Posted on 02/04/2009 10:17:39 AM PST by jveritas
Obama announced an executive order to limit the salary for CEO of bailout companies to $ 500,000 a year. Besides that this is the scary socialism on the march the question from business perspective is what type of CEO would a company get for $ 500,000 a year? The answer to that is very simple. They will get very incompetent CEO’s who are even much more worse than the current CEO’s who are running these bailout companies.
lol.. it is funny, people gripe when these companies move operations overseas in one breath, then, in another breath, gripe about all the regulations and taxes on businesses here. Can we really blame them?
This is less than 5x what my husband makes as a network (computer) administrator.
Somehow I don’t think a man who only makes maybe 4.5x my husband’s salary is going to be a great administrator of an entire business.
By that logic, we should have had the most competent people running Wall Street - like, you know, the CEOs of AIGs, Citis, Morgan Stanleys, Lehman Brothers.
Look at what we got for $70-100 million for each of these Wallt St. CEOs!
Yep - the answer is to pay them more and subsidize their failures with tax payer money. /sarc
1. CEO’s are quite often over compensated. This is a problem arising from the incestuous method in which a company's board of directors (those deciding the CEO’s compensation) is usually filled. I firmly believe it is often a case of the well connected taking care of each other while robbing the shareholders blind.
It could be argued that the government should have a role in regulating the openness of boards as a matter of shareholder rights, but that is a long shot from mandating compensation limits upon the shareholders.
2. When the shareholders go to the government with their hand out, they best understand that the government will want something in return, and that something is always power. Don't want public control? Don't ask for public money.
I bet there are many CEOs that have ordered cost/benefit projections for move-to (insert country) scenarios.....
No one should be surprised that this money should come with strings attached.
Yes, and this will have two powerful incentive effects:
First off, as has already been mentioned, the government has no business whatsoever making that decision for you.
Second, do you still think you'll feel that way as top shelf talent heads overseas where they can get higher wages?
Third, can you see where this sets a precedent for limiting wages and other things as a political expedient (which is EXACTLY what this stunt is!). What happens if Obama decides to limit wages for medical professionals because health care is too expensive and the doctors go away?
This is pure socialism and a really frightening glimpse at what the next few years will bring.
I'll say it.....as an investor, I have a few rules.
1) Never lose money
2) See rule number 1
3) I demand stable or increasing dividends
Otherwize, I simply don't care what the CEO makes....and I certainly don't want Obama or Barney Frank making decisions regarding my investments.
I (or most anyone) could have run AIG better, just by living by the axiom “if it sounds too good to be true, it probably is.” WHAT WERE THEY THINKING?
Most of these firms could get someone from the accounting department to run things, tell them to obey the law and not do any thing stupid, and they would likely run things better then they have been, and be happy for the raise.
Barack Obama???
The Declaration and Constitution already did...
If that were the most offered by ALL companies there would be plenty of CEO’S working or else they would be on the bread line.
So simple!
Tell obama that. He’s got his own definition.
So you don't care if the CEO packs the board with cronies and cuts the corporations profits from 20% to 10% by skimming money into his own pockets?
Are you an employer? Do you have the same three rules for your employees, namely that they can name their own compensation and skim off as much as they like, just as long as they don't overdue it and create a loss?
Frankly, I expect more.
Jamie Gorelick made TWENTY FIVE MILLION DOLLARS off of bonuses from the cooked books at Fannie Mae, and she ALSO sits on the boards at Schlumberger and United Technologies.
It’s an awfully LARGE back door!!
The higher paid execs will leave. We want the best execs working at these corporations, so that they can pay back the money they were lent.
How much do ballplayers make a year?
OK, so the Ze-ro is going to limit salaries to CEO’s. What little tricks of accounting are these CEO’s going to use to retain their exhorbitant income levels?
The only problem with that is that they cook the books and use creative accounting, which in turn withholds the facts from investors.
The guy who runs Costco makes less than $500,000 per year, and everyone can see how poorly that company is run.
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