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Are CEOs overpaid?
WorldNetDaily.com ^ | Wednesday, March 2, 2005 | Walter E. Williams

Posted on 03/02/2005 3:13:38 AM PST by JohnHuang2

Are CEOs overpaid? Posted: March 2, 2005 1:00 a.m. Eastern

© 2005 Creators Syndicate, Inc.

In the wake of the Enron and WorldCom corporate scandals, the purveyors of envy have found another opportunity to preach about what they consider the evils of high CEO salaries, retirements and bonuses. After all, according to them, evil must be afoot when a corporate executive earns more in a week that the average worker earns in an entire year. Let's look at it.

Dishonest Enron and WorldCom CEOs are rare among corporate executives. As such, all CEOs shouldn't be tarnished for the misdeeds of a few any more than we'd tarnish all newspaper reporters because a few among their ranks were liars like the Boston Globe's Patricia Smith and Mike Barnicle, Jayson Blair of the New York Times, and the Washington Post's Janet Cooke.


TOPICS: Editorial; News/Current Events
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To: radicalamericannationalist

Far be it for me to defend screw-ups (though Ovitz was amusing), but the folks you mentioned would have been quite a bit richer had they been successful. And I'm not going to blame someone for making the best deal they can when taking a job.

I would imagine, the available talent pool for those kinds of positions is pretty thin. I'd say there's probably under 100 guys capable and willing to run HP. And each of those guys is looking to make the best deal they can.


81 posted on 03/03/2005 8:43:47 PM PST by durasell (Friends are so alarming, My lover's never charming...)
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To: RFEngineer
Would you rather own stock in a company with the lowest-paid CEO or stock in a company with the highest-paid CEO?

Like when Lee Iacocca took over Chrysler and accepted a $1-a-year salary, no benefits and only stock options? He ended up making over $50 million because he turned the company around and had a vested interest in doing so. Or would you rather have had stock in Mattel when Jill Barad presided over a 50 percent drop in the stock price, then walked out with a severance package of $50 million? I would rather have had the Chrysler stock thank you very much.

82 posted on 03/03/2005 8:53:00 PM PST by FreedomCalls (It's the "Statue of Liberty," not the "Statue of Security.")
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To: HuntsvilleTxVeteran
I agree that some are and some not. Lee Raymond, CEO for EXXON receives 1 million in salary. But he has stock options which are breathtaking. If you go to XOM.com you will see a menue of insider trades. It reveals that Mr. Raymond Monthly, Monthy, will liquidate 50,000 one month, 200,000 the next month. Sometimes he will remove or liquidate several times. His liquidation account for anywhere from 15 million to 2 million per month.

I don't know, but there seems to be a lot of money. The stock options of the company are part of his contract and I therefore do not think they are illigal, but rather obscene.

83 posted on 03/03/2005 8:53:03 PM PST by Texas Songwriter (p)
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To: durasell
"And I'm not going to blame someone for making the best deal they can when taking a job."

And neither am I. The blame lays with boards. Probably one of the most basic concepts in corporate law is the "duty of due care." The board owes a fiduciary responsibility to exercise due care in making its decisions. I find it hard to believe that "negotiating" a deal that makes someone rich as Croesus, in spite of spectacular failure, can qualify as due care. The Disney case might be a first step in reminding board members that they actually have some responsibilities.


"I would imagine, the available talent pool for those kinds of positions is pretty thin."

Hmmm. Seems like the CEO set have found outsourcing manufacturing and tech jobs to be great policy. Why not go to India and find talented folks willing to work for much less (and maybe not get paid for getting fired)?
84 posted on 03/03/2005 8:54:28 PM PST by radicalamericannationalist (The Senate is our new goal: 60 in '06.)
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To: durasell
I'd say there's probably under 100 guys capable and willing to run HP.

And I would bet you are wrong. There are a lot of people who are running multi-billion dollar corporations who started out with nothing and when they started out no one would even dreamed of giving them a sandwich much less the position of CEO of a major company. For instance Dave Thomas of Wendy's, Jeff Bezos of Amazon, and Steve Jobs of Apple all took their companies to the billion-dollar level.

What there are are less than 100 people in the "good ol' boys" network of board chairmen from whom these people are drawn. The best CEOs are made in house, not hired from other successful companies.

85 posted on 03/03/2005 9:01:17 PM PST by FreedomCalls (It's the "Statue of Liberty," not the "Statue of Security.")
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To: FreedomCalls

Limbaugh, with no college, literally created an industry. Would he be one of the "100 guys capable and willing to run HP"?


86 posted on 03/03/2005 9:06:53 PM PST by radicalamericannationalist (The Senate is our new goal: 60 in '06.)
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To: radicalamericannationalist
Would he be one of the "100 guys capable and willing to run HP"?

I think he would be more than capable, but he's probably not willing. He's having too much fun doing what he does now.

87 posted on 03/03/2005 9:10:47 PM PST by FreedomCalls (It's the "Statue of Liberty," not the "Statue of Security.")
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To: FreedomCalls

I quite agree that he's probably happy where he is. My point is that he has the talent, but without the educational pedigree would never be looked at. Yet those with the right connections are brought on to destroy companies.


88 posted on 03/03/2005 9:18:21 PM PST by radicalamericannationalist (The Senate is our new goal: 60 in '06.)
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To: radicalamericannationalist

Yep, you're right.


89 posted on 03/03/2005 9:31:02 PM PST by FreedomCalls (It's the "Statue of Liberty," not the "Statue of Security.")
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To: FreedomCalls

I actually like the people you mentioned, Dave Thomas, Jobs,and Bezos. I wouldn't hire any of them to run a hot dog stand. These were guys who built their own companies and came up from nothing. The corporate animal who steps into another company is different thing altogether. Can you imagine Jobs running Boeing? Or Dave Thomas running GE?

Boards place very large bets on CEOs. Sometimes it works out and sometimes it doesn't.


90 posted on 03/03/2005 9:33:55 PM PST by durasell (Friends are so alarming, My lover's never charming...)
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To: durasell
Can you imagine Jobs running Boeing? Or Dave Thomas running GE?

My point is that contained within Boeing or GE are several people who are probably far more capable than the usual suspects from the incestuous circle of Yalies or HBS graduates they usually choose from. The CEO should always come from within.

91 posted on 03/03/2005 9:54:03 PM PST by FreedomCalls (It's the "Statue of Liberty," not the "Statue of Security.")
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To: FreedomCalls

I don't know if that's true anymore. Maybe in the days when people stayed with a company for 20 or 30 years, but today there is such job hopping that moving up the ranks of a company to the top spot is a rarity.

I do believe CEOs should have an expertise within the industry, but I remain unconvinced that they should have spent an entire career at a single company.


92 posted on 03/03/2005 9:58:06 PM PST by durasell (Friends are so alarming, My lover's never charming...)
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To: durasell
"... today there is such job hopping that moving up the ranks of a company to the top spot is a rarity."

Maybe we need to encourage it more.

93 posted on 03/03/2005 10:05:23 PM PST by FreedomCalls (It's the "Statue of Liberty," not the "Statue of Security.")
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To: dcuddeback
No. But they need to be penalized by the board when they fail to deliver expected revenue.

And they are. Just take a look at what happened to Carly Fiorina at Hewlett Packard.

94 posted on 03/03/2005 10:12:19 PM PST by Euro-American Scum (A poverty-stricken middle class must be a disarmed middle class)
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To: FreedomCalls

Everything happens for a reason. The job hopping trend didn't begin in a vacuum. Your basic employee today has as much loyalty to the company as the company has for him/her. If profits go down, then lay off 500 people and hire back other people "as needed." A job opens up at the competition, apply for it and take as many clients as you can with you.

Employees and companies today have to be nimble. I remain amazed at the number of people who continue to harbor bitterness over getting fired or a prized employee leaving to go over and work for the competition.

All of this isn't nice, but it's the way the world works.


95 posted on 03/03/2005 10:15:29 PM PST by durasell (Friends are so alarming, My lover's never charming...)
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To: Euro-American Scum

Getting 21 mill for trashing the company is being penalized? If your kids come home after curfew do you get them a new car?


96 posted on 03/03/2005 10:21:49 PM PST by radicalamericannationalist (The Senate is our new goal: 60 in '06.)
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To: durasell
All of this isn't nice, but it's the way the world works.

It seems to work in Japan.

97 posted on 03/03/2005 10:21:56 PM PST by FreedomCalls (It's the "Statue of Liberty," not the "Statue of Security.")
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To: radicalamericannationalist
Getting 21 mill for trashing the company is being penalized? If your kids come home after curfew do you get them a new car?

If it hurts bad enough, the board can change its policy.

98 posted on 03/03/2005 10:26:23 PM PST by Euro-American Scum (A poverty-stricken middle class must be a disarmed middle class)
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To: ConservativeStLouisGuy

"If you ask me, I know of only one class of workers who are overpaid and underworked – college professors."


A wh*re should be judged by the same criteria as other professionals offering services for pay -- such as dentists, lawyers, hairdressers, physicians, plumbers, etc. Is she professionally competent? Does she give good measure? Is she honest with her clients?
It is possible that the percentage of honest and competent wh*res is higher than that of plumbers and much higher than that of lawyers. And enormously higher than that of professors. ROBERT HEINLEIN


99 posted on 03/04/2005 12:04:22 AM PST by HuntsvilleTxVeteran (Rush agrees with me 98.5% of the time!)
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To: durasell
CEOs are fired all the time for costing the company money. The thing is, we rarely hear about them. Usually it's announced as a retirement.

true as that may be, the point being raised in this thread was, that a few of them are rewarded handsomely even if utter failures.

To me it's simple, you do well, you should be paid well, you do badly, then sorry no bonus for you (at best).

100 posted on 03/04/2005 2:31:02 AM PST by William of Orange (Liberalism: killing babies good, killing criminals bad...)
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