Posted on 08/11/2006 3:27:09 PM PDT by Clintonfatigued
the only way you can keep corporate America purring is to give CEOs compensation packages that are 187 times higher than what's earned by the average worker in their companies, then go ahead. Do it. Let market forces reign.
But if the ever-increasing levels of extremely high executive pay are largely a case of the CEOs having their way with timid boards of directors paying little or no attention to performance criteria, stop it immediately.
Few things could be more damaging to the free-market system. There are three reasons:
One is that dishing out millions upon millions of dollars to executives who have been mediocre on the job is a way of cheating shareholders of what is rightfully theirs.
A second is that giving this pay when you can achieve better bottom-line results with talented executives who would take less is a contradiction of market principles.
The third is that the practice erodes the credibility of the corporations. It makes ordinary people believe the worst of big business.
(Excerpt) Read more at courierpress.com ...
Overpaid plutocrats who cut and outsource jobs while feathering their own nests with shareholders' money do more to advance the cause of socialism than do socialist politicians.
You ever own a business?
The only way to get a hold on excessive executive compensations is to increase the interest of the shareholders in how the companies in which they hold shares are run.
Under the current and previous tax rules, the value of the stock on the stock exchange is of more interest to the shareholders than the actual value of the company and the dividends issued by those companies. This lack of interest in dividends and management leads to company boards acting irresponsibly because they aren't held accountable.
Kind of like politicians, or rather - exactly like politicians.
These kinds of articles are so dumb. There is a reason that CEO compensation is quite often negatively correlated to performance.
The type of management talent that is in the Fortune 500 category has many options available to them. Starting their own companies, taking cush director/VP positions at other companies, becoming consultants, etc Without the major headaches and chances of failure of a CEO.
They have to pay them a lot to get them to take the chance. It's that simple. It's not some grand conspiracy theory. Anyone that has known someone that has climbed the corporate ladder to the VP level should know this.
I don't understand why people worry about how much CEOs make.
Like if Fortune 500 companies paid their CEOs less, the average working stiff would end up with more money in the weekly paycheck.
Nobody complains about the difference between what Steven Spielberg makes relative to his chauffeur or his housemaid.
Barbara Streisand was paid $80 million upfront for her coming "I'm outa here forever and this time I mean it" concert tour. Wonder how that compares to what the guy earns who cleans her bathroom.
Nothing but misplaced envy, pure and simple. Disgusting.
The wage slaves among us are constantly hit up side the head with the "free market" bat. We are told that if we lose our jobs we must work hard to find a new one. If our line of work has vanished, then we must retrain for a new career. If we must pick lettuce, then we must pick lettuce.
What kind of a system is it where this isn't also true (and even moreso) of the most important cogs in the wheels of industry? If CEO's aren't required by the system to be constantly on their toes and constantly relevant with up-to-the-minute skill sets, then we must not really be talking about a "free market" after all.
What we seem to be talking about is a more sophisticated version of multi-level marketing where a few charming hacks haggle, con, and cheat their way to the top of the heap so they can finally relax and be horrible employees at the expense of all the rest of us.
"If CEO's aren't required by the system to be constantly on their toes and constantly relevant with up-to-the-minute skill sets, then we must not really be talking about a 'free market' after all."
What makes you think they aren't? You probably watch too many Hollywood movies if you think that the CEO can just sit it a big chair a smoke a cigar all day if he wants.
More importantly, if you don't own stock in the company, then why do you care? No one asks the MLB to justify paying players millions more than stadium employees, but no one takes issue with them.
Don't bother. Hollywood created the stereotype of the fat cat CEO, and some people just ate it up.
You forgot those pesky stockholders.
..oh yeah..those ERONians
Doogle
Actually, I know a number of people who have claimed to have stopped going to MLB games because they were "tired of subsidizing the players' salaries". I'm not taking a side here, just saying a lot of people don't like it.
I would think that they'd like watching as a millionaire stands in the hot sun holding a stick while a guy throws a hard object at him at 90 mph.
I agree. Even though I live in a major league city, I'll drive 90 miles to see a Single A or Triple A game because IMHO it's much more enjoyable.
Don't bother. Hollywood created the stereotype of the fat cat CEO, and some people just ate it up.
That would have been Thomas Nast et al and portrayals of robber barons that pre-dated Hollywood by decades.
Overpaid plutocrats who cut and outsource jobs while feathering their own nests....
-----
Unfortunately it is a world market now, no longer just domestic. If you don't compete, you lose. Thank the unions in this country too, and those plutocrats that have pandered to them.
Yeah, I shouldn't have used that term.
Try running a small business for a couple months, and you'll never again begrudge high salaries to those who run businesses with tens of thousands of employees and millions of customers (or just a few very large ones).
Also, like so many things in our "free market", it was government regulation that started the climb in top executive compensation. Generally, employee salaries are considered business expenses and so are deducted from taxable corporate income. But back in the 80's, Congress wanted to limit executive compensation and tried to do so by instituting a $1 million cap on that deduction for any one person. So companies paying executives more than $1,000,000 had to pay corporate taxes on the excess, making it very expensive to pay seven figure salaries.
But the market, being smarter than government, just started paying all its top people under $1 million and making up the difference in other ways, most significantly stock options. But stock options were seen by executives and boards as kind of "free money", since they cost nothing at the time of issuance and until recently weren't even required to be listed as a liability. It was easy to keep cranking salaries higher on demand because it didn't "cost" anything at the time from an accounting perspective; it was "cheaper" to pay an executive $999,999.99 plus $10 million worth of stock options than to pay him $2 million cash. Of course, this made the executives receiving those options focus like lasers on nothing but increased stock prices, since the stock price now made up such a large percentage of their earnings. This focus in some cases ended up being to the detriment of employees, customers, and long-term corporate health.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.