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Thread: CEO compensation rant

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    Veteran Member dishis's Avatar
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    Default CEO compensation rant

    Why do people care about this. I'm tired of hearing about it. If I'm a stockholder I want to get the best possible person to run the company. If it cost $100 million a year and a majority of the stockholders agree so be it. If you don't have stock in the company its none of your business. If all taxes are paid then then its not the gov't business either. I can understand trying to limit CEO compensation on gov't bailouts, but you still want to be able to attract the best leadership and not lose important people to competitors. -------End of Rant I feel better now
    “If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand”

    Milton Friedman

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    Default Re: CEO compensation rant

    Problem being the highest paid CEO's aren't always the best CEO's. How about some pay for performance???

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    Default Re: CEO compensation rant

    The issue is more the fact that CEO's are getting fat salaries and compensation when they do nothing AND the company goes down the toilet. Not to mention many of them are getting millions for months of work. It's ridiculous.

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    Veteran Member dishis's Avatar
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    Default Re: CEO compensation rant

    Quote Originally Posted by jester214 View Post
    The issue is more the fact that CEO's are getting fat salaries and compensation when they do nothing AND the company goes down the toilet. Not to mention many of them are getting millions for months of work. It's ridiculous.
    Quote Originally Posted by Richard_Head View Post
    Problem being the highest paid CEO's aren't always the best CEO's. How about some pay for performance???
    So are you saying a company should not be able to decide pay for its own executives ?
    “If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand”

    Milton Friedman

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    Default Re: CEO compensation rant

    no, they are saying that rewarding people for FAILURE with millions is hardly a smart thing to advocate. unless you're married to a CEO or something.

    plus, CEOs often skate on the tax-paying part of things as well.

    welfare is apparently a-ok if it's for a rich white guy's golf buddy...

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    Veteran Member dishis's Avatar
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    Default Re: CEO compensation rant

    Quote Originally Posted by miabella View Post
    no, they are saying that rewarding people for FAILURE with millions is hardly a smart thing to advocate. unless you're married to a CEO or something.

    plus, CEOs often skate on the tax-paying part of things as well.

    welfare is apparently a-ok if it's for a rich white guy's golf buddy...
    All I am saying is let the stockholders decide if the CEO is a failure
    “If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand”

    Milton Friedman

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    Featured Member minnow's Avatar
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    Default Re: CEO compensation rant

    Quote Originally Posted by dishis View Post
    Why do people care about this. I'm tired of hearing about it. If I'm a stockholder I want to get the best possible person to run the company. If it cost $100 million a year and a majority of the stockholders agree so be it. If you don't have stock in the company its none of your business. If all taxes are paid then then its not the gov't business either. I can understand trying to limit CEO compensation on gov't bailouts, but you still want to be able to attract the best leadership and not lose important people to competitors. -------End of Rant I feel better now
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

    Several Points

    1) Why do people care- Since 1980, average S&P500 CEO's income has risen 9-10 times faster than average workers. Can you rationally demonstrate to me how CEO has been 10 times better, (or average worker 10 times worse) than 1980 counterpart? EG- Do cars go 10 times faster, or get 10 times better gas mileage? When you consume a certain beverage or food can you bench press 10 times more what you did before? Do hardware, tools, or appliances last 10 times longer than before. Please enlighten us with specific examples.

    2). Attract the best possible...... Some CEO's are worth there weight in gold, but there are others that are grossly overpaid relative to company performance. Oh, how nice to royally screw up, get fired, with 3 or more yrs. of over inflated salary, which could be better used for paying shareholder dividends, and/or R&D for improved products.

    3) Majority of stockholders...... Do you really mean that, or the majority of $$$$?? Can average shareholder really buy preferred stock, or be awarded overly generous stock options by crony boards at discounted prices? A small time investor with 50 shares has far less "vote" than an insider with 100,000 or more shares. Corporations aren't democracies, they've been known to ignore shareholder resolutions passed.

    4) If you don't have stock in company, you shouldn't............../ Yes you should- especially if you have pension, 401k, or otherwise own mutual funds, because those likely hold shares in "concerned companies". Even if not in portfolio, egregious compenstation packages raises the reference bar for other companies CEO pay packages, thus "jacking up the house".

    Still feel better??

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    Veteran Member dishis's Avatar
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    Default Re: CEO compensation rant

    If you don't agree that a company should be able to set its own executive compensation than who should set it ? I know I don't want the gov't involved.
    “If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand”

    Milton Friedman

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    Default Re: CEO compensation rant

    Quote Originally Posted by dishis View Post
    If you don't agree that a company should be able to set its own executive compensation than who should set it ? I know I don't want the gov't involved.
    It's gone beyond what you're suggesting. A Disney President got like 50 million because he butted heads with Eisner. You really think that was for the good of the stock holders?? You really think that's what the majority of the stock holders wanted?

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    Veteran Member dishis's Avatar
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    Default Re: CEO compensation rant

    Quote Originally Posted by jester214 View Post
    It's gone beyond what you're suggesting. A Disney President got like 50 million because he butted heads with Eisner. You really think that was for the good of the stock holders?? You really think that's what the majority of the stock holders wanted?
    I'm not saying its a perfect system. I'm just saying I don't believe the government has any business getting involved, but what can I say I have always been some what of a libertarian.
    “If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand”

    Milton Friedman

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    Default Re: CEO compensation rant

    Quote Originally Posted by dishis View Post
    I'm not saying its a perfect system. I'm just saying I don't believe the government has any business getting involved.
    Sadly there is no one else. I don't like it anymore than you, but I don't see any option. It's ridiculous to allow these guys to do this to each other.

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    Veteran Member dishis's Avatar
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    Default Re: CEO compensation rant

    Quote Originally Posted by jester214 View Post
    Sadly there is no one else. I don't like it anymore than you, but I don't see any option. It's ridiculous to allow these guys to do this to each other.
    We will have to agree to disagree. In my opinion the government should be less intrusive. Government regulations may have good intentions, but more often than not hurt more than they help.

    See the law of unintended consequences


    http://www.econlib.org/library/Enc/U...sequences.html
    Last edited by dishis; 10-29-2008 at 12:11 AM.
    “If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand”

    Milton Friedman

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    Default Re: CEO compensation rant

    the stockholders don't decide. the board of directors (a much smaller group of people) decides.

    in the companies where stockholders actually do decide CEO compensation, THOSE CEOs DO get kicked out for screwing up.

    the reality is that stockholders (and thus the very people you are claiming to speak for) DO NOT determine CEO compensation. get informed before advocating socialism for the rich.

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    Default Re: CEO compensation rant

    I would also add that the passage of Sarbanes-Oxley laws had a major impact on the expected salaries of CEO's and other senior executives. This is because under Sarbanes-Oxley those CEO's can now be held personally and criminally responsible for corporate actions on their 'watch'. In much the same vein that medical malpractice laws have increased the 'gross' earnings of doctors, Sarbanes-Oxley has increased the 'gross' earnings of CEO's. As long as some free market principles still apply, forcing someone to accept higher personal risk will translate into that person expecting a commeasurate higher personal reward.

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    Banned Eric Stoner's Avatar
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    Default Re: CEO compensation rant

    Quote Originally Posted by Melonie View Post
    I would also add that the passage of Sarbanes-Oxley laws had a major impact on the expected salaries of CEO's and other senior executives. This is because under Sarbanes-Oxley those CEO's can now be held personally and criminally responsible for corporate actions on their 'watch'. In much the same vein that medical malpractice laws have increased the 'gross' earnings of doctors, Sarbanes-Oxley has increased the 'gross' earnings of CEO's. As long as some free market principles still apply, forcing someone to accept higher personal risk will translate into that person expecting a commeasurate higher personal reward.
    I don't see where executives need a higher salary to see to it that they and their corporations abide by the law. Additionally, there is Directors and Officers Insurance that covers them for shareholder lawsuits and even some types of criminal proceedings. Franklin Raines did not pay anything out of his own pocket to settle Fannie Mae litigation. His insurer did.

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    Default Re: CEO compensation rant

    Quote Originally Posted by Richard_Head View Post
    Problem being the highest paid CEO's aren't always the best CEO's. How about some pay for performance???
    Alert the media ! Richard and I are in 100% agreement.

    What I'd like to see is elimination of stock options for CEO's and executives. Just use salary and PERFORMANCE bonuses based on profitability on a DEFERRED basis. They would be collectable two or three years after the year in question IF the balance sheet holds up.

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    Featured Member minnow's Avatar
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    Default Re: CEO compensation rant

    Quote Originally Posted by Eric Stoner View Post
    Alert the media ! Richard and I are in 100% agreement.

    What I'd like to see is elimination of stock options for CEO's and executives. Just use salary and PERFORMANCE bonuses based on profitability on a DEFERRED basis. They would be collectable two or three years after the year in question IF the balance sheet holds up.
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

    Splendid idea , ES. How much voting stock do you & like minded individuals hold in all the S&P 500 companies??

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    Banned Eric Stoner's Avatar
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    Default Re: CEO compensation rant

    Quote Originally Posted by minnow View Post
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

    Splendid idea , ES. How much voting stock do you & like minded individuals hold in all the S&P 500 companies??
    That is a problem. Management usually sees to it that their supporters sit on the Bd. of Directors and the Compensation Committee and they vote accordingly.

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    Default Re: CEO compensation rant

    Quote Originally Posted by Eric Stoner View Post
    That is a problem. Management usually sees to it that their supporters sit on the Bd. of Directors and the Compensation Committee and they vote accordingly.
    True dat.

    A lot of stock is held by mutual fund holding companies. Rarely do they go to a stockholder's meeting and stir up shit about CEO pay.

    They do just like I do - sell it when it turns into a turd.

    Well, there comes a point when it is simply out and out robbery of stock holders - aka those pension funds, 401Ks, and private traders using mutual funds having these big salaries, big bonuses, and big parachutes for fuckers who drive my value into the ground.

    Especially these days.

    It is naive to not know they have been stacking the deck for each other for years now.

    There are regulations to protect stock holders and it is time for more regulations to protect stock holders since they are Kevin Bacon six degrees away from the action.

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