Posted on 10/27/2009 6:07:56 AM PDT by James H. Shott
Corporate CEO salaries have been a target of criticism for a long time, and that criticism increased during the mortgage banking collapse, when bank CEOs also became targeted for doing a lousy job.
The heads of large companies do make huge salaries, as shown by this sample from the 2008 AFL-CIO CEO Pay Database: Robert A. Iger, The Walt Disney Company, $51 million; Lloyd C. Blankfein, The Goldman Sachs Group, Inc., $42.9 million; Mark V. Hurd, Hewlett-Packard Company, $34 million; and Rex W. Tillerson, Exxon-Mobil Corporation, $32 million.
There are a few reasons for this criticism, including envy and not understanding how businesses work. However, some people who understand perfectly well how businesses work also think CEOs are overpaid. People wonder how CEOs can be worth multi-million dollar salaries.
There’s nothing wrong with anyone making infinity dollars an hour... as long as you’re not on welfare.
go away
I’m a lot less concerned about how much somebody else makes in their job (even civil servants as long as they work hard and earn it) than I am about ever-expanding government and out of control spending.
Terrific insight.
I don’t CARE how much a CEO makes if his company makes my life better in some way at a convenient affordable price.
I’d sooner spend a day at Disney World than in the offices of any govermment agency.
I’d sooner walk into or drive up to any branch of Bank of America for service than have to visit the Social Security Adminstration, the VA, or the DMV....or the US Congress.
They can make as much as the company will give them as long as the company is not majority owned by the government. Otherwise it truly is fascism .
You’re seem very selective about who gets to make lots of money:
http://www.forbes.com/2006/06/13/06celebrities_all_slide.html?partner=aol
They should be paid more if their Board wants and should be running our Country.
Pray for America’s Freedom
> However, some people who understand perfectly well how businesses work also think CEOs are overpaid.
I am one such person. Many corporate CEOs, particularly in the banking sector, are obscenely and grossly overpaid.
> People wonder how CEOs can be worth multi-million dollar salaries.
They aren’t. And yes, it is all of our business what these buffoons get paid, because their scandalous salary cost is reflected in what we buy, as it gets passed on to the Ultimate Consumer in one form or another. And because they are all doing it, there is no check-and-balance provided by the marketplace. If it isn’t collusion it is the next best thing.
Should their salaries be regulated? No. They should be investigated under RICO / Combines Investigation Act and other relevant pieces of legislation.
Can a CEO be worth millions? I'd say: "Yes". I've worked for IBM for 31 years. When Lou Gerstner came on board we were losing over a billion dollars a year. There was talk of breaking the company up and selling off the pieces. Gerstner made lots of changes, including cultural ones, and the company was soon making billions in profits. To the 100,000 people who got laid off, he wasn't worth anything. To the shareholders and the 200,000 who remained, he was certainly worth millions of dollars.
Note that Congress tried to crack down on CEO pay in the past. They mandated that the bulk of an executive's compensation had to be performance-based (bonuses, stocks, & options). Anything over $1M was not deductible as an expense. So now CEOs were incented to do anything for short-term profits, even at the expense of long-term viability, jobs, ethics, etc. Once again Congress, full self-righteousness, screws up the economy.
Not selective, at all. I simply picked a few representative ones, as I did with the CEOs.
No question that many may make more than the ones I cited.
RICO? Interesting take.
How is it that a salary set by a Board of Directors elected by the shareholders would qualify under the RICO statute?
> How is it that a salary set by a Board of Directors elected by the shareholders would qualify under the RICO statute?
If racketeering and crime are involved you could use RICO.
An interesting place to begin looking might be to see if collusion and price-fixing has taken place.
Do you have any substantive reason to believe racketeering and crime, or price-fixing have occurred, or just suspicion, or you just don’t like the circumstances and want to investigate and hope to find something?
> Do you have any substantive reason to believe racketeering and crime, or price-fixing have occurred, or just suspicion, or you just don’t like the circumstances and want to investigate and hope to find something?
I’d call it a strong suspicion, rather than a substantive reason. As such it’s a viewpoint or an educated guess.
And it is borne out by (unrelated) history:
Michael Milken didn’t happen in a vacuum, and neither did Bernie Madoff. Neither did Nick Leeson (tho’ that be a UK example) neither did the Lloyds of London spiral (another UK example) and neither did the BCCI and neither did the Banco Ambrosiano (an Italian example).
Those off the top of my head: if I went thru my files I could probably find a few other examples of similar things.
Whenever you have massive sums of money with few (no) controls or checks-and-balances you have a situation ripe for abuse. And whenever you have a massive meltdown of something, chances are excellent that evildoing is the root cause. And if not evildoing then rank incompetence — which is also evildoing but of an ignorant sort (see Leeson).
Can such evildoing be industry-wide? Sure it can. That is why there are laws against price-fixing, for example.
I see no reason to offer the benefit of the doubt to these particular new cases as a result. Something caused a massive erosion of Value, and that “something” did not warrant the payment of massive bonuses. Not the first time, and certainly not now.
Therefore, IMO it would be most interesting to find out what that is, because it certainly wasn’t a Natural Disaster. It’s not good enough to say “oops, a bad mistake, out of the blue...” It fails the sniff test and requires investigation.
Just my opinion.
The argument ‘shareholders should vote’ went out when mutual funds took over and ‘investors’ didn’t want to be bothered with participating. If Barney wants to fix something, he should look into the groups of fund managers at the local bar making a little extra by getting the ‘right’ board elected.
None of these ‘regulators’ have ever run a business, let alone a huge corporation. They think the entire world operates like unionized workers where they show up for a specified number of hours, get a vacation whenever they choose and sick leave and coffee breaks, lunch, etc - no matter what. Even small execs work long hours, take vacations if and when it’s convenient for the company and maybe no sick leave at all and when they began the business or in bad times, they even went without pay so they could make the payroll - even at home they are checking the business via computer or blackberry.
Granted some CEO’s make more than I could imagine, but I also can’t see myself having their responsibilities or doing anything other than sinking the company. Private companies are just that and should remain so. Barney and other progressives: Stay out of our free market.
Well, I’d certainly want to use the afl-cio as an authority for every thought I have.....NOT!
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