middle class ranks. As we all know, the strength of any free society lies in its middle class.
3. Excessive CEO pay is not the result of a free market. In most cases, the approval of executive packages are done by the boards (stock holders don't have a direct say). It is very common to have one person sitting on different corporate boards and be chairman in another. This creates the "country club environment" where "I scratch your back, you scratch mine" arrangements are quite convenient.
I believe that it is goverment's role to promote a level playing field where opportunities are open to all who are willing to put their time and talents to work. Once an enterprise becomes successful, I think it is only just that "awards" should be fairly given and not be monopolized by the executives. I do understand that we all have the option to look for work and be employed with a company of our choosing. We are free to negotiate the terms of our employment and when not treated well, we are free to resign and look for work elsewhere. Executives however, have the same priveleges and MORE. Executives have access to the corporate boards. This access makes it easy for executives to find ways to award themselves on top of whatever it is that's stipulated in their employment contracts.
Looking forward to all your opinions.
Here are my reasons:
1. As a software developer, I have personal experience where the company I worked for awarded stock options to the CEO all the way to directors, but not a single share of stock to the people who actually create the company's products. It was such a lop-sided situation where the chairman and CEO came away with close to 10% of the company's net profits for that year. Non-executive employees who actually make the products work and serve customers get nothing but their 2.5% - 3.5% annual raise. I've spoken to other software engineers and technical people of other engineering fields and I've learned that my experience is not an isolated case.
2. The disparity between the average income and executive pay has never been higher. I think this will polarize society , add fuel to class envy, and will further thin out the middle class ranks. As we all know, the strength of any free society lies in its middle class.
3. Excessive CEO pay is not the result of a free market. In most cases, the approval of executive packages are done by the boards (stock holders don't have a direct say). It is very common to have one person sitting on different corporate boards and be chairman in another. This creates the "country club environment" where "I scratch your back, you scratch mine" arrangements are quite convenient.
I believe that it is goverment's role to promote a level playing field where opportunities are open to all who are willing to put their time and talents to work. Once an enterprise becomes successful, I think it is only just that "awards" should be fairly given and not be monopolized by the executives. I do understand that we all have the option to look for work and be employed with a company of our choosing. We are free to negotiate the terms of our employment and when not treated well, we are free to resign and look for work elsewhere. Executives however, have the same priveleges and MORE. Executives have access to the corporate boards. This access makes it easy for executives to find ways to award themselves on top of whatever it is that's stipulated in their employment contracts.
Looking forward to all your opinions.
John McCain says everything he says on behalf of what is good for John McCain. He's pandering to the collectivists. There are two ways of looking at this - either you believe the collective should make decisions for the individual or you believe only the individual should make decisions on behalf of the individual. He is exactly the same as the robber barons of the 1800s except he hides behind government. I challenge you to find a President who has not taken advantage of his connections and knowledge to become more wealthy. That is exactly what CEOs do. The only difference is that CEOs have less ability to use the legal system to vote money out of someone else's pockets than the President of the United States. It is the ultimate in hypocrisy.
Our current politicians are as crappy as they are for precisely the same reasons that you claim CEO pay is inflated - voters have NO direct representation. The two-party system is a travesty. Every decision made in Washington hurts one group in order to "help" some other because government doesn't generate money, it just takes it away from others.
Post by: thebaldguy on June 15, 2008, 03:57:24 PM
CEO positions seem to be almost a cult. I see them jump from company to company often for more pay after doing a bad job at the last company. It's almost impossible to become a CEO; even with the education, it seems like it's still an "Ol' Boy/Girl network that's hard to get into.
I love how Directors on the company board justify high CEO salaries. "You have to pay good people good money" they say. But when good workers want a raise or a share of the profits, they always seem to say "The company can't afford it". Even better, the fire Americans and move the jobs overseas.
Post by: Scout26 on June 15, 2008, 05:15:46 PM
Quote
2. Hmmm, Astor, Carnegie, Rockefeller, Mellon, Hearst, Vanderbilt, et al Made much, much, more then the average worker as compared to today.
Yeah, robber barons and the sweatshops of the industrial revolution. That's what we want back.
I was referring to the OP's statement:
Quote
The disparity between the average income and executive pay has never been higher.
I asked for proof of his statement. And IIRC, the Industrial Revolution is what help made this country what it is today.
Post by: ilbob on June 15, 2008, 05:23:48 PM
It is also true that a fair number of top level executives got hired of late that turned out to be busts. The shareholders suffered greatly in those cases, and in a fair number of cases took out their wrath on the board.
There is no magic formula for what a good executive is worth. Some situations are just hopeless but someone has to make an effort, and BODs are every bit as susceptible to a silver tongued devil as anyone else.
Post by: Matthew Carberry on June 15, 2008, 09:39:55 PM
Quote
I think Paddy and SS both make too much and their pay should be regulated! Wage ===> police
Uh, I'm unemployed and have zero earned income. But if you want to guarantee me some monthly/annual minimum, that's ok.
Paddy, I'll double what you're not making now. Hell, I'll triple it and give you extra time off.
Post by: cassandra and sara's daddy on June 16, 2008, 03:54:52 AM
Post by: pinoyinus on June 16, 2008, 05:15:21 AM
Quote
I asked for proof of his statement. And IIRC, the Industrial Revolution is what help made this country what it is today
- scout26Wow, I thought this point was common knowledge. Anyone reading any decent business magazine or newspaper would know this is a fact! Several studies and articles have been written comparing the ratio between the average CEO pay and the avergae US income. Here's a few links:
http://www.epi.org/content.cfm/webfeatures_snapshots_20060627
http://www.finfacts.com/irelandbusinessnews/publish/article_10002825.shtml
http://money.cnn.com/2005/08/26/news/economy/ceo_pay/
http://articles.moneycentral.msn.com/Investing/Extra/CEOsNearRecordPayRatios.aspx
http://www.businessweek.com/1997/16/b35231.htm
http://www.pbs.org/now/politics/executivepay06.html
Post by: pinoyinus on June 16, 2008, 05:28:03 AM
I believe that it is goverment's role to promote a level playing field where opportunities are open to all who are willing to put their time and talents to work.
Negative. The purpose of government is to secure liberty and personal freedoms. Promoting a level playing field is slang for socialism....
This would have been a perfect justifictaion for stock insider trading. So why do most people disagree that insider trading is not good and that the govt. should regulate the stock market? The reason is that the govt. is also there to promote justice.
Post by: pinoyinus on June 16, 2008, 06:03:54 AM
Pinoyinos wrote, "I believe that it is goverment's role to promote a level playing field where opportunities are open to all who are willing to put their time and talents to work."
With all due respect Pinoyinos, your candidate, Hillary Clinton lost to a black man Obamo. Her brand of socialism which includes statements like yours is a perfect example of thinking from a minority of Americans, never to which will gain much support and rightfully so.
Too many people make statements but do not ponder the consequences.
Most people do not want the responsiblities of management or ownership. For these individuals, they come into work, get a fair wage and go home each night. If they wanted more, they would work for it, invest for it and pay the repercussions of the added responsibilities. Leadership is easy to talk about, but difficult to be successful at unless you possess some special talents.
Only in America are we all free to achieve what we work for, I for one have a great respect for the average hourly wage earner. He is America...and they should be honored every chance we get...
With all due respect Pinoyinos, your candidate, Hillary Clinton lost to a black man
Obamo. Her brand of socialism which includes statements like yours is a perfect example of thinking from a minority of Americans, never to which will gain much support and rightfully so.Too many people make statements but do not ponder the consequences.
Most people do not want the responsiblities of management or ownership. For these individuals, they come into work, get a fair wage and go home each night. If they wanted more, they would work for it, invest for it and pay the repercussions of the added responsibilities. Leadership is easy to talk about, but difficult to be successful at unless you possess some special talents.
Only in America are we all free to achieve what we work for, I for one have a great respect for the average hourly wage earner. He is America...and they should be honored every chance we get...
Hillary is not my candidate. I can think for myself. I don't take cues or talking points from politicians and mouth them. In my original post, I stated my reasons for belieiving the way I do about CEO pay. One of those reasons is borne out of my personal experience. And BTW, I did leave that company. It was said that "they (average hourly wage earner) should be honored every chance we get". Do we really honor them by allowing boards/CEO's to cut their pay while they give executives even bigger raises and stock options? (as in the case of NWA) Do we honor them by saying "this will correct itself. In the meantime tough luck!"? CEO's and the average employees made seperate contracts with the corporations - fine. But we all know that CEOs and executives get bonuses on top of what is stated in their employment contracts. In my personal experience, as well as from a number of people I've spoken to, the bonuses didn't trickle down to the rank and file. Given that some employees performed poorly, I guess I can understand if some employees don't get a bonus. But when every non-managerial employee doesn't get a bonus at a time when all the executives do, I think it's tantamount to spitting on the employee's face rather than honoring them. How do you justify that? Bonuses and stock options are good only for CEOs, executives and managers but not for other employees?
Post by: MechAg94 on June 16, 2008, 07:10:31 AM
Post by: JonnyB on June 16, 2008, 10:38:54 AM
"It was said that "they (average hourly wage earner) should be honored every chance we get". Do we really honor them by allowing boards/CEO's to cut their pay while they give executives even bigger raises and stock options? (as in the case of NWA) Do we honor them by saying "this will correct itself. In the meantime tough luck!"?"
The wager earner *is* honored. Every payday, they get what they earned. They agree to work; the company agrees to pay them a certain wage for their work. If that wage is insufficient, the worker is free to go where the pay is higher. The free market really, really does work.
jb
Post by: RevDisk on June 16, 2008, 04:35:02 PM
Quote
I think Paddy and SS both make too much and their pay should be regulated! Wage ===> police
Uh, I'm unemployed and have zero earned income. But if you want to guarantee me some monthly/annual minimum, that's ok.
Start making over $50k and watch how much of your pay gets eaten away by taxes. Hell, just the ones listed in your payroll stub are bad enough. The multitude of 'invisible' taxes are probably roughly equal to the taxes you see taken out. While there are plenty of bad CEO's that run the company into the ground and collect insane amounts of money for it, the solution of government regulation would be worse than the current situation.
Here's a more practical solution. Do not work for a company that plays the golden parachute game. And don't invest money in it. Trust me, ALL boards watch the stock price like a hawk. If it tanks, the CEO is out the door.
Post by: Firethorn on June 17, 2008, 06:04:51 AM
Here's a more practical solution. Do not work for a company that plays the golden parachute game. And don't invest money in it. Trust me, ALL boards watch the stock price like a hawk. If it tanks, the CEO is out the door.
Alternatively, actually pay attention to the doings of the board of directors for the companies you invest in, and vote them out if they start playing golden parachute.
What you're suggesting is along the lines of telling people to move out of high crime areas, rather than suggesting how to solve the crime problem.
Post by: pinoyinus on June 17, 2008, 11:51:25 AM
Here's a more practical solution. Do not work for a company that plays the golden parachute game. And don't invest money in it. Trust me, ALL boards watch the stock price like a hawk. If it tanks, the CEO is out the door.
The above suggestion is not a practical solution. It just wouldn't work. As a middle class person holding stocks in your brokerage account, what's the most number of stocks do you own of one company? Carl Icahn, a billionaire investor holding hundreds of thousands of shares (if not millions), is now trying to oust the Yahoo board for its failure to handle the Microsoft offer. Although pundits are giving him a 50-50 chance, it is not a slam dunk by any measure. This is Carl Icahn with billions of dollars in resources and yet not a slam dunk! Based on that, how much of a chance do you think does a Joe SixPack have with stock holder activism? C'mon stop living in a dream world. The institutional investors / big financial companies, who hold a bulk of shares, have a special relationship with the boards. It is the boards who give business to them (for loans, stock underwriting, auditing deals, etc.) so there's not much of a chance that they'll go against the boards either. This is part of the reason why Enron was able to do what it did. Most of the big banks looked the other way while Enron bilked shareholders of their money including its own employees. The rank and file employees of Enron lost big but most of the executives (except for those who got prosecuted) made out pretty nicely.
Post by: LAK on June 21, 2008, 12:04:08 AM
pinoyinus
Quote
Most of the big banks looked the other way while Enron bilked shareholders of their money including its own employees. The rank and file employees of Enron lost big but most of the executives (except for those who got prosecuted) made out pretty nicely
Astounding. I would never have thought. Any idea which banks it were who took part in this awful affair?------------------------------------
http://searchronpaul.com
http://ussliberty.org/oldindex.html
http://www.gtr5.com
http://ssunitedstates.com
Post by: pinoyinus on June 21, 2008, 05:28:01 AM
Quote
Astounding. I would never have thought. Any idea which banks it were who took part in this awful affair?
Citigroup was one of them. Here's a link to a business artice: http://www.nytimes.com/2008/03/27/business/27enron.html?ref=business
You might say that there was no conviction. Yet, which innocent company would be willing to pay $1.66 billion for no reason?
Post by: pinoyinus on June 21, 2008, 05:31:23 AM
Here's another where the SEC settled with both JP Morgan and Citigroup. Link: http://www.sec.gov/news/press/2003-87.htm. You can find a lot more if you google it yourself.
Post by: old school on June 21, 2008, 07:47:51 AM
Except that the employer is actually the public shareholder, not the board of directors. The money doesn't belong to either the board or the CEO or the management-it's not their money, yet they spend it on each other as if it were.
Different standards apply when you are playing with other people's money, even in a free market, imho.
You are the first one to completely nail it in this thread.
The problem with what is going on in many of these large corporations is the terrible disservice to its shareholders. It used to be that all board room decisions were made for long term feasibility. Executives job was to insure the future of the company for the investors and the employees that contribute to the success of the company. Now it can be be equated to a smash and dash robbery. Executives are looking for signing bonuses, big non performance based salaries and huge golden parachutes.
The question you have to ask is why? Why would the board hire somebody with this type of pay package instead of a performance based pay package with long term residuals?
The answer is greed and wallstreet pressure. Board members have become more concerned with today's stock prices than the long term success of thier company. They are literally looking to hire a name that will make thier stock go up as opposed to hiring a man who can make thier company better. It is an absolute mess.
Post by: Scout26 on June 21, 2008, 12:56:39 PM
Except that the employer is actually the public shareholder, not the board of directors. The money doesn't belong to either the board or the CEO or the management-it's not their money, yet they spend it on each other as if it were.
Different standards apply when you are playing with other people's money, even in a free market, imho.
You are the first one to completely nail it in this thread.
The problem with what is going on in many of these large corporations is the terrible disservice to its shareholders. It used to be that all board room decisions were made for long term feasibility. Executives job was to insure the future of the company for the investors and the employees that contribute to the success of the company. Now it can be be equated to a smash and dash robbery. Executives are looking for signing bonuses, big non performance based salaries and huge golden parachutes.
The question you have to ask is why? Why would the board hire somebody with this type of pay package instead of a performance based pay package with long term residuals?
The answer is greed and wallstreet pressure. Board members have become more concerned with today's stock prices than the long term success of thier company. They are literally looking to hire a name that will make thier stock go up as opposed to hiring a man who can make thier company better. It is an absolute mess.
Yep, because of the differences in the way dividends and captial gains are taxed. Dividends promote long term growth, capital gains are short term.
Post by: LAK on June 22, 2008, 01:35:09 AM
Thanks; I did read much about the Enron affair, but missed the banks. I still recall the audio recording aired on national radio where some chuckling Enron slick made a reference to another concerning ".... those ______ little old ladies ... [etc]".
In addition to their crimes, it is the callous arrogance of these people that really bothers me. And to me, anything thing that warrants that kind of settlement ought to have some criminal charges and penalties for those at the highest levels. The callous arrogance of these people really bothers me.
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Post by: RevDisk on June 22, 2008, 08:30:46 PM
Here's a more practical solution. Do not work for a company that plays the golden parachute game. And don't invest money in it. Trust me, ALL boards watch the stock price like a hawk. If it tanks, the CEO is out the door.
Alternatively, actually pay attention to the doings of the board of directors for the companies you invest in, and vote them out if they start playing golden parachute.
What you're suggesting is along the lines of telling people to move out of high crime areas, rather than suggesting how to solve the crime problem.
When solving the existing problem creates worse problems... Well, whatcha gonna do? Government manditory salary caps are a bad idea. Re-structuring the rules for publically held companies during a recession ain't a great idea. Problem is, for any actions short of outright felonies, ousting directors on the board is rather difficult. Any sizeable company is either owned by a very large group of investors, or the majority of their stock is owned by financial institutes. See pinoyinus' post about Yahoo.
My suggestions were offered to the individual reader. As a way for THEM not to get burned. Not to fix the system. Because I'll admit it, I don't see any really decent solution that wouldn't cause signficant damage.
Post by: pinoyinus on June 23, 2008, 05:24:13 AM
Post by: seeker_two on June 23, 2008, 06:50:20 AM
...currently, I have to do it for free.....
Post by: Firethorn on June 23, 2008, 07:36:01 AM
I wouldn't recommend that govt' use some arbitrary number as a cap. I also don't agree that private companies should fall under the same regulation. Private companies should be able to do what they want. Perhaps a cap based on a multiple of average rank and file salary. Let's say 100. So if the average employee salary is $50K, then the CEO can make $5M. I don't think $5M is a bad income for a CEO. The CEO can still make $50M if he's really talented (although that would mean that the average rank & file salary should be making $500K). There may be other soluitions out there that can come from far more brilliant minds. But the current situation is just not good for stock holders, and employees.
I think that it'd screw up more stuff than it'd solve. For example, how would you rate stock options and such? Why should the CEO of Walmart(or other large company) make less than the CEO of a small engineering company(for example)?
I seen an excessive tendency to 'contract' out low wage labor. Rather than Walmart hiring workers directly, I see them only hiring managers and up, and creating shell companies to get their sales people and such. They already did it with cleaning crews, after all.
Post by: pinoyinus on June 23, 2008, 08:16:03 AM
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I think that it'd screw up more stuff than it'd solve. For example, how would you rate stock options and such? Why should the CEO of Walmart(or other large company) make less than the CEO of a small engineering company(for example)?
I think the basis should be total compensation. If options are hard/impossible to quantify at the time of the award, then give the rank and file employees either stocks/cash at the time of excercise. Why should the CEO of Walmart make less than the CEO of a small engineering company? I don't know. But if CEO A makes $100M and CEO B makes $150M, it's very hard to be outraged at how bad CEO A is getting it. The situation just isn't the same when you have the rank and file employees making $30K and a CEO making $100M+. Take the case of Occidental Petroleum and IAC Interactive where the CEOs made $322 million and $295 million respectively see http://www.forbes.com/2007/05/03/ceo-executive-compensation-lead-07ceo-cx_sd_0503ceocompensationintro.html. I doubt if the average income in these companies are in the vicinity of $200K. But assuming that it is, that's a whopping ratio of 1:1500!
Post by: Racehorse on June 23, 2008, 09:11:45 AM
Yes, it very often means that the minority or individual shareholders get screwed, but if they don't like it, they don't have to invest. No one is forced to buy stock in any company.
By the way, the executives at many corporations are also often some of the largest shareholders.
Post by: old school on July 01, 2008, 03:51:37 PM
Overpaying CEOs
by Ralph Nader
July 1, 2008
The worst top management of giant corporations in American history is also by far the most hugely paid. That contradiction applies as well to the Boards of Directors of these global companies.
Consider these illustrations:
The bosses of General Motors (GM) have presided over the worst decline of GM shares in the last fifty years, the lowering of GM bonds to junk status, the largest money losses and layoffs of tens of thousands of workers. Yet these top executives are still in place and still receiving much more pay than their successful counterparts at Toyota.
GMs stock valuation is under $7 billion dollars, while Toyota is valued at over $160 billion. Toyota, having passed GM in worldwide sales, is about to catch up with and pass GM in sales inside the United States itself!
GMs executives stayed with their gas guzzling SUVs way beyond the warning signs. Their vehicles were uninspiring and technologically stagnant in various ways. They were completely unprepared for Toyotas hybrid cars and for the upward spiral in gasoline prices. Theyre cashing their lucrative monthly checks with the regular votes of confidence by their hand-picked Board of Directors.
About the same appraisal can be made of Ford Motor Co., which at least brought in new management to try to do something about that once famous companys sinking status.
Then there are the financial companies. Top management on Wall Street has been beyond incompetent. Wild risk taking camouflaged for years by multi-tiered, complex, abstract financial instruments (generally called collateralized debt obligations) kept the joy ride going and going until the massive financial hot air balloon started plummeting. Finally told to leave their high posts, the CEOs of Merrill-Lynch and Citigroup took away tens of millions of severance pay while Wall Street turned into Layoff Street.
The banks, investment banks and brokerage firms have tanked to levels not seen since the 1929-30 collapse of the stock market. Citigroup, once valued at over $50 per share is now under $17 a share.
Washington Mutual the nations largest savings bank chain was over $40 a share in 2007. Its reckless speculative binge has driven it down under $5 a share. Yet its CEO Kerry Killinger remains in charge, with the continuing support of his rubberstamp Board of Directors. A recent $8 billion infusion of private capital gave a sweetheart deal to these new investors at the excessive expense of the shareholders.
Countrywide, the infamous giant mortgage lender (subprime mortgages) is about to be taken over by Bank of America. Its CEO is taking away a reduced but still very generous compensation deal.
Meanwhile, all these banks and brokerage houses investment analysts are busy downgrading each others stock prospects.
Over at the multi-trillion dollar companies Fannie Mae and Freddie Mac, the shareholders have lost about 75 percent of their stock value in one year. Farcically regulated by the Department of Housing and Urban Affairs, Fannie and Freddie were run into the ground by taking on very shaky mortgages under the command of CEOs and their top executives who paid themselves enormous sums.
These two institutions were set up many years ago to provide liquidity in the housing and loan markets and thereby expand home ownership especially among lower income families. Instead, they turned themselves into casinos, taking advantage of an implied U.S. government guarantee.
The Fannie and Freddie bosses created another guarantee. They hired top appointees from both Republican and Democratic Administrations (such as Deputy Attorney General Jamie Gorelick) and lathered them with tens of millions of dollars in executive compensation. In this way, they kept federal supervision at a minimum and held off efforts in Congress to toughen regulation. These executives are all gone now, enjoying their maharajan riches with impunity while pensions and mutual funds lose and lose and lose with no end in sight, short of a government-taxpayer bailout.
Over a year ago, leading financial analyst Henry Kaufman and very few others warned about undisciplined (read unregulated) and mis-pricing of lower quality assets. Mr. Kaufman wrote in the Wall Street Journal of August 15, 2007 that If some institutions are really too big to fail, then other means of discipline will have to be found.
There are ways to prevent such crashes. In the nineteen thirties, President Franklin Delano Roosevelt chose stronger regulation, creating the Securities and Exchange Commission (SEC) and several bank regulatory agencies. He saved the badly listing capitalist ship.
Today, there is no real momentum in a frozen Washington, D.C. to bring regulation up to date. To the contrary, in 1999, Congress led by Senator McCains Advisor, former Senator Phil Gramm and the Clinton Administration led by Robert Rubin, Secretary of the Treasury, and soon to join Citibank, de-regulated and ended the wall between investment banks and commercial banking known as the Glass-Steagall Act.
Clinton and Congress opened the floodgates to rampant speculation without even requiring necessary and timely disclosures for the benefit of institutional and individual investors.
Now the entire U.S. economy is at risk. The domino theory is getting less theoretical daily. Without investors obtaining more legal authority as owners over their out of control company officers and Boards of Directors, and without strong regulation, corporate capitalism cannot be saved from its toxic combination of endless greed and maximum powerwithout responsibility.
Uncle Sam, the deeply deficit ridden bailout man, may have another taxpayers-to-the-rescue operation for Wall Street. But dont count on stretching the American dollar much more without devastating consequences to and from global financial markets in full panic.
Consider the U.S. dollar like an elastic band. You can keep stretching this rubber band but suddenly it BREAKS. Our country needs action NOW from Washington, D.C.
Post by: Balog on July 02, 2008, 03:49:07 PM
Post by: Scout26 on July 02, 2008, 04:13:17 PM
You're quoting Ralph Nader as some kind of economic expert?
Yeah, that's an unbiased source....
Post by: pinoyinus on July 03, 2008, 09:35:28 AM
You're quoting Ralph Nader as some kind of economic expert?
instead of focusing on the messenger (Ralph Nader), I think it would be more interesting if you would argue against the points he raised in his article.
Post by: Balog on July 03, 2008, 10:15:55 AM
You're quoting Ralph Nader as some kind of economic expert?
instead of focusing on the messenger (Ralph Nader), I think it would be more interesting if you would argue against the points he raised in his article.
I could respond by quoting Infowars on how it's all a plot to bring on the NWO. Sources do matter, especially in Op-Eds. I don't feel the need to rebut his "arguments" anymore than I'd feel the need to rebut the the Unibomber's manifesto if someone posted it as a valid source.
Post by: xavier fremboe on July 03, 2008, 03:46:28 PM
<rant>I understand that most of the opinions have to do with a publicly traded company perspective, but I take offense. I am a minority owner of a small business. I started my business 9 years ago with my own money. I've seen up and down, fat and lean. I've had to react to market changes and opportunities. I now own equipment that I don't know how to run, which I never thought would happen. My partner and I have always been 'hands on'. But, at a certain point it makes no sense for us to be running equipment. I have employees who are more skilled at it than I am, and will be more innovative. I no longer provide the services I sell, so I am the CEO you are talking about.
Here's what my partner and I bring to the table. We have bet everything, and I mean personal guarantees on everything less retirement funds, on this business. My fortunes rise and fall with my ability to predict problems and exploit opportunities. My ability to build a moat protects not me, but also my employees.
Who gets paid last? I do. Try keeping employees after missing a payroll check. In our first four years in business, I skipped a total of 52 weeks of paychecks. Was I compensated handsomely in subsequent years? Yes. Hell, yes. Thankfully yes.
My point in all of this is as follows. Paddy and others will argue that the ownership of the means of production is not the basis for the discrepancy between upper level pay and production pay (Marx & Engels Playbook Page 1, Play 1). That is total and utter BS. If my business goes in the toilet, I get to close it down. I get to ride the plane all of the way to the scene of the accident, plus I get to clean up the mess. My employees will get sterling letters of recommendation and my assistance in finding new work. Risk should yield greater reward.
To the OP, if you think your CEO is making too much money off of your labor, quit and find a job where your skills are more valued. It is a free market for labor as well. If I want to keep my employees, I have to keep them happy where they are and pleased with my leadership. Otherwise the time and training that I have invested in them is wasted. They will leave my company to my competitors or just leave period.
If you are concerned with CEO pay, subscribe to a Motley Fool newsletter or two. They tend to get nervous when management's fate isn't shackled to the shareholder's, and will let you know when to be uncomfortable.
</rant>
Post by: Firethorn on July 05, 2008, 07:11:39 PM
To the OP, if you think your CEO is making too much money off of your labor, quit and find a job where your skills are more valued. It is a free market for labor as well. If I want to keep my employees, I have to keep them happy where they are and pleased with my leadership. Otherwise the time and training that I have invested in them is wasted. They will leave my company to my competitors or just leave period.
By the sound of it, you're not a CEO, your the owner of the business. Relatively speaking, a CEO is a different sort of beast altogether than a Owner-Manager - A CEO is merely the 'top employee'.
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If you are concerned with CEO pay, subscribe to a Motley Fool newsletter or two. They tend to get nervous when management's fate isn't shackled to the shareholder's, and will let you know when to be uncomfortable.
A very good point. Personally, I'd tend towards tying executive pay to long term stock performance - not just next week or next years.
To an extent, CEO pay tends to be high for ailing companies because they're looking for a golden boy to come save them - I call it the quarterback problem. There's plenty of quarterbacks(CEOs) out there, but there's only 1 'top' quarterback. This results in a bidding war, which gets expensive.
Still, I think that, in some companies at least, the executives need to be fired and replaced with better ones - that won't go paying millions to a failed CEO.
Post by: Silver Bullet on July 06, 2008, 10:26:26 AM
Jo Anne Worley, talking about her husband Boris:
"Boris says capitalism doesn't work. But then, neither does Boris."
Post by: pinoyinus on July 07, 2008, 07:06:16 AM
You are not the CEO that I am talking about. If you read previous posts, I clearly said that I don't think regulation should apply to private businesses. What I'm talking about are publicly traded companies where boards/CEO's "play" with other people's money. Yes, most if not all board members/executives do own stock so they're also palying with their own money. But most of the money comes from mutual funds and retirement funds owned by poor "laborers" like me. Let's also remember that a lot, if not most, of all those stock were awarded to executives as options.
Let me say that I admire people who have the entrepreneural guts and skills, who start a company and whose success and failure are tied to their company's fate. Nowadays however, it's not so difficult to find a publicly traded company which has been run poorly by a CEO and that CEO gets to have that golden parachute. So the CEO gets off the ship and makes out very well. In a lot of these cases, the outgoing CEO can afford to retire. But the ordinary employees are left out to dry. The irony of it all is that the CEO makes hundreds of millions of dollars while running the company to the ground. If we can't see anything wrong with that system, then perhaps we wouldn't see anything wrong with child labor as well. Perhaps some people here, although they won't admit to it, would rather that we go back to the time of the rubber barons, sweat shops and unsafe working conditions for those poor laborers. If those poor laborers don't like the sweat shop conditions then they should just go find jobs somewhere else right? But no. Whether we like it or not, a majority of the people in this country want those poor laborers to have some form of dignity.
I do not like our welfare system. If an able person refuses to work, then he doesn't deserve a paycheck. I also recognize that an investor has a right to have a decent return from his investments commensurate with the risks that he takes. But when a person is employed and puts out the best work that he can, I think he's also entitled to the same "pork barrel" that executives and boards dig into. I believe that the success of a company is not the result of the CEO's work alone. It is the result of the collaboration of the workers in that company from all levels. I do recognize that the workers from different levels/function also contribute to the success in different ways and in varying levels of importance. That's why I'm not advocating a marxist vioew of getting paid "in accordance with one's needs". But if a CEO comes away with a $200 million bonus on top of what's stated in his contract as the agreed salary, at a time when employees get a turkey and $100, I just think that there's something terribly wrong. Am I the only seeing it?
Post by: cordex on July 07, 2008, 09:35:09 AM
What I'm talking about are publicly traded companies where boards/CEO's "play" with other people's money. Yes, most if not all board members/executives do own stock so they're also palying with their own money. But most of the money comes from mutual funds and retirement funds owned by poor "laborers" like me.
A board and CEO are hired with the intent that they "play" with other people's money. That's their job.Nowadays however, it's not so difficult to find a publicly traded company which has been run poorly by a CEO and that CEO gets to have that golden parachute. So the CEO gets off the ship and makes out very well. In a lot of these cases, the outgoing CEO can afford to retire. But the ordinary employees are left out to dry. The irony of it all is that the CEO makes hundreds of millions of dollars while running the company to the ground.
There are a number of assumptions here, most notably:1. That hotshot CEOs whose companies fail are necessarily at fault for that failure. Many times, very high priced CEOs are brought in because there are serious problems at a company. If I were in that CEOs shoes, I wouldn't want my pay tied to the success of a dying company I wasn't sure I'd be able to save, so before I would take a risky job, I'd want to know I was going to be paid for my effort. If you bring in a specialist doctor after the previous doctor had let the patient deteriorate too far, should the specialist be held responsible for the death of the patient?
2. That boards hire screwup CEOs with huge salaries at whim because they only care about giving their buddies millions and millions of dollars. Your average board member stands to lose a lot of money if the CEO brings the company down in flames. If I were in the board's shoes, I'd probably be willing to bet on the best I could afford, especially if the company is already in trouble.
3. That screwball CEO failures with huge compensation packages are the norm. I'm not convinced that's the case.
If we can't see anything wrong with that system, then perhaps we wouldn't see anything wrong with child labor as well. Perhaps some people here, although they won't admit to it, would rather that we go back to the time of the rubber barons, sweat shops and unsafe working conditions for those poor laborers. If those poor laborers don't like the sweat shop conditions then they should just go find jobs somewhere else right? But no. Whether we like it or not, a majority of the people in this country want those poor laborers to have some form of dignity.
"Poor laborers" in this country are unbelievably wealthy by the standards of any other time and most other places. Many "poor laborers" in this country have substantial income to spend on luxuries. Trying to draw parallels between "poor laborers" of today and sweatshop workers of yesteryear is a non-starter.Oh, and you can't give away dignity.
I do not like our welfare system. If an able person refuses to work, then he doesn't deserve a paycheck. I also recognize that an investor has a right to have a decent return from his investments commensurate with the risks that he takes. But when a person is employed and puts out the best work that he can, I think he's also entitled to the same "pork barrel" that executives and boards dig into.
Why?I believe that the success of a company is not the result of the CEO's work alone. It is the result of the collaboration of the workers in that company from all levels. I do recognize that the workers from different levels/function also contribute to the success in different ways and in varying levels of importance.
Agreed.That's why I'm not advocating a marxist vioew of getting paid "in accordance with one's needs". But if a CEO comes away with a $200 million bonus on top of what's stated in his contract as the agreed salary, at a time when employees get a turkey and $100, I just think that there's something terribly wrong. Am I the only seeing it?
I won't argue whether or not your hypothetical case is right or wrong. I don't know what the CEO did that made him worth a $200 million bonus. Typically bonuses are assigned based on exceeding certain criteria, so if the CEO managed to turn a failing company around and triple its revenue, maybe they are worth that bonus.
Post by: pinoyinus on July 07, 2008, 11:51:59 AM
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"Poor laborers" in this country are unbelievably wealthy by the standards of any other time and most other places. Many "poor laborers" in this country have substantial income to spend on luxuries. Trying to draw parallels between "poor laborers" of today and sweatshop workers of yesteryear is a non-starter.
There are also no parallels between CEO pays of today and CEO pays of yesteryears. So what's the point? I just simply refuse the argument that CEOs deserve hunderds of millions of dollars but your averge employee should be happy with the current situation because hey they're far better off than they were fifty years ago.
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I do not like our welfare system. If an able person refuses to work, then he doesn't deserve a paycheck. I also recognize that an investor has a right to have a decent return from his investments commensurate with the risks that he takes. But when a person is employed and puts out the best work that he can, I think he's also entitled to the same "pork barrel" that executives and boards dig into.
Why?
For the same reason that the CEOs are entitled to their bonuses and stock options. Again maybe not to the same amounts. But the current situation where employees get nothing and CEO's get the most of everything is not my idea of "fair".Why?
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I won't argue whether or not your hypothetical case is right or wrong. I don't know what the CEO did that made him worth a $200 million bonus. Typically bonuses are assigned based on exceeding certain criteria, so if the CEO managed to turn a failing company around and triple its revenue, maybe they are worth that bonus.
Look up the previous posts where I cited 2 publicly traded companies where the total CEO compensation amounted to $300 million++ each for one year alone (year 2007). I find it ironinc that we question why the average worker should get his share of bonuses and stock options but we're very quick to give the CEOs the benefit of the doubt. Well let's assume that the CEO did deserve his $200 million bonus/stock options because the company was able to turn around and have it's profit tripled. But don't tell me that the CEO did everything while everyone watched and did nothing. I thought we agreed that the success of a company is not the result of the CEO's work alone and that the success is the result of the collaboration of the workers in that company from all levels. So if the CEO deserves his $200 million why is it that the average worker deserves nothing? Yeah, yeah yeah - I know - the employee gets his salary but so does the CEO. Again, this sort of thing does not happen in all US public companies but its an undeniable fact that the ratio between CEO and employee compensation has never been higher.
Post by: Ezekiel on July 07, 2008, 01:33:54 PM
I find it ironinc that we question why the average worker should get his share of bonuses and stock options but we're very quick to give the CEOs the benefit of the doubt.
Because the CEO is a skilled laborer?
Pawns get treated like pawns, in any bureaucracy. Their best hope is to find a manner in which to cease being pawns: either reject the farcical system or be/do/become something worthwhile.
The difference is that the amount of available pawns is nearly endless. CEO's? Capable or otherwise? Not so much.
Post by: Firethorn on July 07, 2008, 04:16:57 PM
Personally, I don't see much in the way of objection to CEO pay when stocks are rising and profits are being made. I hear a lot of objections when a CEO leaves a company, gets a multimillion golden parachute while leaving the company worse off than before.
It smacks of rewarding failure. Much like a quarterback(or other star player), you see no complaints when they're winning. If they're screwing up, then the complaints start.
Post by: cordex on July 09, 2008, 04:55:22 AM
Personally, I don't see much in the way of objection to CEO pay when stocks are rising and profits are being made. I hear a lot of objections when a CEO leaves a company, gets a multimillion golden parachute while leaving the company worse off than before.
If it's a serious problem, executive contracts need to be written differently to allow for terminating the skunky CEO without giving a golden parachute. I do think that companies which take that approach will be less likely to entice the best and brightest CEOs, however.Something tells me that screwup CEOs getting hundreds of millions of dollars is like a man bites dog story in that it gets reported more because it is rare and seems newsworthy.
There are also no parallels between CEO pays of today and CEO pays of yesteryears. So what's the point? I just simply refuse the argument that CEOs deserve hunderds of millions of dollars but your averge employee should be happy with the current situation because hey they're far better off than they were fifty years ago.
I'm not sure I follow you. You kept hearkening back to the industrial revolution by comparing aborers of today with starving workers in sweatshops. I pointed out that such a comparison is unfair because in this day and age, even our poor can afford luxuries well beyond the necessities of life. Whether or not CEOs "deserve" their multi-million dollar bonuses in general I can't argue, but that's what the market will obviously bear, so I'm not sure why you're so worried about it. If the companies can't afford to pay them those kinds of wages, they either won't, or they'll go under.If your average employee isn't happy, there are plenty of jobs out there at companies which don't reward CEOs with hundreds of millions of dollars.
For the same reason that the CEOs are entitled to their bonuses and stock options. Again maybe not to the same amounts. But the current situation where employees get nothing and CEO's get the most of everything is not my idea of "fair".
Different companies are run different ways. At my company (a privately owned company whose current CEO is also the owner), employees are rewarded annually based on the success of the company and the length of their service. While I'm happy about that, it's a bonus, not the salary I expect to receive from the company. And I don't get rubbed wrong that the execs get more of a bonus than I do. They are also the first to take cuts when we have to tighten our belt.Again, if you don't like your total compensation package with a company, or if you don't like the CEO's compensation package specifically, go elsewhere - there are plenty of other options out there. I just don't see why the government would need to get involved or set caps on any sort of earning.
Look up the previous posts where I cited 2 publicly traded companies where the total CEO compensation amounted to $300 million++ each for one year alone (year 2007).
I didn't argue that it never happened. Why did those CEOs receive those bonuses? Were they just out of the blue gifts for being good ol' boys? Or had those CEOs exceeded some benchmark for corporate productivity, sales, profits, expansion, etc., that made them (in the eyes of the board) worth the bonus?I find it ironinc that we question why the average worker should get his share of bonuses and stock options but we're very quick to give the CEOs the benefit of the doubt. Well let's assume that the CEO did deserve his $200 million bonus/stock options because the company was able to turn around and have it's profit tripled. But don't tell me that the CEO did everything while everyone watched and did nothing. I thought we agreed that the success of a company is not the result of the CEO's work alone and that the success is the result of the collaboration of the workers in that company from all levels. So if the CEO deserves his $200 million why is it that the average worker deserves nothing?
This thread is rife with discontent about CEOs who "run their company into the ground." If we're so quick to blame the CEO for corporate failure, I'm not sure why we don't assign a similar proportion of responsibility for success.Employees, customers and investors can vote with their feet and their dollars. If an employee is easily replaced, it stands to reason that their contributions are of less value, does it not?
To be clear, I'm not CEO material. I'm just not cut out for that. However, I do have the pleasure to know several executive types who are CEO/COO/President material. My guess is that the people who claim that executives work no harder than the average Joe, and don't have any special skills beyond your average lay worker either don't really know any execs or have a very small sample of incompetent execs they are using as a basis for their opinion. Yeah, there are some worthless ones out there - as in any job - but it would be a mistake to assume that just anyone could do the job well.
Yeah, yeah yeah - I know - the employee gets his salary but so does the CEO. Again, this sort of thing does not happen in all US public companies but its an undeniable fact that the ratio between CEO and employee compensation has never been higher.
So what? I'm still trying to understand why we should involve the government to "fix" the problem? It's not as if the government is particularly known for its fairness or efficiency. Look, I understand thinking the situation is unfair. I support rewarding employees for their contributions, but I fail to see why the government needs to step in to make things fair in your eyes.I also think we're mixing up a number of subjects:
1. Should CEOs ever get huge bonuses?
2. Should CEOs get huge bonuses without rewarding every janitor and fry cook in the business?
3. Should CEOs get huge bonuses when the company fails?
4. Should CEOs get huge bonuses when the company fails and it is their fault?
5. Should the government step in and make the situation more "fair" by adding more restrictions, laws and regulations, setting salary caps and bonus caps and generally meddling in corporate affairs?
My answers:
1. Sure, if the market will bear it.
2. Sure, if the market and employees will bear it.
3. It depends on what is in their contract.
4. It depends on what is in their contract, but I'd hope that they wouldn't.
5. Absofrigginlutely not.
Post by: longeyes on July 09, 2008, 06:44:55 AM