Are CEOs 300 times more valuable than their lowest-paid workers?

[RandomGuy]

By David R. Francis / March 15, 2011

Boston
There’s something missing in the Washington political scene – a genuine populist, a prominent politician persistently pointing out a decades-long drift of income and wealth to a tiny fringe at the top.

Maybe this person should be organizing a peaceable march on the Washington Monument to draw attention to today’s extraordinary distortion in the American economy. After all, the concentration of wealth in the United States is more extreme than the much-observed build-up of wealth in Egypt that helped lead to the recent revolution.

Rich are richer, poor are poorer
Here are some facts:

• The richest 1 percent of Americans took 23.5 percent of all the country’s income in 2007. In 1976 they got only 8.9 percent. Gross domestic income was $14 trillion in 2007.

• The lowest fifth on the income ladder saw a decrease in income of 4.1 percent between 1979 and 2008. In the same period, the incomes of the top five percent increased 73 percent.

• The richest 1 percent of US households in 2007 owned 33.8 percent of the nation’s private wealth, more than the combined wealth of the bottom 90 percent.

• The Forbes 400 wealthiest Americans own about as much wealth as the poorest 50 percent of American households.

Many of these facts are from a “Working Group on Extreme Inequality,” formed in 2007, a coalition of groups concerned about poverty and unequal opportunity, and the “dangers” of concentrated wealth and power. It gives extensive resources online, but my impression is that niche websites and blogs are paying more attention to this trend to the top than conventional media, and certainly more than the politicians in Washington who are so dependent on campaign funds from the prosperous. Maybe there’s another economic similarity between the US and Egypt. Certainly the state-controlled media in Egypt paid little attention to the growing wealth of the elite there, though popular social websites did.

Not about envy, but fairness

Now a good populist should not be appealing to a human sense of envy. Rousing envy could be damaging. Even the poorest Americans are generally far better off than the poorest 20 percent of Egyptians with an individual income of less than $2 a day. And Americans are, thankfully, remarkably tolerant of income differences.

But an appeal to an innate sense of fairness might have some political clout, despite inevitable false charges of socialism or even communism. It is the free enterprise system that after all allowed the massive accumulation of riches in recent decades. So the extremely well-to-do should be paying more to assure a worthy capitalist system is maintained in a healthy state, benefiting the bulk of citizens more generously.

The dangers to such income inequality should be obvious, but Washington is a cool climate for populist politicians. We need someone who'll make it tough for Congress to coddle the rich.

Right now the politicians and press in Washington are obsessed with the challenge of the huge budget deficit and accumulating federal debt, so the climate for populism is cool. Vermont Senator Bernie Sanders is probably the only major politician who regularly speaks on issues of economic inequality with a populist flair.

Obama's tax proposal not enough

President Obama in his proposed new budget mildly calls for eventual tax increases for upper-income individuals making more than $200,000 a year and couples who earn more than $250,000, letting expire the Bush tax cuts for the rich. He’s also proposing to raise slightly the tax rates for corporate dividends and capital gains. This change wouldn’t take effect until 2013 and would only affect those above the $200,000/$250,000 threshold. It would not hurt most of the middle class, because the top 10 percent of Americans own 90 percent of all US stocks, bonds, and mutual funds, while the top 1 percent control 51 percent.

Nor does the proposed budget raise estate taxes; it merely “resets” them to 2009 levels. Raising them would be another way to stop or slow the growing concentration of wealth – and to pay for deficit reduction.

The economy thrived decades ago when estate taxes and income taxes on the rich were far higher. Though the rhetoric of conservatives maintains a boost in taxes on the rich now would clobber the economy, it is hard to imagine why it is so different now than in the 1960s or 1970s.

Are CEOs really 300 times more valuable?

When this writer attended annual gatherings of the CEOs of the nation’s biggest corporations in the 1960s, they were paid about 30 times the wages of their lower-paid workers. Today’s corporate chiefs are paid around 300 times the wages of their low-paid workers. Are today’s executives really ten times brighter and more able than their counterparts were 50 years ago? Common sense says no. They have merely managed to persuade members of corporate boards that they deserve fantastic pay. Potential members are unlikely to get invited to join a board by the CEO if they have a reputation for toughness on pay. And CEOs tend to mistakenly measure their own individual worth by their level of pay.

By the way, some hedge-fund managers that received hundreds of millions in compensation for amazing returns on their investments in recent years are being charged now with cheating – receiving insider information.

So an eloquent populist in the nation’s capital, by highlighting the growing concentration of income and wealth, could make it politically embarrassing for conservative members of Congress to continue coddling the rich.

http://www.csmonitor.com/Commentary/Opinion/2011/0315/Are-CEOs-300-times-more-valuable-than-their-lowest-paid-workers

David R. Francis was a longtime Monitor economics reporter and columnist.


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[coyotes_geek]

They can be. Depends on the company.

Is Steve Jobs 300-400 times more valueable to Apple than the guy at the mall who sold me my iPhone? I think so.

[Agloco]

They can be. Depends on the company.

Is Steve Jobs 300-400 times more valueable to Apple than the guy at the mall who sold me my iPhone? I think so.

+1

There are all sorts of angles to approach this from.

One could argue that a CEO doesn't have an upper limit on value (flameproof suit on.......)

[Warlord23]

IMO it's immaterial whether they are 300 times more valuable or not - they might well be (especially since shareholder value is the be-all and end-all of corporate performance, a CEO with creative accounting skills who can show high profits may be 1000 times as valuable as other employees). However, on the flip side, CEOs certainly aren't held 300 times more accountable than employees - and that's the problem with the corporate set-up.

If I'm a CEO, my biggest payoff is in terms of stock options and bonuses. If I boost my firm's performance in the short term I can make a massive amount of dough. The system encourages me to seek short-term upside, even if it means taking greater risk. The downside is negligible - if my risk doesn't pay off, I get a handsome severance package when I'm fired. But I won't need to return the millions of dollars that I made the previous year due to my risky tactics paying off.

That is why many CEOs, especially in the financial sector, take risks. The typical CXO's shelf life is short, so he tries to cash in early. He doesn't need to consider the long-term benefit of all the other stakeholders of the firm (customers, shareholders, employees etc).

What downside do you think Richard Fuld (ex-Lehman CEO) had to bear when Lehman went belly-up? He testified before a few committees and was named worst US CEO of all time by CNBC. Did he lose his shirt for sinking his firm and all its stakeholders? No, he kept his nest egg, transferred his Florida mansion to his wife (to avoid losing the house in legal action), and has now joined a securities brokerage firm to continue the charade and make more money.

[RandomGuy]

LOL at anybody who thinks that the "free-market" has anything to do with CEO pay.

What determines CEO pay is how many cronies they can pack on the Board of Directors.

Sorry, there ain't no "free-market" at work on most BOD's.

(puts his own flameproof suit on)

[Cry Havoc]

IMO it's immaterial whether they are 300 times more valuable or not - they might well be (especially since shareholder value is the be-all and end-all of corporate performance, a CEO with creative accounting skills who can show high profits may be 1000 times as valuable as other employees). However, on the flip side, CEOs certainly aren't held 300 times more accountable than employees - and that's the problem with the corporate set-up.

If I'm a CEO, my biggest payoff is in terms of stock options and bonuses. If I boost my firm's performance in the short term I can make a massive amount of dough. The system encourages me to seek short-term upside, even if it means taking greater risk. The downside is negligible - if my risk doesn't pay off, I get a handsome severance package when I'm fired. But I won't need to return the millions of dollars that I made the previous year due to my risky tactics paying off.

That is why many CEOs, especially in the financial sector, take risks. The typical CXO's shelf life is short, so he tries to cash in early. He doesn't need to consider the long-term benefit of all the other stakeholders of the firm (customers, shareholders, employees etc).

What downside do you think Richard Fuld (ex-Lehman CEO) had to bear when Lehman went belly-up? He testified before a few committees and was named worst US CEO of all time by CNBC. Did he lose his shirt for sinking his firm and all its stakeholders? No, he kept his nest egg, transferred his Florida mansion to his wife (to avoid losing the house in legal action), and has now joined a securities brokerage firm to continue the charade and make more money.

This x1000000000000000000.

[RandomGuy]

They can be. Depends on the company.

Is Steve Jobs 300-400 times more valueable to Apple than the guy at the mall who sold me my iPhone? I think so.

I would fully agree with that statement.

I think he proves to be an exception that proves the rule that they aren't generally worth that much.

I really can't think of many other CEOs that are really worth what they are paid, Buffett notwithstanding.

[Cry Havoc]

I would fully agree with that statement.

I think he proves to be an exception that proves the rule that they aren't generally worth that much.

I really can't think of many other CEOs that are really worth what they are paid, Buffett notwithstanding.

I don't have a problem with Jobs making a ton of money.

I have a problem with a CEO making billions while tanking a company and then getting a golden parachute on the way down.

[Warlord23]

Using Jobs and Buffet as examples to justify CEO pay is like using Tim Duncan and Kobe Bryant as examples to justify handing out max-level contracts in the NBA. The problem is because of the likes of Vince Carter, Eddy Curry, Tracy Mcgrady, Stephon Marbury, Jermaine O'Neal, Gilbert Arenas, Rudy Gay, Antawn Jamison and numerous other bad contracts.

[Oh, Gee!!]

yes, because that money trickles down to us lowly workers

[vy65]

LOL at anybody who thinks that the "free-market" has anything to do with CEO pay.

What determines CEO pay is how many cronies they can pack on the Board of Directors.

Sorry, there ain't no "free-market" at work on most BOD's.

(puts his own flameproof suit on)

CEOs don't pack a corporation's Board of Directors.

Shareholders elect the board.

[LnGrrrR]

Warlord on fire in this thread.

[Agloco]

CEOs don't pack a corporation's Board of Directors.

Shareholders elect the board.

Hmmm.....

[Spurminator]

yes, because that money trickles down to us lowly workers

...the ones of us who remain employed so that the CEO and Board of Directors don't have to take a "pay" cut.

[coyotes_geek]

Using Jobs and Buffet as examples to justify CEO pay is like using Tim Duncan and Kobe Bryant as examples to justify handing out max-level contracts in the NBA. The problem is because of the likes of Vince Carter, Eddy Curry, Tracy Mcgrady, Stephon Marbury, Jermaine O'Neal, Gilbert Arenas, Rudy Gay, Antawn Jamison and numerous other bad contracts.

Are NBA players worth max contracts? They can be. Depends on the player.

[coyotes_geek]

I would fully agree with that statement.

I think he proves to be an exception that proves the rule that they aren't generally worth that much.

I really can't think of many other CEOs that are really worth what they are paid, Buffett notwithstanding.

Rex Tillerson and Ed Whitacre come to mind.

[Drachen]

Rex Tillerson and Ed Whitacre come to mind.

I think Alan Mulally is doing a pretty good job.

[Cry Havoc]

Hmmm.....

:lol :lol :lol

[coyotes_geek]

I think Alan Mulally is doing a pretty good job.

Another good example.

[vy65]

Hmmm.....

Is that a response?

[Warlord23]

Are NBA players worth max contracts? They can be. Depends on the player.

Of course they can be. But you miss the point. If a player like Eddy Curry is signed to a guaranteed max contract, he can half-ass it for the duration of the contract and screw his team - the system does not guard against this eventuality. It is up to the character of the individual to continue to perform at a high level - the system does not require him to do so.

Dick Fuld took the risk of taking highly leveraged positions in housing-related assets. This generated tremendous profits during the boom, and Fuld took home almost $100 million in pay between 2005 to 2007. Even if he knew that the housing boom would not last, he had no incentive to curb Lehman's gambling on the housing market. Once the bottom dropped out, thousands of investors lost money on these assets, and Lehman's shareholders lost almost everything they had invested in the company.

What did Fuld lose? He couldn't be asked to return the obscene amount of pay he had enjoyed in the boom years, neither could he be prosecuted. He just made a bet that went wrong. Would his investors and shareholders have authorized him to make such a risky bet if they knew the downside? No. Did Fuld care? No. He made his fortune in the boom years, and he didn't give a rat's ass who was left holding the bag when the game was up.

You can't blame Fuld too much though, since the system encourages such behavior. Just like you can't blame Eddy Curry for signing a guaranteed contract which requires no commitment from him on performance.

[DarrinS]

In many cases, over 1000x more valuable.

[vy65]

Of course they can be. But you miss the point. If a player like Eddy Curry is signed to a guaranteed max contract, he can half-ass it for the duration of the contract and screw his team - the system does not guard against this eventuality. It is up to the character of the individual to continue to perform at a high level - the system does not require him to do so.

What you're describing is a case of shitty decision-making by the board. Would you criticize the board the same way if it made a poor business decision (i.e., investing in some product that tanks)? And if not, why is there a difference?

Compensation is set by the board based on a recomendation from an independant committee of directors. Most boards take what these committee's say as gospel. If a director doesn't live up to expectations - that might simply be a bad decision by the board.

I don't know how you can make a blanket assertion that all corporate executives are evil and lazy and exist solely to swindle the common man. There are layers of protection to guard against nepotism. Factor in short term and long term incentive pay, along with shareholder activism by larger institutional investors, and you have a system with several checks in place.

Is it perfect? No. But, do you have something better than gross over-generalizations of a broken-down system?

[coyotes_geek]

Of course they can be. But you miss the point. If a player like Eddy Curry is signed to a guaranteed max contract, he can half-ass it for the duration of the contract and screw his team - the system does not guard against this eventuality. It is up to the character of the individual to continue to perform at a high level - the system does not require him to do so.

Dick Fuld took the risk of taking highly leveraged positions in housing-related assets. This generated tremendous profits during the boom, and Fuld took home almost $100 million in pay between 2005 to 2007. Even if he knew that the housing boom would not last, he had no incentive to curb Lehman's gambling on the housing market. Once the bottom dropped out, thousands of investors lost money on these assets, and Lehman's shareholders lost almost everything they had invested in the company.

What did Fuld lose? He couldn't be asked to return the obscene amount of pay he had enjoyed in the boom years, neither could he be prosecuted. He just made a bet that went wrong. Would his investors and shareholders have authorized him to make such a risky bet if they knew the downside? No. Did Fuld care? No. He made his fortune in the boom years, and he didn't give a rat's ass who was left holding the bag when the game was up.

You can't blame Fuld too much though, since the system encourages such behavior. Just like you can't blame Eddy Curry for signing a guaranteed contract which requires no commitment from him on performance.

I get it. Eddy Curry got lazy and Dick Fuld fucked up. Those two specific examples aren't any more relevant to the respective generalized questions than Tim Duncan and Steve Jobs are.

[Warlord23]

What you're describing is a case of shitty decision-making by the board. Would you criticize the board the same way if it made a poor business decision (i.e., investing in some product that tanks)? And if not, why is there a difference?

Compensation is set by the board based on a recomendation from an independant committee of directors. Most boards take what these committee's say as gospel. If a director doesn't live up to expectations - that might simply be a bad decision by the board.


"Shitty decision making by the board" is part of the problem with the system. Board members themselves are people who have lived and breathed this system, and succeeded in it. They are people who have typically benefited from similar compensation schemes, and would have little motivation to do it differently.


I don't know how you can make a blanket assertion that all corporate executives are evil and lazy and exist solely to swindle the common man. There are layers of protection to guard against nepotism. Factor in short term and long term incentive pay, along with shareholder activism by larger institutional investors, and you have a system with several checks in place.

Is it perfect? No. But, do you have something better than gross over-generalizations of a broken-down system?

Where exactly did I assert that all executives are evil and lazy? Stick to the facts. Moreover, I didn't generalize. I pointed out what was possible - how CEOs could maximize short-term gains with impunity. I never claimed that most or all of them actually do it.

With regard to fixing the system: why not make a significant % of CEO bonuses kick in 5 years (or more) after after the CEO takes charge. Pay him a hefty bonus if he delivers in a sustainable manner for 5 years, pay him even more if he can keep it up for 10 years. Why throw money at him for showing results for just 1 year?

[Warlord23]

I get it. Eddy Curry got lazy and Dick Fuld fucked up. Those two specific examples aren't any more relevant to the respective generalized questions than Tim Duncan and Steve Jobs are.

The examples merely showed what is possible within the respective systems. Do you think that there is nothing wrong with a system where 2 individuals could be rewarded in a similar manner, despite performing in drastically different ways?

[vy65]

"Shitty decision making by the board" is part of the problem with the system. Board members themselves are people who have lived and breathed this system, and succeeded in it. They are people who have typically benefited from similar compensation schemes, and would have little motivation to do it differently.

What's your point then? Some business make bad decisions - and they pay the consequences for them. Sometimes those decisions relate to compensation. What's your solution for preventing boards from making bad choices?

There are some career board members. But to think that they're some kind of crony ignores 1) the massive pressure these members face from the (institutional) investors/shareholders who elected them in the first place and 2) the fact that if they develop a reputation as a crony, the less likely future gigs on other companies' boards become.



Where exactly did I assert that all executives are evil and lazy? Stick to the facts. Moreover, I didn't generalize. I pointed out what was possible - how CEOs could maximize short-term gains with impunity. I never claimed that most or all of them actually do it.

When you criticized the "system." Also when you compared them to Eddy Curry. Oh and also when you said this:


Board members themselves are people who have lived and breathed this system, and succeeded in it. They are people who have typically benefited from similar compensation schemes, and would have little motivation to do it differently.



With regard to fixing the system: why not make a significant % of CEO bonuses kick in 5 years (or more) after after the CEO takes charge. Pay him a hefty bonus if he delivers in a sustainable manner for 5 years, pay him even more if he can keep it up for 10 years. Why throw money at him for showing results for just 1 year?

My understanding is that a significant portion of Long Term Incentive pay is already wrapped up with stock performance - so that's already a part of the system that you think is so fucked up already. Of course, this differs from company to company.

Also, its not necessarily a good idea to emphasize long term pay. Sometimes, it might be better to make a corporation more attractive in the short term at the expense of long term growth if the corp. is looking towards being bought or merged.

[Warlord23]

What's your point then? Some business make bad decisions - and they pay the consequences for them. Sometimes those decisions relate to compensation. What's your solution for preventing boards from making bad choices?

As I said, the compensation system is the one that needs to be revamped. Boards themselves operate within a framework that makes these bad decisions possible - I didn't criticize them, nor do I consider them cronies.



When you criticized the "system." Also when you compared them to Eddy Curry. Oh and also when you said this:

Oh, I do criticize the system, but that does not mean I call everybody who plays in the system crooked, or compare everyone to Eddy Curry. Evidently, you're either unable to grasp this point or are doing a poor troll job.



My understanding is that a significant portion of Long Term Incentive pay is already wrapped up with stock performance - so that's already a part of the system that you think is so fucked up already. Of course, this differs from company to company.

Also, its not necessarily a good idea to emphasize long term pay. Sometimes, it might be better to make a corporation more attractive in the short term at the expense of long term growth if the corp. is looking towards being bought or merged.
The ratio of salary + bonus is typically 50% or more of the total pay. I remember reading that the Barclays CEO made more than 60% of his total pay in bonuses. That is way too much IMO.

[Wild Cobra]

I don't have a problem with Jobs making a ton of money.

I have a problem with a CEO making billions while tanking a company and then getting a golden parachute on the way down.
I agree, and perhaps the bulk off their money should be paid after a few years to see the impact of their direction, rather than quarter-to-quarter.

[vy65]

As I said, the compensation system is the one that needs to be revamped. Boards themselves operate within a framework that makes these bad decisions possible - I didn't criticize them, nor do I consider them cronies.

That "system" is indistinct from how any other corporate decision is made. If you think it needs revamping, then you think that the entire structure of how corporate decisions are made needs to be revamped.

The fact is that several independant bodies influence compensation decisions. Consulting firms work closely with compensation committees, which are comprised of independant directors, who set executive salary + bonus. What's wrong with this framework?



Oh, I do criticize the system, but that does not mean I call everybody who plays in the system crooked, or compare everyone to Eddy Curry. Evidently, you're either unable to grasp this point or are doing a poor troll job..

I don't get it. If the majority of people who work in the system aren't crooked or lazy or rewarded for being lazy, then why does the system need to be changed? Does some amorphous "framework" hover over these people, influencing them to do evil or be lazy?

There is no system outside of the people who comprise a companies governance structure. Sure, certain bylaws might tempt them to do something, but you can't just say the system is broke but people are good.



The ratio of salary + bonus is typically 50% or more of the total pay. I remember reading that the Barclays CEO made more than 60% of his total pay in bonuses. That is way too much IMO.

Do you have statistics showing that this is true for most large companies?

What's wrong with an executive making most of his money from a bonus - which is usually tied with corporate performance and not guaranteed $ like a salary? Isn't that what you're pining for?

[coyotes_geek]

The examples merely showed what is possible within the respective systems. Do you think that there is nothing wrong with a system where 2 individuals could be rewarded in a similar manner, despite performing in drastically different ways?

Correct. I don't think there is anything wrong with a system that allows CEO's to make a shitload of money or NBA players to get max contracts.

[LnGrrrR]

Correct. I don't think there is anything wrong with a system that allows CEO's to make a shitload of money or NBA players to get max contracts.

I think the question would be whether or not the "max contract" system is the most effective way to run things.

[Warlord23]

That "system" is indistinct from how any other corporate decision is made. If you think it needs revamping, then you think that the entire structure of how corporate decisions are made needs to be revamped.

The fact is that several independant bodies influence compensation decisions. Consulting firms work closely with compensation committees, which are comprised of independant directors, who set executive salary + bonus. What's wrong with this framework?


Your conclusion that everything needs to be revamped is incorrect. I am not advocating doing away with the concept of an independent board, audit/consulting firms et al, because my analysis itself did not cover all aspects of corporate decision making. Restricting this discussion to executive compensation, why not finalize a maximum bonus % based on shareholder voting, which will cap the bonus that directors can award on a yearly basis?



I don't get it. If the majority of people who work in the system aren't crooked or lazy or rewarded for being lazy, then why does the system need to be changed? Does some amorphous "framework" hover over these people, influencing them to do evil or be lazy?

There is no system outside of the people who comprise a companies governance structure. Sure, certain bylaws might tempt them to do something, but you can't just say the system is broke but people are good.


The % of people who are actually crooked or lazy is irrelevant. The fact that such behavior can be allowed, and indeed rewarded, is the problem. The destructive effect of a small minority being able to take disproportionate risk has been demonstrated by Lehman et al. I have no opinion on whether "people are good or not".



Do you have statistics showing that this is true for most large companies?

What's wrong with an executive making most of his money from a bonus - which is usually tied with corporate performance and not guaranteed $ like a salary? Isn't that what you're pining for?

I don't have comprehensive statistics. This is a book by Prof Rakesh Khurana of Harvard (link (http://www.amazon.com/Searching-Corporate-Savior-Irrational-Charismatic/dp/0691074372)) that basically shows that the ROI of CEO compensation is much lower than other forms of outlay. Also, here (http://www.businessweek.com/news/2011-03-07/barclays-ceo-s-pay-rises-to-as-much-as-10-1-million-pounds.html) is the article which I referred to earlier regarding the Barclays CEO. His salary (1.5M pounds) + bonus (6.5M pounds) = 8M pounds makes up 80% of his 10.1 M pound compensation package.

My objection to the bonus is the fact that it is linked to short-term performance, as opposed to restricted stock that is linked to long-term performance

[Warlord23]

Correct. I don't think there is anything wrong with a system that allows CEO's to make a shitload of money or NBA players to get max contracts.

You didn't answer my question. Are you in favor of a system that allows bad risk-taking CEOs that damage their firm in the long run to earn the same as (and maybe even more than) CEOs who manage/grow their firm in a sustainable manner?

[coyotes_geek]

I think the question would be whether or not the "max contract" system is the most effective way to run things.

Depends on who we're letting define "most effective".


You didn't answer my question. Are you in favor of a system that allows bad risk-taking CEOs that damage their firm in the long run to earn the same as (and maybe even more than) CEOs who manage/grow their firm in a sustainable manner?

Yes. I'm in favor of a system that allows bad CEO's to make as much as good CEO's. I'm in favor of it because there's a difference between "the system" and whether or not specific decisions made by individuals operating within that system are good ones or bad ones. I may not like every outcome that results from that system, but that shouldn't be an indictment of the system as a whole.

I'm also in favor of the system that allows average individuals to drive cars, even though some of us are going to kill ourselves and/or others.

[boutons_deux]

Salary Ceiling, a Lever for Change

http://www.truth-out.org/files/images/031511kempf.jpg

http://www.truth-out.org/print/68472

[Agloco]

You didn't answer my question. Are you in favor of a system that allows bad risk-taking CEOs that damage their firm in the long run to earn the same as (and maybe even more than) CEOs who manage/grow their firm in a sustainable manner?

Good argument. I'm interested in your thoughts on how to correct this though. Preferably without salary caps.

[coyotes_geek]

Salary Ceiling, a Lever for Change

http://www.truth-out.org/files/images/031511kempf.jpg

http://www.truth-out.org/print/68472

Everyone in favor of having the government determine what your "maximum acceptable income" is, please raise your hands.

[LnGrrrR]

Everyone in favor of having the government determine what your "maximum acceptable income" is, please raise your hands.

If banks are going to rely on taxpayer assistance, I don't think it's unfair. If banks can make it on their own, then they can determine whatever salary is fair.

[ManuBalboa]

Is there a point to answering this poll. Is the Government going to start regulating this pay ratio?

Is life fair?
a) yes
b) no

[ManuBalboa]

If banks are going to rely on taxpayer assistance, I don't think it's unfair. If banks can make it on their own, then they can determine whatever salary is fair.

We pay taxes, yet our government CEO's continue to run the country into trillions dollars of debt. Obama should give the country every cent from his future post-presidential book deals and University speeches tbh.

[Sec24Row7]

Honestly... it is for the shareholders of the company to decide... all the workers work for the owners...

[v2freak]

The issue of aligning shareholder and top management's interests has always been a question of: what system works better than giving the C-Suite stock options? Somebody pointed out that often CEOs may try to work towards the short term instead of using Alfred Rappaport's long term shareholder value model. As I understand it, more companies are implementing options that cannot be cashed in until years after an executive has worked for a company. I do agree golden parachutes are pretty terrible. The only worth I find in them is they discourage takeovers, but that's why you have staggered boards and poison pills.

Also, more taxes on dividends and capital gains? Does President Obama want big business out of the US?

[boutons_deux]

Immune to Cuts: Lofty Salaries at Hospitals

In an urgent search to cut the state’s health care costs and lift revenue, a task force came up with a plan to increase the cost of a hospital stay by $5 and to limit housekeeping services for the disabled in their homes.

One area of plump costs, however, remained undisturbed: executive suites where salaries and compensation run into the millions of dollars, even at the most financially struggling hospitals.

A proposal to allow public financing for only the first $1 million in wages for an executive died before it even reached the task force. “It was classic how it was killed,” said Judy Wessler, director of the Commission on the Public’s Health System, an advocacy group that had suggested the limits.

“We submitted the proposal in writing, met with the state staff members about it, then testified for our two minutes at a hearing,” Ms. Wessler said. “Then in the written summary of all the 4,000 proposals, they twisted the wording of ours so that it would be impossible to implement. Then they said it was not viable, so it wasn’t even put up for a vote.”

http://www.nytimes.com/2011/03/16/nyregion/16about.html?pagewanted=print

===========

Executive salaries at taxpayer-funded (medical) facilities is high on the list of Repug/tea bagger deficit reduction targets, right? :lol

[TeyshaBlue]

Executive salaries at taxpayer-funded (medical) facilities is high on the list of Repug/tea bagger deficit reduction targets, right? :lol

It ranks about where it does for the rest of congress.

[boutons_deux]

Repugs/teabaggers are deficit hawks above all, even above "where are the jobs?".

For some reason, executive compensation and corporations in general are NEVER the target of these two groups (if they really are two distinct groups).

[Wild Cobra]

If banks are going to rely on taxpayer assistance, I don't think it's unfair. If banks can make it on their own, then they can determine whatever salary is fair.
What we have to do is either make all CEO's to sign new contracts for a bailout to take effect, or let then go bankrupt. Thing is, for the way accounting takes place, the bailout money became positive cash influx for bonus calculations.

[johnsmith]

LOL, RG's jealousy of the wealthy cracks me up.

[RandomGuy]

LOL, RG's jealousy of the wealthy cracks me up.

Not really all that jealous, but I do wonder just how much wealth any one human being should have.

I also know that extreme wealth is much more accidental than many would admit.

[RandomGuy]

Seems like when you actually inform the shareholders of a company how much their executives are actually making, they tend to take a dim view of the packages.

This suggests to me that your average CEO profits immensely from shareholder ignorance, and that the "free-market" has jack shit to do with CEO pay.


HP's board purge cleared but pay packages scolded
http://www.heraldnet.com/article/20110324/BIZ/703249901/1011/BIZ02


In January, HP said it was replacing a third of its board as the company tried to shake off the scandal. Four directors who had been particularly vocal in the debate over Hurd's ouster were leaving the board, and five new directors were coming in. Some corporate governance experts expressed fears that Hurd's replacement, new HP CEO Leo Apotheker, played too big of a role in picking the new directors, and called for investors to punish some sitting board members by withholding their votes for allowing it to happen. HP has said that its board acted properly.


For instance, as HP's top manager, Apotheker has received a compensation package that could be worth tens of millions of dollars, including a $1.2 million salary and $4 million cash signing bonus. In addition, HP was heavily criticized for approving a severance package for Hurd that was in the tens of millions of dollars, some of which he had to give back as part of a settlement.

[boutons_deux]

"extreme wealth is much more accidental than many would admit."

Accidentally born wealthy, or poor, is the best way to die wealthy, or poor. Social/economic mobility in UCA has been declining for 30+ years, and continues.

But there's absolutely nothing accidental about how the predatory, avaricious VRWC has manipulated, and evaded, tax and other govt policies to enrich and protect themselves.

[Winehole23]

Seems like when you actually inform the shareholders of a company how much their executives are actually making, they tend to take a dim view of the packages.

This suggests to me that your average CEO profits immensely from shareholder ignorance, and that the "free-market" has jack shit to do with CEO pay.


HP's board purge cleared but pay packages scolded
http://www.heraldnet.com/article/20110324/BIZ/703249901/1011/BIZ02https://www.msci.com/documents/10199/91a7f92b-d4ba-4d29-ae5f-8022f9bb944d

[boutons_deux]

https://www.msci.com/documents/10199/91a7f92b-d4ba-4d29-ae5f-8022f9bb944d

nothing but the looting of corporations, of America by the oligarchy.

Fact Sheet: Tax Subsidies for CEO Pay

http://www.americansfortaxfairness.org/tax-fairness-briefing-booklet/fact-sheet-tax-subsidies-for-ceo-pay/


Why corporate CEO pay is so high, and going higher

http://www.cnbc.com/2015/05/18/why-corporate-ceo-pay-is-so-high-and-going-higher.html


How New Accounting Rules Are Changing the Way CEOs Get Paid

http://knowledge.wharton.upenn.edu/article/how-new-accounting-rules-are-changing-the-way-ceos-get-paid/

and there's nothing anybody can to do reverse or even stop it. The oligarchy makes the govt rules to enrich themselves.

[Clipper Nation]

The average CEO makes less annually than the average anesthesiologist, surgeon, oral surgeon, obstetrician, orthodontist, internist, family practitioner or psychiatrist, and not much more than the average dentist:

https://www.aei.org/publication/the-average-us-ceo-last-year-made-only-178400-about-the-same-as-a-dentist-and-got-a-raise-of-less-than-1/

[boutons_deux]

The average CEO makes less annually than the average anesthesiologist, surgeon, oral surgeon, obstetrician, orthodontist, internist, family practitioner or psychiatrist, and not much more than the average dentist:

https://www.aei.org/publication/the-average-us-ceo-last-year-made-only-178400-about-the-same-as-a-dentist-and-got-a-raise-of-less-than-1/

AEI? VRWC stink tank! :lol

AIE hilariously pointing out that BigHealthCare is looting America.