Posted on 09/06/2010 6:10:06 AM PDT by SeekAndFind
One of the most startling things about the post-crisis landscape is how tone-deaf the wealthiest Americans remain to outrage over their Croesus-like pay packages. The award for complete obliviousness would have to go to Blackstone cofounder Stephen Schwarzman, who earlier this summer compared government attempts to raise taxes on financiers such as himself to Hitler’s invasion of Poland. Silver medals should certainly be handed out to the many executives and corporate lawyers who were grousing last week about the new Dodd-Frank bill, which includes a rule requiring companies to disclose the difference in pay between their chief executive and their lowest-level workers. It would be a “logistical nightmare,” these titans of industry wailed, for firms to compile this information.
Well, maybe, but if you issue pay stubs, surely you can tally them up (and perhaps keep a few more workers on board to do just that). The real nightmare will be when the public sees the numbers, which will illuminate just how egregious the U.S. pay gap has become. According to the Institute for Policy Studies, a liberal think tank based in Washington, the average S&P 500 CEO takes home 263 times what his cheapest laborer does. While CEO pay is indeed down from its pre-crisis highs in 2007, it’s still double what it was in the 1990s, and eight times the level in the 1950s.
(Excerpt) Read more at newsweek.com ...
RE: it’s none of your (or anyone else’s) business if you’re not a shareholder of one of those companies.
It is my business as my 401(K) is tied to many index funds that track these company’s performance.
AGREED! We may not like it, but it sure is not the government’s business to tell anyone what to do. We need to knock this out now!
A lot of the CEOs are probably stockholders, and if they collude with the board of directors, they loot the company, sell the assets, and walk away with a big fat lump of money. Simple enough.
RE: Demanding that the government “do” something for you is not a viable alternative, in no small part because, once the government does something for you, it is only a matter of time before the government does something to you, as the disaster known as Obamacare should have made abundantly clear.
Read my posts and you might even read this Newsweek article, there is NO HINT of any demand for government action.
There are lots of QUESTIONS, which is a natural reaction in the scheme of things given how the performance of companies are so out of whack with CEO compensation.
RE: if they collude with the board of directors, they loot the company, sell the assets, and walk away with a big fat lump of money. Simple enough.
It’s not going to be worth it. The long arm of the law will get them in the end. SEE: Madoff, Bernard
With Regulator approvals, financial corporations are dramatically overstating the value of assets (loans, debt instruments) on their balance sheets and are still not disclosing massive off-balance sheet liabilities.
As a result, they are way over reporting net income and are fraudently taking bonuses on those false earnings.
This will continue until an end comes to “extend and pretend” accounting. It is a mega scam that people deliberately ignore.
“the Institute for Policy Studies, a liberal think tank “
I think we’ve had enough stories about their ‘report’.
Crime doesn’t pay....although in this case I remain skeptical :)
RE: Then ask yourself this - why haven’t you taken your money out of those corporations (since you’re obviously dissatisfied with the pay their CEOs receive)?
I can’t because most of my investments are in 401(K). Most of these are tied to index funds that INVEST in these companies. My company only has a limited number of choices.
For the past 10 years the S&P 500 and the NASDAQ Index have put on very poor returns.
QUESTIONING the performance of a company’s CEO is not (repeat NOT ) an attempt at demanding government action.
(a) I’m perfectly happy to concede the government interference issue (for the time being);
(b) If you don’t like the options available to you in your 401(k), (i) lobby your employer’s HR deparment to add other options, (ii) stop contributing and put your money elsewhere (and make contributions to an IRA instead), or (iii) find a new employer.
Again, with all due respect, the answer is still self-evident.
ONE OTHER OPTION:
I can also, like thousands of others — QUESTION the compensation in the public square.
There is such thing as PUBLIC OUTCRY to a point where some companies are SHAMED into taking action.
An analogy -— can we LEGALLY do anything about the ground zero mosque ? NOPE. The constitution allows people the freedom to practice one’s religion.
Can we PUBLICLY QUESTION the motives and sources of funding of the mosque? We sure as hell can.
Same principle applies.
Stockholders don't have a say because the rules make it almost impossible to have competitive elections to corporate boards. CEOs get their hand picked cronies as directors, the cronies set CEO compensation and the shareholders get fleeced.
There’s one vote that they can’t dodge, and that’s the ‘sell’ button. If investors used it more often, you might be surprised at how quickly they respond.
That doesn't mean they're getting the most bang for their buck. A company may be profitable AND waste hundreds of millions on excessive executive compensation.
If people don’t like where they work, leave. To paraphrase Reagan, the only thing worse than not making enough money is the government stepping in to “help” you make more money. Think of the past and present economic crises...caused by gov. meddling.
This entire article is a class warfare screed disguised as statement of concern. I disagree with the entire premise.
This is part of a “death by a thousand cuts” of American industry, ONE more regulation in a bundle of regulations that must be thousands and thousands of pages long.
If I start my own company, and I pay myself 1000 times as much as someone I hire at minimum wage, whose business is that, and why should I submit (via a legal requirement) that ratio?
What career government/party bureaucrat or union organizer put the bug in someone’s ear that the metric of the ratio of highest-to-lowest pay is something that will determine...what? The “fairness” of a CEO’s salary? What does THAT have to do with anything?
You may like or dislike Steve Jobs of Apple, but doing a calculation of his compensation package relative to that of a minimum wage person whose job may involve emptying the trash says nothing, absolutely nothing about the performance of that company, which is stellar.
If a person owns a company and is the CEO, THAT person should be able to decide compensation. If compensation is determined by a board of trustees, board of governors, board of managers, or executive board, then they should do what they are tasked with doing. I don’t agree with putting this in the hands of every single shareholder in a publicly traded company. That isn’t going to “fix” it if it isn’t working, all it is going to do is make the process so unwieldy as to be unworkable.
This ratio concept is a LIBERAL creation, this metric of pay ratios. Liberals always like to be the smartest ones in the room, and they expect everyone to accept their logic on these matters. However, as Thomas Sowell so accurately points out, they are a party of “one-stage-thinking”. If they come across something like the ratio of pay between highest and lowest paid employees, and it fits their template, then it becomes law.
LIBERALS SHOULD HAVE THIS TATTOOED ON THEIR FOREHEADS AND INSIDE OF THEIR EYELIDS: CORRELATION DOES NOT EQUAL CAUSATION!
Letting liberal premises go unchallenged (such as the ‘fact’ that abortion is allowed due to a penumbra in the Constitution) then they build a huge and horrible edifice on the foundation of that one concession. In this case, agreeing that this bogus ratio should be something that law should be based on is another piece of liberal tripe that should automatically disqualify anyone from serious consideration as a conservative thinker.
Marx would be just fine with this concept, as are nearly all leftists, but that does not make it right.
"the new Dodd-Frank bill, which includes a rule requiring companies to disclose the difference in pay between their chief executive and their lowest-level workers"
What are you talking about?
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