Log In | Register
261 Comments
PrintAP IMPACT: CEO pay chugs up in '07 despite economy
Sun Jun 15, 2008 1:51 PM EDT
Images 
(showing 1 of 4 photos)
(showing 1 of 4 photos)advertisement
NEW YORK — As the American economy slowed to a crawl and stockholders watched their money evaporate, CEO pay still chugged to yet more dizzying heights last year, an Associated Press analysis shows.
The AP review of compensation for the heads of companies in the Standard & Poor's 500 index finds the median pay package added up to nearly $8.4 million. That's a comfortable gain of about $280,000 from 2006.
The 3 1/2 percent pay increase for CEOs came even as the landscape for both workers and shareholders darkened considerably and the economy was choked by a housing market in free fall, layoffs and soaring prices for fuel and food.
At the top of the AP list: John Thain, who took the reins of Merrill Lynch on Dec. 1, 2007. His $83 million pay package was supercharged by a signing bonus and other enticements that lured him from the New York Stock Exchange to lead the investment bank as it was suffering its worst-ever losses.
Collectively, the 10 best-paid CEOs made more than half a billion dollars last year. Yet half the members of this stratospheric club were leading companies whose profits shrank dramatically.
The AP examination of CEO pay in 2007 mined data from the 410 companies in the S&P 500 that filed compensation disclosures with federal regulators in the first six months of this year.
The AP's formula, based on data from the past two years, adds up salary, perks, bonuses, above-market interest on pay set aside for later, and company estimates for the value of stock options and stock awards on the day they were granted last year.
That provides a clearer picture than pay totals required by the Securities and Exchange Commission, compensation experts say, because the SEC totals include expenses companies book during the year for previously granted stock compensation and retirement benefits.
The value of stock and options given to CEOs may turn out to be significantly higher or lower if they are ultimately cashed out, but the numbers in the AP formula do reflect the board of directors' estimate of the likely eventual payout.
The median salary figure of about $8.4 million means half the CEOs in the AP analysis made more than that and half made less.
There were some signs companies were pulling back on pay at the top: Out of the 316 companies in the AP survey that had the same CEO two years running, about two-fifths lowered the total pay package for their CEOs. However, the primary culprit for some was falling stock prices that cut into the value of the shares included in pay packages.
In many more cases, overall pay ballooned.
Rick Wagoner, chief executive of General Motors Corp., announced earlier this month the company had to close four plants that make trucks and SUVs because of lagging demand as fuel prices soar. That followed the posting of a $39 billion loss in 2007, a year when its stock price fell by about 19 percent, without adjusting for dividends.
And Wagoner? His pay rose 64 percent, to $15.7 million.
Last year was rocky for the economy and the stock market, making it a useful test of a concept called pay for performance — a term companies use to sell shareholders on the idea CEOs are being paid based on how well the company does.
According to this concept, trotted out frequently by the compensation committees of corporate boards in their proxy statements, a big chunk of CEO pay is considered "at risk," meaning it could disappear if CEOs don't meet established metrics.
But the AP analysis found that CEO pay rose and fell regardless of the direction of a company's stock price or profits.
Take KB Home, battered by the subprime lending crisis and the weak housing market. According to the Los Angeles-based homebuilder's proxy statement, CEO Jeffrey Mezger is entitled to a cash bonus based on a percentage of KB's profit.
The problem was there was no profit. KB Home lost almost $930 million in 2007 and its stock lost 60 percent of its value. But Mezger still made $24.4 million, as valued by the AP, including a $6 million cash bonus.
He pocketed that bonus because he exceeded certain objectives the board had set out for him. Among them were improving performance on a customer satisfaction survey and developing senior leadership in his first year as CEO.
"Compensation has become a shell game," said Richard Ferlauto, director of pension and benefits policy for the American Federation of State, County and Municipal Employees, a Washington labor group representing government workers.
"So they take away the bonus," he said, "but then they still come up with ways to make sure the executive gets a big payout."
Pay packages were somewhat smaller in the financial industry last year — banks, investment firms, mortgage companies, insurers and other institutions, all were roiled by the subprime lending disaster.
For companies in the financial sector that had the same CEO two years in a row, median pay dropped 4 1/4 percent to $8.7 million in 2007. But that was still a smaller decline than the 6 percent drop in earnings and 15 percent slump in stock prices before dividend adjustments, according to Standard & Poor's Capital IQ data service.
In some cases, companies appeared at first glance to have kept their promise to base pay on performance — only to have a different picture emerge on closer inspection.
For example, Washington Mutual Inc.'s stock took a nosedive last year — almost 70 percent — because of fallout from the housing and mortgage crises. The Seattle-base banking and mortgage lender lost $1.87 billion in the fourth quarter alone, and $67 million for the year.
WaMu's board decided not to give CEO Kerry Killinger a bonus for 2007. But board members also eliminated real-estate foreclosures and mortgage defaults as factors in whether to award him a bonus this year. After a shareholder revolt, the board decided to revise the formula, though it has not yet announced what metrics will be used.
Profit at insurer XL Capital fell more than 80 percent last year, and its stock price slumped about 30 percent. But Chief Executive Brian O'Hara made $7.5 million, a raise of 23 percent.
In its proxy statement, the company called its profits "unsatisfactory" but said operating earnings, which exclude certain factors, were better than planned.
O'Hara, who plans to retire later this year, was also given 62,500 shares of restricted stock and 250,000 stock options, which were not included in the calculation of his total compensation. The company said that was to "reflect the importance of Mr. O'Hara's role in the CEO succession process."
"The cracks in the idea of pay for performance really start to show when performance falters but pay still rises," said Paul Hodgson, senior research associate at The Corporate Library, an independent corporate governance research firm. "It's always a win-win scenario for executives."
Even companies with huge profits and soaring stock prices can be faulted for not following the principle of pay for performance, according to some experts on corporate pay.
As an example, these experts cite the energy industry, where CEOs in the AP survey chalked up a median 32 percent gain in 2007.
It's no secret that profits at oil and gas companies have raced higher in recent years, and stock prices have followed. But that's not necessarily because CEOs are more skillful at operating their businesses. The boon has more to do with the surge in the price of oil, which this year topped $130 a barrel for the first time on the New York Mercantile Exchange.
"The issue of an escalated price of oil shouldn't flow back in to executives' wallets, but to shareholders in the form of higher dividends," said activist investor Gerald R. Armstrong of Denver, who owns shares in XTO Energy Inc.
XTO's CEO Bob Simpson, with annual compensation of more than $50 million, has ranked in the AP's list of the 10 highest-paid chief executives for the past two years.
Pay consultants say that illustrates a weakness in executive pay programs. When outside factors help the bottom line, CEOs tend to benefit personally as well. But the opposite is not generally true, said Bill Coleman, chief compensation officer for Salary.com, which provides corporate pay information.
"How convenient," he said. "I take credit for everything good and I blame external factors for anything bad, but say that shouldn't affect my pay."
There were examples of companies that really did cut back on pay during a bad year.
Department store operator Dillard's Inc., plagued by falling sales, profits and stock value, cut CEO William Dillard's pay package by two-thirds, to $1.1 million, according to the AP calculation.
Of course, compensation is not always designed to reflect how the company does in the year it's handed out. Sometimes boards give out bonuses to the CEO for a strong performance a year earlier, and sometimes they are pegged to future performance goals.
At investment bank Morgan Stanley, CEO John Mack was paid a total of $41.7 million for 2007, a rough year for the bank. That made him No. 8 on the AP list of CEOs.
But Mack's pay was largely tied to his performance in 2006. The investment bank said in February that Mack would not be taking home a bonus for 2007 because of the company's heavy losses in the subprime lending crisis.
At Merrill Lynch, part of Thain's $83.1 million pay package hinges on whether the stock rises. He got options on 1.8 million shares as part of his signing agreement, but two-thirds of them will only vest if the price of Merrill stock clears specific hurdles for 15 straight trading days.
Right now Merrill shares trade at about $35, far from the $80 a share level that has to be reached for the first bundle of Thain's options to be in the money.
Shareholders aren't in the boardroom when pay decisions are made, but at some companies they are gaining clout and holding directors more accountable.
In May, insurer Aflac Inc. became the first major U.S. company to give investors a vote on how senior management is paid, and shareholder proposals requesting an annual nonbinding vote on pay received slightly more support at U.S. companies this year.
This issue has also spilled onto the presidential campaign trail. Democrat Barack Obama and Republican John McCain support giving shareholders some say on executive pay. Obama wants to legislate it, while McCain says companies should make the move themselves.
The votes would be nonbinding, but they would still shine more light on executive pay.
___
Also contributing to this story: Business Writers Vinnee Tong, Ellen Simon, Jayna Desai, Tali Arbel, Erin Conroy, Mike Obel, Candice Choi, J.W. Elphinstone, Kristen A. Lee, Ben Berkowitz and Dorothea Degen.
© 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
48 Votes- Enjoy this article? Help vote it up the 'Vine.
Published to:
- Rachel Beck's Column, All of Newsvine
- Groups: Corporatism, Das Krapital, Left of Center
- Regions: United States , New York
 | Top-paid CEOs of 2006: Where are they now? | Associated Press | Sun Jun 15 | 0 |
| Fixer-up: New CEOs at troubled companies earn top pay in '07 | Associated Press | Sun Jun 15 | 0 |
| 'Say on pay' bills may be more cudgel than reality | Associated Press | Sun Jun 15 | 0 |
| ALL BUSINESS: Juicy details on CEO pay | Associated Press | Mon Jun 16 | 0 |
 | Executive Pay Debate Raging in Europe and the United States | fpif.org | Sun Jun 15 | 1 |
- Public Discussion (261)
- Corporatism
- Das Krapital
- Left of Center
What's this?
Who's leading the conversation?
This visualization below allows you to see the impact that each user
has on the current conversation.
The top row contains the group of users who have had the most impact, the 2nd
row the group of users who have had the 2nd most impact (et cetera).
Users with similar impact are grouped together, and the average score of the group
is shown to the left of the group. The author of the article is also shown on the
left, in their corresponding group.
Each user's score is based on the number of comments the user has made plus the
number of votes their comments have received. The scores are calculated relative
one another, so while their absolute value is not particularly important, their
relative difference does indicate a larger difference in impact on the conversation.
45
8.7
{"commentId":1972965,"authorDomain":"b-shaughnessy"}
If these CEO's were REALLY interested in maximizing the profit of their companies, they'd take a pay-cut. But they're not, so they don't.
{"commentId":1972965,"threadId":"289830","contentId":"1578073","authorDomain":"b-shaughnessy"}
- 7 votes
#1 - Sun Jun 15, 2008 2:13 PM EDT{"commentId":1973017,"authorDomain":"jaybutler"}
The CEO's are maximizing the values that the compensation committees choose to calculate their pay. If it is profit, the CEO will strive to maximize it.
If you want a mediocre company, hire a mediocre CEO who is willing to work for little salary. If you want a great company, hire someone you believe to be great and provide a pay package that rewards greatly when value is maximized.
That is not to say that all pay packages are structured correctly nor do they all achieve the actual desired result by the board.
Right now Merrill shares trade at about $35, far from the $80 a share level that has to be reached for the first bundle of Thain's options to be in the money.
I am sure that Merrill-Lynch shareholders would be ecstatic if Thain earned his $83.1 million package because to do so he would have had a huge positive impact on the value of their investments in the company.
{"commentId":1973017,"threadId":"289830","contentId":"1578073","authorDomain":"jaybutler"}
- 8 votes
{"commentId":1973177,"authorDomain":"PamelaDrew"}
If you want a great company, hire someone you believe to be great and provide a pay package that rewards greatly when value is maximized.
And when they screw up the entire operation, let them leave like the did a good job too!!
BOSTON (MarketWatch) -- Former Citigroup chief executive Chuck Prince will receive stock options, grants and other benefits worth an estimated $29.5 million when he retires, according to a regulatory filing late Thursday.
In addition, he will get a cash incentive award similar to the $13.2 million received for 2006, but pro-rated for the months he served as CEO in 2007 and adjusted for shareholder return.
What's a small housing collapse among friends?
{"commentId":1973177,"threadId":"289830","contentId":"1578073","authorDomain":"PamelaDrew"}
- 9 votes
{"commentId":1973210,"authorDomain":"b-shaughnessy"}
If you want a mediocre company, hire a mediocre CEO who is willing to work for little salary. If you want a great company, hire someone you believe to be great and provide a pay package that rewards greatly when value is maximized.
That's a sales pitch. If they wanted they could surely find someone who is just as capable but would work for half the salary. These people shield themselves from the market forces that would drag their prices down.
{"commentId":1973210,"threadId":"289830","contentId":"1578073","authorDomain":"b-shaughnessy"}
- 6 votes
{"commentId":1973221,"authorDomain":"JoulesBeef"}
bull crap jay.. these guys sit on each others boards and decide each others saleries.
CEO who have tanked companies have gotten raises and huge severance packages.
It has been proven many times that it is BS.. er disney, the stock exchange, the guys that helped cause the housing crisis.
BS
you also know this mega saleries are a modern phen.. 20 years ago you would have never heard anythign like his.
{"commentId":1973221,"threadId":"289830","contentId":"1578073","authorDomain":"JoulesBeef"}
- 10 votes
{"commentId":1973264,"authorDomain":"eriqalan"}
If you want a mediocre company, hire a mediocre CEO who is willing to work for little salary. If you want a great company, hire someone you believe to be great and provide a pay package that rewards greatly when value is maximized.
There is no truth to this. Higher paid executives often perform mediocrely; lower paid executives are often great; there is no correlation here.
{"commentId":1973264,"threadId":"289830","contentId":"1578073","authorDomain":"eriqalan"}
- 7 votes
{"commentId":1973409,"authorDomain":"twoxntrix"}
It is SHAMEFUL that they can, and willfully do this, especially in this economy !!!!!
There is a minimum wage for the rest of us. I think there should be a maximum wage for CEOs.
After all, they are really just like upper management, aren't they?
So many "regular" workers are struggling just to make ends meet, not buy a third or fourth home or a newer plane
Of course it wouldn't be quite so insulting if they paid fair and equitable taxes, now would it???
Just my 2 cents worth.
{"commentId":1973409,"threadId":"289830","contentId":"1578073","authorDomain":"twoxntrix"}
- 3 votes
{"commentId":1973605,"authorDomain":"jdoyle"}
If you want a mediocre company, hire a mediocre CEO who is willing to work for little salary. If you want a great company, hire someone you believe to be great and provide a pay package that rewards greatly when value is maximized.
Thats a load of BS Jay and you know it:
Hewlett-Packard Co. Chairman and CEO Carly Fiorina, one of the most powerful women in corporate America, is leaving the troubled computer maker after being forced out by the company's board.
Shares of HP (Research) jumped 6.9 percent in heavy trading on the New York Stock Exchange Wednesday on the news. But at one point, the stock was up as much as 10.5 percent.
"The stock is up a bit on the fact that nobody liked Carly's leadership all that much," said Robert Cihra, an analyst with Fulcrum Global Partners. "The Street had lost all faith in her and the market's hope is that anyone will be better."
Fiorina, the only female CEO at a company in the Dow Jones industrial average, had been with HP since 1999. But the company's controversial deal to buy Compaq in the spring of 2002 -- after a bruising proxy fight led by one of the Hewlett family heirs -- has not produced the shareholder returns or profits she had promised.
"While I regret the board and I have differences about how to execute HP's strategy, I respect their decision," Fiorina said in a statement released by the company.
On a conference call with reporters, executives said Fiorina was not terminated for cause and that she would receive severance pay -- and a company spokesman said she'll get a payout of approximately $21 million, including stock options (see correction).
http://money.cnn.com/2005/02/09/technology/hp_fiorina/
How could she "earn" 21 mil for being fired?
{"commentId":1973605,"threadId":"289830","contentId":"1578073","authorDomain":"jdoyle"}
- 6 votes
{"commentId":1973628,"authorDomain":"jaybutler"}
And when they screw up the entire operation, let them leave like the did a good job too!!
Pamela, I agree. The packages should certainly not reward for incompetence. But, they should also not penalize too greatly for risk. Failing companies are bound to continue failing and, sometimes, a risky change is required to attempt to save that company.
If they wanted they could surely find someone who is just as capable but would work for half the salary.
Merrill certainly did not stay inside its own ranks to take the safe route. Thain is as much an outsider as anyone. The company is taking a risk with him. I am sure that the board did not run up and down Wall St. waving an $83MM check to see who would come running. They looked for someone that they thought could save the company and negotiated compensation.
CEO who have tanked companies have gotten raises and huge severance packages.
Joules, I agree. Did I not say in my comment that these packages do not always have the intended consequences?
Higher paid executives often perform mediocrely; lower paid executives are often great; there is no correlation here.
Try to lure a competent executive to run your company with the promise of a small salary and a high risk. If they already have earned a decent amount of money in their careers, why would they want to put in the effort it takes to run a company for little reward? You have to offer them something more than they could otherwise earn. If they can consult part time for what you offer them in salary, why take on that stress?
{"commentId":1973628,"threadId":"289830","contentId":"1578073","authorDomain":"jaybutler"}
- 2 votes
{"commentId":1974365,"authorDomain":"behindmyscreen"}
pay them 100K per year and any other compensation is tied to stock options that they cannot sell for 1 year past the time that they get those specific options, this way, you avoid pump and dumping.
{"commentId":1974365,"threadId":"289830","contentId":"1578073","authorDomain":"behindmyscreen"}
- 4 votes
{"commentId":1974705,"authorDomain":"b-shaughnessy"}
Merrill certainly did not stay inside its own ranks to take the safe route. Thain is as much an outsider as anyone. The company is taking a risk with him. I am sure that the board did not run up and down Wall St. waving an $83MM check to see who would come running. They looked for someone that they thought could save the company and negotiated compensation.
Whatever their method was, the result makes them look stupid and/or corrupt. It's not just the CEOs, it's the all of the other executives at these companies with enormous compensation, too... they're being treated like a precious commodity, and I don't see what they do that justifies that kind of premium price.
{"commentId":1974705,"threadId":"289830","contentId":"1578073","authorDomain":"b-shaughnessy"}
- 1 vote
{"commentId":1972998,"authorDomain":"lisag"}
The appalling inequities in wealth and income that have come to characterize our economy are disgraceful and devastating to the future of our country. The 50 top hedge fund managers averaged $29 billion in 2007. The top "earner" made $3.7 billion in 2007. That's 30 times what the average American family made in a year.
When are Americans going to stand up and scream, "No more!!"
{"commentId":1972998,"threadId":"289830","contentId":"1578073","authorDomain":"lisag"}
- 4 votes
#2 - Sun Jun 15, 2008 2:23 PM EDT{"commentId":1973073,"authorDomain":"jaybutler"}
The 50 top hedge fund managers averaged $29 billion in 2007. The top "earner" made $3.7 billion in 2007. That's 30 times what the average American family made in a year.
Do you think that the "top 50" of anything are anywhere close to average? Are the average athletes close to the top 50? The all-stars in any league are significantly better than the average of the league itself let alone the general average. Are the top 50 singers close to the average? Watching the first few rounds of American Idol can show the great disparity.
Beside, what do you care what a hedge fund manager earns? Unless you are wealthy, it is unlikely that you participate in a hedge fund. So, it is the fund investors' money, not yours, on which they are earning their commissions.
These managers have a very specialized talent. I would guess that most of them are always working to ensure the highest possible value of their funds. If they have put in the effort to profit from their skills in a legal way, what is wrong with that?
{"commentId":1973073,"threadId":"289830","contentId":"1578073","authorDomain":"jaybutler"}
- 6 votes
{"commentId":1973089,"authorDomain":"prompt"}
When are Americans going to stand up and scream, "No more!!"
You mean no more free market? Hopefully never.
{"commentId":1973089,"threadId":"289830","contentId":"1578073","authorDomain":"prompt"}
- 3 votes
{"commentId":1973251,"authorDomain":"JoulesBeef"}
it's called trickle up economics.. it's what happens when you constantly cut the tax rate at the top and don't do the same at the middle.. Its what happens when you cut taxes on capital gains but not on the same dollar that someone works hard for.. see the rich have more disposible income for capital gains.
and the little remark that these ceos are like sport stars belies the fact that they get raises when they do bad, unlike sports stars or rock stars.
as for free market I am guessing you mean the protectionist marketing the gop has brought us that ensures no competition int hings like broard band.. I suppose you mean like when walmark gets a pass on propertie taxes and even sales taxes to put a store near mine to put me out of business.. I guess this freee market you are talking about when a guy in my town donates money to a senator and wins a gov contract on a bid that is worse than mine..
is this the free market you love sooooo much?
Free market my ass.
{"commentId":1973251,"threadId":"289830","contentId":"1578073","authorDomain":"JoulesBeef"}
- 8 votes
{"commentId":1973263,"authorDomain":"tex66"}
You sit on my Board of Directors and vote for my fat compensation package, and I'll
sit on your board and vote for your fat package. What a deal!
{"commentId":1973263,"threadId":"289830","contentId":"1578073","authorDomain":"tex66"}
- 3 votes
{"commentId":1973320,"authorDomain":"prompt"}
as for free market I am guessing you mean the protectionist marketing the gop has brought us that ensures no competition int hings like broard band.. I suppose you mean like when walmark gets a pass on propertie taxes and even sales taxes to put a store near mine to put me out of business.. I guess this freee market you are talking about when a guy in my town donates money to a senator and wins a gov contract on a bid that is worse than mine..
is this the free market you love sooooo much?
Free market my ass.
Calm down buddy, I hate those things just as much as you do. The government should not be used to support big business, or any business for that matter. I said free market, not market cronyism.
Yet you support these things, in the guise of social equality! You support the government doing more and more and the government keeps exploiting you because they can. You are right that taxes should be brought down for the middle class, but that doesn't mean we should bump up taxes for the rich. Cut services, that is the only answer that is fair and right.
{"commentId":1973320,"threadId":"289830","contentId":"1578073","authorDomain":"prompt"}
- 4 votes
{"commentId":1973327,"authorDomain":"lisag"}
IMO, "top" athletes are obscenely overpaid (ditto for actors). $60 for a ticket to a baseball game?!? What happened to the Great American Pastime when the average family can't afford to participate? And, how many athletes are at the top of their game without steroids? Do hedge fund managers really "earn" billions of dollars? I don't think so.
Money and power is what this is all about...with money comes power...into the hands of the minute group of elites. And this is what's running our country. We're living in another Gilded Age.
The problem with the free market is that those who espouse it today are largely working on K Street. They're dressed in jeans and hard hats, masquerading as "average" Americans. They don't really believe in the free market because every time a large corporation gets into financial trouble, who do they turn to for help? The government (read: Bearn Stears, as only the latest example). And taxpayers (that's me and you) bear the financial pain of it. This has been happening since the early days of industrialization (railroads, coal, etc.). These companies rely on the government to bail them out when they're in trouble or to make their businesses profitable. This is not how a free market works.
Add the corporate cronyism we have now. Lobbyists who become federal officials who become lobbyists. There's an exchange of personnel that makes it obvious what's going on. Do some homework--you'll see what I'm talking about.
We need a collaborative commonwealth, where opportunities are more evenly distributed and taken out of the hands of the few to be spread among the many.
Even the conservative magazine "The American Conservative" has discussed the gross income disparities and the amassing of wealth we've been seeing here since our de-instrustrialization of the past 25 to 30 years. There is a cold-blooded lack of concern for the poor and working people in the U.S.
Are you ready to become part of a class-ridden society? I'm not.
{"commentId":1973327,"threadId":"289830","contentId":"1578073","authorDomain":"lisag"}
- 1 vote
{"commentId":1973354,"authorDomain":"lisag"}
as for free market I am guessing you mean the protectionist marketing the gop has brought us that ensures no competition int hings like broard band.. I suppose you mean like when walmark gets a pass on propertie taxes and even sales taxes to put a store near mine to put me out of business..
Funny you mention Wal-Mart. It's a great example of what's wrong here. Wal-Mart pays crap, treats people like crap (like offering part-time work so they don't have to provide any healthcare benefits), but they succeed because of what they do best: offer low prices. Americans are too willing to look the other way on how cultures like Wal-Mart are destroying our standard of living because they can save $50 on a grocery bill. I realize the short-term benefit but, man, are we going to pay for this "affordability" in the long run.
{"commentId":1973354,"threadId":"289830","contentId":"1578073","authorDomain":"lisag"}
- 2 votes
{"commentId":1973394,"authorDomain":"prompt"}
Funny you mention Wal-Mart. It's a great example of what's wrong here. Wal-Mart pays crap, treats people like crap (like offering part-time work so they don't have to provide any healthcare benefits), but they succeed because of what they do best: offer low prices. Americans are too willing to look the other way on how cultures like Wal-Mart are destroying our standard of living because they can save $50 on a grocery bill. I realize the short-term benefit but, man, are we going to pay for this "affordability" in the long run.
How many American families can survive only because Wal-Mart offers such low prices? There are two sides to every coin.
{"commentId":1973394,"threadId":"289830","contentId":"1578073","authorDomain":"prompt"}
- 4 votes
{"commentId":1973421,"authorDomain":"lisag"}
How many American families can survive only because Wal-Mart offers such low prices? There are two sides to every coin.
I don't know. How many? Can you cite this? I'll bet it's a lot fewer than you might imagine.
Go to a farmer's market for food, a thrift shop for clothes and household goods, etc. There are lots of ways to save money without supporting the Walton family. Wal-Mart is too convenient and we're too stupid.
{"commentId":1973421,"threadId":"289830","contentId":"1578073","authorDomain":"lisag"}
- 3 votes
{"commentId":1973473,"authorDomain":"prompt"}
That report found that the existence of Wal-Mart between 1985 and 2004 resulted in a 3.1% cumulative reduction in consumer prices by 2004. This translated into consumer savings amounting to $263 billion in 2004—$895 per person and $2,330 per household.
Employers don't pay wages -- consumers do. The "high cost of low prices" means what it says -- that Wal-Mart offers too many bargains and does not gouge consumers nearly enough. If only Wal-Mart could be compelled to charge much higher prices -- like Neiman-Marcus or Bloomingdales -- then the company would never threaten those poor little "mom and pop" stores like K-Mart and Kroger. With higher prices, Wal-Mart could supposedly hire just as many Americans as it does (1.2 million), yet offer better wages and benefits.
The dollar value of a retail employee's sales-per-hour is indeed likely to be much larger at Tiffany than Wal-Mart. Sales-per-hour are also larger at Costco, where people wait in line to buy giant TVs, diamond jewelry, expensive wine and notoriously big packages. But families with modest incomes sometimes prefer to make small, simple purchases at low prices. These are the consumers Wal-Mart critics love to hate.
{"commentId":1973473,"threadId":"289830","contentId":"1578073","authorDomain":"prompt"}
- 4 votes
{"commentId":1973672,"authorDomain":"jaybutler"}
$60 for a ticket to a baseball game?!?
Are the stands filled at the current ticket prices? The seats are worth what people are willing to pay for them.
Do hedge fund managers really "earn" billions of dollars? I don't think so.
So, you are the arbiter of who "earns" their salary? Do you "earn" yours? Can I decide that?
How about if you ask the fund participants if the manager (that they are paying) is earning his salary? I bet that their answer might differ from yours.
These companies rely on the government to bail them out when they're in trouble or to make their businesses profitable.
Actually, quite a number of financial companies worldwide got caught with risk exposure in the mortgage markets. The government is caught with the prospect of a company failing. That failure would likely have resulted in a lot of pain for the average homeowner. What to do?
In the 1970's Chrysler was close to failure. The government guaranteed loans to save the company. Had the company failed hundreds of thousands of employees and retirees dependent on Chrysler would have been hurt. What do you do there? Let the company fail and those that are dependent on it be damned?
{"commentId":1973672,"threadId":"289830","contentId":"1578073","authorDomain":"jaybutler"}
- 5 votes
{"commentId":1973699,"authorDomain":"prompt"}
So, you are the arbiter of who "earns" their salary? Do you "earn" yours? Can I decide that?
A great point. I worked a number of minimum wage jobs and to be honest I was often getting paid too much, thanks to the government -- so why would we let them set a salary cap as well?
{"commentId":1973699,"threadId":"289830","contentId":"1578073","authorDomain":"prompt"}
- 4 votes
{"commentId":1973786,"authorDomain":"lisag"}
Are the stands filled at the current ticket prices? The seats are worth what people are willing to pay for them.
True enough, but it cuts out the majority of American families because they can't afford it. You miss my point. I'm not talking about a ballet or opera or Rolling Stones concert. It's a baseball game. Average families can't afford to attend because professional sports has become a money racket filled with corporate endorsements and overpaid steroid-ridden athletes. Remember when the boards were white? Try to find a white spot today.
Do hedge fund managers really "earn" billions of dollars? I don't think so.
So, you are the arbiter of who "earns" their salary? Do you "earn" yours? Can I decide that?
Oh, come on. Who can truthfully say they've earned billions? Apples for apples, I actually earn signifcantly more than my salary, as has been the case most of my career--I'm a woman, I never take home as much as my male peers. Don't go there unless you're set for a real debate.
As far as the government bailing out companies... My husband and I (along with two partners) launched a company that ultimate failed largely because of anti-trust issues not addressed by the SEC. Did the government bail us out? You can guess the answer to that--it's a big "NO."
What is wrong with Americans who take up for CEOs and profiteers who are raping them? There must be a name for this syndrome...
{"commentId":1973786,"threadId":"289830","contentId":"1578073","authorDomain":"lisag"}
- 1 vote
{"commentId":1973808,"authorDomain":"prompt"}
It's a baseball game. Average families can't afford to attend because professional sports has become a money racket filled with corporate endorsements and overpaid steroid-ridden athletes.
Here in Toronto you can go to a Blue Jays game for under $5 on Tuesdays and under $10 any other day. Furthermore, why do you have to attend an MLB game? There are plenty of baseball games going on across the country on each and everything day with nice weather, most that would be under $5 admission, if any.
As far as the government bailing out companies... My husband and I (along with two partners) launched a company that ultimate failed largely because of anti-trust issues not addressed by the SEC. Did the government bail us out? You can guess the answer to that--it's a big "NO."
Government bail outs are a disgusting use of taxpayers money.
{"commentId":1973808,"threadId":"289830","contentId":"1578073","authorDomain":"prompt"}
- 4 votes
{"commentId":1974162,"authorDomain":"lisag"}
Here in Toronto you can go to a Blue Jays game for under $5 on Tuesdays and under $10 any other day.
So you're a minor-leaguer at heart... $10 baseball tickets and universal healthcare. Life is different up north, eh?
{"commentId":1974162,"threadId":"289830","contentId":"1578073","authorDomain":"lisag"}
{"commentId":1974369,"authorDomain":"behindmyscreen"}
prompt,
not no more free market, but no more broken free market.
thed free market is not serving 80% of the people. that means it is broken.
{"commentId":1974369,"threadId":"289830","contentId":"1578073","authorDomain":"behindmyscreen"}
- 1 vote
{"commentId":1973016,"authorDomain":"proobone"}
The government should keep out of this. This America, leave free enterprise alone. Government just keeps creeping into everything and I'm tired of it.
{"commentId":1973016,"threadId":"289830","contentId":"1578073","authorDomain":"proobone"}
- 3 votes
#3 - Sun Jun 15, 2008 2:28 PM EDT{"commentId":1973113,"authorDomain":"wonderwoman351"}
Says the CEO (Or aspiring CEO) who took home several mill this year. Am I right?
{"commentId":1973113,"threadId":"289830","contentId":"1578073","authorDomain":"wonderwoman351"}
{"commentId":1973209,"authorDomain":"roan"}
If you think only people who earn that amount or aspire to those positions will defend unnecessary government interference, do you also believe that only people who do not earn that amount and do not aspire to those positions support it?
{"commentId":1973209,"threadId":"289830","contentId":"1578073","authorDomain":"roan"}
- 3 votes
{"commentId":1973266,"authorDomain":"JoulesBeef"}
in 1960 they were taxed at 90% and this wouldn't have been a problem.
yeah sounds aweful.. the guy at lynch would have had to settle for 8 million instead of 80.. oh my, how will he put food on his table.
the big problem though is the deregulation of the industry and the way ceos are choosen and the way boards of filled.. belvie me if you let me set my own salery, I would have about 80 million as well. They pay people to find out just how much they can rape from the company and they pay themsleves that.
free market has zip to do with it, or ceos would be paid a market rate rather than some nonsence they set up themsleves with the baord.
{"commentId":1973266,"threadId":"289830","contentId":"1578073","authorDomain":"JoulesBeef"}
- 3 votes
{"commentId":1973299,"authorDomain":"wonderwoman351"}
As in to say that if they can interfere in free enterprise, then where do I get off having a problem with international wire tapping, or some other relevant example? It would be hypocritical of me. In a way, due to inflation, we need these puppeteers to soak up useless printed paper. However, once they do, it isn't as if they are going to burn it to absorb the balance. They go out and live lives of luxury. They also borrow against a system that doesn't have the gold to back it up, and at a better rate, because they understand the scheme. Yet, here is the moral crisis: They have showered us with all of this excess, for decades. And now, because the world is calling us on it, us citizens are supposed to pony up, yet these jerks are able to continue their lives of excess? Where is the equality and where is the evidence that they are looking out for my best interest?
{"commentId":1973299,"threadId":"289830","contentId":"1578073","authorDomain":"wonderwoman351"}
{"commentId":1973312,"authorDomain":"eriqalan"}
We don't have free enterprise, we can't have free enterprise, would all those who don't understand economics and terms like free enterprise quit using them.
Free enterprise can only exist in a system where nothing can be owned and everything is always in the "free" market. That is why the enterprise is "free".
Private enterprise (what we have) is a modified form of aristocracy where things can be owned, inherited, etc. - going off the "free" market - this system significantly benefits those who are lucky enough to be born to the right parents / class, such that they can retain those gains (inherit) without competing for them in the "free" market.
{"commentId":1973312,"threadId":"289830","contentId":"1578073","authorDomain":"eriqalan"}
- 2 votes
{"commentId":1973337,"authorDomain":"prompt"}
in 1960 they were taxed at 90% and this wouldn't have been a problem.
yeah sounds aweful.. the guy at lynch would have had to settle for 8 million instead of 80.. oh my, how will he put food on his table.
Yes, let's steal 90% of his yearly value. Disgusting.
Eriq Samson - I suggest you read an economics textbook. "Free market" does NOT mean everything is free. It means you are free to do what you want with your property, as long as you don't infringe on the property rights of others.
{"commentId":1973337,"threadId":"289830","contentId":"1578073","authorDomain":"prompt"}
- 4 votes
{"commentId":1973350,"authorDomain":"wonderwoman351"}
eriq, pardon the misrepresentation. I was only siting examples of previous comments. However, thank you for the lesson.
{"commentId":1973350,"threadId":"289830","contentId":"1578073","authorDomain":"wonderwoman351"}
{"commentId":1973445,"authorDomain":"lisag"}
"Free market" does NOT mean everything is free. It means you are free to do what you want with your property, as long as you don't infringe on the property rights of others.
As long as Washington D.C. is rife with lobbyists from the K Street Project, we don't have a free market. It's corrupt--can't you see this?
{"commentId":1973445,"threadId":"289830","contentId":"1578073","authorDomain":"lisag"}
- 1 vote
{"commentId":1973482,"authorDomain":"prompt"}
As long as Washington D.C. is rife with lobbyists from the K Street Project, we don't have a free market. It's corrupt--can't you see this?
I see it all too clearly. But as long as people keep voting for big government the problem will continue -- can't you see that?
{"commentId":1973482,"threadId":"289830","contentId":"1578073","authorDomain":"prompt"}
- 4 votes
{"commentId":1973509,"authorDomain":"wonderwoman351"}
So we give up our voice to stop corruption, can you see my point??
{"commentId":1973509,"threadId":"289830","contentId":"1578073","authorDomain":"wonderwoman351"}
{"commentId":1974060,"authorDomain":"eriqalan"}
Prompt - I suggest you read an economics textbook.
I've written a couple, thanks.
"Free market" does NOT mean everything is free. It means you are free to do what you want with your property, as long as you don't infringe on the property rights of others.
This is kind of the point: (1) there are no property rights (that is a construct of government - in our system all property rights conflict with all others), and (2) by removing any property from the market (by private ownership, inheritance, etc) you create a "closed" market. In a "free" market all property must at all times be available for purchase - i.e. you may lease / rent (purchase the "time value") but never own (which would be a monopoly of the "time value" - a closed market). In a truly free market, you could have people buying shifts (day shift, swing shift, graveyard shift) of a factory's time and producing different products in that factory, a personnel firm running the human resources function for several competing companies, etc.
{"commentId":1974060,"threadId":"289830","contentId":"1578073","authorDomain":"eriqalan"}
- 3 votes
{"commentId":1974374,"authorDomain":"behindmyscreen"}
guilded era policies kill the economy. that is what we have now and that is why the economy is tanking.
{"commentId":1974374,"threadId":"289830","contentId":"1578073","authorDomain":"behindmyscreen"}
- 1 vote
{"commentId":1974905,"authorDomain":"roan"}
I've written a couple, thanks.
Title and ISBN number please?
{"commentId":1974905,"threadId":"289830","contentId":"1578073","authorDomain":"roan"}
- 2 votes
{"commentId":1977672,"authorDomain":"lisag"}
As long as Washington D.C. is rife with lobbyists from the K Street Project, we don't have a free market. It's corrupt--can't you see this?
I see it all too clearly. But as long as people keep voting for big government the problem will continue -- can't you see that?
There is a pseudo populist message that government is bad and that big government is even worse. The problem is not so much the size of government as it is the lack of ethics with which government operates. It begins with K Street--lobbyists and corporations that fund campaigns then set up shop in D.C. to keep the pressure on politicians to provide a return on their investment. Lobbyists have even written legislation, which then gets passed by our millionaire senators. Then you have the "Senator for Oil and Gas," the "Senator for Health Insurance," the "Senator for Pharmaceuticals," etc. etc. This is nothing less than a perpetration of fraud on the American people. Our government is corrupt.
Imagine a government of the people, by the people and for the people. I realize this is an idealism, but it's what our constitution put forth, and our politicians have purposely failed us for their own gain.
I believe the problem is more with corrupt politicians and the acquiring of wealth and power than it is with the size of government.
{"commentId":1977672,"threadId":"289830","contentId":"1578073","authorDomain":"lisag"}
- 1 vote
{"commentId":1973065,"authorDomain":"dsound"}
who needs 34 million dollars even for a whole lifetime?
{"commentId":1973065,"threadId":"289830","contentId":"1578073","authorDomain":"dsound"}
- 5 votes
#4 - Sun Jun 15, 2008 2:36 PM EDT{"commentId":1973083,"authorDomain":"jaybutler"}
Who decides how much other people need?
{"commentId":1973083,"threadId":"289830","contentId":"1578073","authorDomain":"jaybutler"}
- 3 votes
{"commentId":1973234,"authorDomain":"roan"}
From each according to his ability, to each according to his needs.
{"commentId":1973234,"threadId":"289830","contentId":"1578073","authorDomain":"roan"}
- 3 votes
{"commentId":1973282,"authorDomain":"JoulesBeef"}
jay are you suggesting that need and want are the same thing?
the big point people miss is trickle down is bs and this proves it..
even in a recession as people are losing their jobs and no jobs are being created to fill the gap and as prices skyrocket and we are all needing stimulating, these guys get a raise.. just like they do when things go well, unfort when thinsg go well that money doesn't trickle down..
trickle up economics is what youa re seeing here.
I wonder how you feel about eisner who got mega bucks for making disney lose money?
{"commentId":1973282,"threadId":"289830","contentId":"1578073","authorDomain":"JoulesBeef"}
- 3 votes
{"commentId":1973290,"authorDomain":"thinkpatrick"}
Since the lower two-thirds of the populace drive the very greatest bulk of America's economic power, if it is economics that ultimately decide how much a CEO is paid, then it is ultimately the lower two-thirds of the populace who will make that decision ...
... sooner, or later.
{"commentId":1973290,"threadId":"289830","contentId":"1578073","authorDomain":"thinkpatrick"}
- 2 votes
{"commentId":1973325,"authorDomain":"eriqalan"}
Tpoic - only if they actually have the power to implement change in that arena. For example, we can choose which cereal to buy but there are only 4 major manufacturers making over 90% of all cereal; which laundry soap to buy but there are only 4 major manufacturers making over 90% of all laundry soap; etc. etc.
Consumers have no impact when there is no real choices, no way to "vote" with your pocketbook.
{"commentId":1973325,"threadId":"289830","contentId":"1578073","authorDomain":"eriqalan"}
- 2 votes
{"commentId":1973685,"authorDomain":"jaybutler"}
I wonder how you feel about eisner who got mega bucks for making disney lose money?
Eisner should have been removed years ago.
{"commentId":1973685,"threadId":"289830","contentId":"1578073","authorDomain":"jaybutler"}
- 3 votes
{"commentId":1974418,"authorDomain":"dsound"}
Who decides how much other people need?
in this case, a board of directors I suppose. I wasn't deciding, I was asking. personally it seems a bit mismatched. as pointed out above, a leader does not a company make. we are free in this country to make enormous amounts of money but such an amount of money is rarely made without someone being shafted. expect criticism.
{"commentId":1974418,"threadId":"289830","contentId":"1578073","authorDomain":"dsound"}
{"commentId":1973067,"authorDomain":"sld11"}
The ratio of CEO and upper management vs. employees pay is disgusting, shameful, un-American. Many regular people I talk to wonder how this super rich CEO's sleep at night. The lay-offs, downsizing, cut backs, increased productivity, all claiming to cut costs, end up benefiting those at the top while breaking the backs of the workers. Average American family life takes a beating with Moms and Dads exhausted, unable to keep up with bills, afraid of losing their homes, and now even unable to fill up the family gas tank for a getaway to visit Grandma and Grandpa. It is sickening to hear the pay packages, bonuses, stock options, whatever, of those at the top. The oil execs were the worst. Outrageous. Thanks for letting me express my opinion.
S. Duffy
{"commentId":1973067,"threadId":"289830","contentId":"1578073","authorDomain":"sld11"}
- 4 votes
#5 - Sun Jun 15, 2008 2:36 PM EDT{"commentId":1973332,"authorDomain":"wonderwoman351"}
Might I ad, contribute to the fact that at the end of the day, parents are unable to, uh, parent, due to exhaustion. Which in turn strains the school system causing unrest in teacher and faculty...vicious cycle...
{"commentId":1973332,"threadId":"289830","contentId":"1578073","authorDomain":"wonderwoman351"}
- 1 vote
{"commentId":1973458,"authorDomain":"kokayi"}
Welcome to Newvine S. Duffy,
For the past thirty years the productivity of American workers has increased by 76 percent. But their real hourly wages have risen less than two percent.
From Bill Moyer's Journal June 13th. A very interesting program.
I've seeded an article which presents some examples of what European are doing to reign in excutive pay, Executive Pay Debate Raging in Europe and the United States
{"commentId":1973458,"threadId":"289830","contentId":"1578073","authorDomain":"kokayi"}
- 3 votes
{"commentId":1973096,"authorDomain":"mpope-1"}
In the telecommunications manufacturing world, its a numbers game, if they come up short on thier metrics, they move jobs off shore and cut employees in North America. Their compensation is the only thing they are looking at. I'm watching happen on a daily basis. When its all over, they (CEO's) will blame everything else regarding the demise of the company they were responsible for. One suggestion is to come down to the trenches and talk with the people and see what is going on. That does not mean an "open forum" type meeting, that means get out there and REALLY see what needs to be done. I doubt they have the guts to do that.
{"commentId":1973096,"threadId":"289830","contentId":"1578073","authorDomain":"mpope-1"}
- 2 votes
#6 - Sun Jun 15, 2008 2:40 PM EDT{"commentId":1973103,"authorDomain":"pikespeak"}
NO ONE is worth these salaries...EVERYONE IS REPLACEABLE! Greed that will be reckoned with someday!
Jim
{"commentId":1973103,"threadId":"289830","contentId":"1578073","authorDomain":"pikespeak"}
- 4 votes
#7 - Sun Jun 15, 2008 2:42 PM EDT{"commentId":1973105,"authorDomain":"wonderwoman351"}
Can someone please explain to me where in the world the CEO frame of thinking comes from? When these suits soak up all of this cash from the general public, what will happen? When those of us who are the scum of the Earth are left unable to uphold our standard of living, who the hell is going to do all the back breaking work for these idiots? Our demise is theirs. I wish that some of these fat heads would really start to pay attention. Their own children are in grave danger because of the things that they are doing. The French revolted against King Henry (I think the VIII, but I am not sure). Why, do you ask....Because he drained everything of value from his people. They were reduced to almost nothing. And guess what, to this day, when the people of France feel as if they are being coaxed by the "Man" to reduce their standard of living, they revolt. Think back like two years when college bound student started riots in south Paris because they wanted to privatize college educations. PS - they have socialized medicine and still have socialized higher education. They have high taxes, but their tax money goes to the programs their gov't tells them it will. Now, I realize that I have dragged the gov't into this discussion, but honestly people, who is running our country today?...
{"commentId":1973105,"threadId":"289830","contentId":"1578073","authorDomain":"wonderwoman351"}
- 3 votes
#8 - Sun Jun 15, 2008 2:42 PM EDT{"commentId":1973139,"authorDomain":"margaretmarti"}
While it's true that big pay equals big incentive, big pay isn't always tied to results (example: General Motors). How many times have we heard about CEOs who are fired because of poor performance yet still walk away with millions? Why should they care if the company does well or not? They're set for life.
By the way, we have laws for a minimum wage. Any possibility there could be laws for a maximum wage?
{"commentId":1973139,"threadId":"289830","contentId":"1578073","authorDomain":"margaretmarti"}
- 1 vote
#9 - Sun Jun 15, 2008 2:47 PM EDT{"commentId":1973704,"authorDomain":"jaybutler"}
GM is an interesting example. The company had signed some union contracts very favorable to the members. The CEO cannot simply close down a plant to bring production in line with product demand. Those 'lost' jobs would have to go into a jobs bank where the workers would continue to draw a large portion of their salaries and their benefits. But, they would not be producing anything.
{"commentId":1973704,"threadId":"289830","contentId":"1578073","authorDomain":"jaybutler"}
- 4 votes
{"commentId":1974397,"authorDomain":"behindmyscreen"}
I think he was more pointing to the fact that GM, and any America auto maker totally missed the need for Hybrid and Electric cars. the foreign makers didn't and are kicking GM, ford, and Chrysler's rear now. Tesla motors will surpass Chrysler in a few years once their $30,000 sedan is released.
America auto makers were not looking beyond next quarter when the rest of the market was looking 10 years down the road.
{"commentId":1974397,"threadId":"289830","contentId":"1578073","authorDomain":"behindmyscreen"}
{"commentId":1973154,"authorDomain":"generalspaz"}
Bullsh*t
{"commentId":1973154,"threadId":"289830","contentId":"1578073","authorDomain":"generalspaz"}
#10 - Sun Jun 15, 2008 2:49 PM EDT{"commentId":1973165,"authorDomain":"jstjr1"}
Having been staff at a well known mgt. consulting firm, I can only say there are only a handful of top managers, the rest, well thats what keeps me employed. I still maintain that everyone in management should get the same base pay. The rest of compensation should be based on performance. If the company loses money then the management should feel the same pain as the shareholders, who by the way, are funding their employment. Every department should be a profit center so a profitable profit center (inspite of a not profitable company) will still get compensation for their proformance. In short, everyone should be held accountable -why would you pay someone who loses your money? I know, you and I would be fired.
{"commentId":1973165,"threadId":"289830","contentId":"1578073","authorDomain":"jstjr1"}
- 2 votes
#11 - Sun Jun 15, 2008 2:51 PM EDT{"commentId":1973168,"authorDomain":"JKLD"}
What I and a lot of other people object to, imho, is CEO pay and benefits even when they run a company into the ground. There is NO justification for tens of millions of $$ to an out-going CEO when they have shattered a company AND its workers. Furthermore, stockholders need to start to seriously take a good long, hard look at pay/compensation packages and demand that they directly be tied to the performance of the company. They have tied worker bonuses to performance for many years now. What about that of the CEO? They tank the company, they get NOTHING! ZERO! After all, if I or someone else failed to perform, would we get $$$$$$$$$$$$$$ for leaving?
Nope. Why not? After all, it's not the one on top who actually does the work, it's the ones on the bottom. Maybe that $$$$$$$$$$$$$$$ that's supposed to go to the CEOs benefit package would be better served going to the people who actually do the work that makes the $$$ for the company to begin with.
{"commentId":1973168,"threadId":"289830","contentId":"1578073","authorDomain":"JKLD"}
- 2 votes
#12 - Sun Jun 15, 2008 2:51 PM EDT{"commentId":1973169,"authorDomain":"Toradze"}
I think it's an indictment of the system of recruitment more than anything else. There are quite a few CEOs who essentially rape their companies. The HP fiasco is a case in point. They are recovering, and the cost of getting rid of Fiorina was well worth it to keep the company alive. But HP would be a much better and more solid company today if she had never appeared. If you tell me that nobody was scratching anybody's back in acquisitions, I have a bridge for you, cheap.
It's a good old boy system. (So women have joined in and become as venal as the worst men - that's a recommendation - not.) It can be seen right now in the "nationwide search" to replace Vanderhoef as chancellor of UC Davis. There are scads of overqualified candidates within UC and within UC Davis. But they are excluded by the incestuous system - even though Vanderhoef himself came from inside, having been cultivated in the old way. There used to be much more sensible cultivation of people from the ranks who showed sense and intelligence. These days that doesn't happen much.
One of the reasons for that is rise of executive search firms. Please don't suggest to me that they don't have an incentive to push the cost per hire as high as the traffic will bear! So they exclude people on that basis in order to make more money for themselves. And please don't tell me that those transactions are entirely clean and free of conflict of interest and kickbacks to key decision makers inside the large firms (many of whom go on to avail themselves of the same services). I have a bridge to sell you too.
Those who sing the praises of outrageous compensation packages might consider listening to what people like Warren Buffet say. http://money.cnn.com/2004/03/06/pf/buffett_letter/index.htm
"[If] Corporate America is serious about reforming itself, CEO pay remains the acid test," Buffett said. "The results aren't encouraging." Buffett criticized lavish pay packages and the "lapdog behavior" of directors, calling the situation an "epidemic of greed." Some of his harshest words were reserved for mutual fund companies. In 2003, "the world began to learn that many fund-management companies had followed policies that hurt the owners of the funds they managed, while simultaneously boosting the fees of the managers," he wrote.
You might also go all the way back to "Up the Organization" by Robert Townsend who picked up Avis Rent-A-Car and made it a player. One of his rules was that all executive compensation must be limited, not just the CEO's compensation. This works because it raises morale in the organization when it is flattened fiscally.
And - study after study shows either no relationship between financial health and CEO compensation or else an inverse relationship. That is the nail in the coffin of this idea that CEOs "deserve" huge pay packages. They don't. This is a cultural matter for the USA, and it is also a legal matter, since to my knowledge, never has the FBI or any major police agency done undercover investigation of the executive search firms.
{"commentId":1973169,"threadId":"289830","contentId":"1578073","authorDomain":"Toradze"}
- 1 vote
#13 - Sun Jun 15, 2008 2:51 PM EDT{"commentId":1973175,"authorDomain":"margaretmarti"}
Big pay may equal big incentive, but often it's not tied to big performance (i.e., General Motors' head). How many times have we seen CEOs walk away with millions even though they've run the company into the ground? Looks bad on their resume, but what do they care; they never have to work another day in their life.
We have a minimum wage law. What are the possibilities of one for a maximum wage?
{"commentId":1973175,"threadId":"289830","contentId":"1578073","authorDomain":"margaretmarti"}
- 1 vote
#14 - Sun Jun 15, 2008 2:52 PM EDT{"commentId":1973187,"authorDomain":"bhansman"}
The sad reality is that the vast majority of CEO(s) have not maximized their companies value; merger and acquisition aside there has been no increased value to American corporations in terms of real sustainable growth.
American corporations have been meeting their shareholder expectation by cutting American jobs. Shipping jobs overseas and cutting benefits to the hourly worker, even in some cases reducing or eliminating earned pension benefits. For this CEO(s) claim the lion share of corporate earnings.
Even allowing for a well run corporation no one is worth the kind of money these CEO(s) are being paid. The argument that by paying less corporations would only attract mediocre CEO(s) is absurd and is generally only rationalized by those waiting in the wings for their own chance the grab the golden ring.
America was once a proud industrial nation that produced everything that Americans consumed. We had a strong middle class that sustain the growth America experienced. All that has changed. Today we produce nothing, the canteens that our soldiers drink out of over in Iraq are made in China, even the flag that we proudly fly in our front yards are made in China. Isn't it about time America corporations began producing something again instead of millionaire CEO(s)?
{"commentId":1973187,"threadId":"289830","contentId":"1578073","authorDomain":"bhansman"}
- 1 vote
#15 - Sun Jun 15, 2008 2:55 PM EDT{"commentId":1973203,"authorDomain":"mcleanw"}
I don't think about CEO pay much, but, it is astounding that in ALL other strong economic countries, Europe, Japan and others, no such pay disparity exist. Their best paid executives make about 10-20 times an average workers pay. In this country 100 times? It cannot be necessary to pay these guys like this. I really don't see many of them actually generating revenue on their own; like a professional athlete does.
{"commentId":1973203,"threadId":"289830","contentId":"1578073","authorDomain":"mcleanw"}
- 2 votes
#16 - Sun Jun 15, 2008 2:57 PM EDT{"commentId":1975353,"authorDomain":"glowingeyesofdeath"}
Actually now its more like 500-600x what the normal working stiff earns.
{"commentId":1975353,"threadId":"289830","contentId":"1578073","authorDomain":"glowingeyesofdeath"}
{"commentId":1973216,"authorDomain":"jkmason1"}
It's interesting that it's always CEOs who are the example of people who are overpaid. I didn't hear anyone complaining when it was reported that the voice of Lisa Simpson on "The Simpsons" would be pulling down 5 Million dollars next year. It's all about the free market.
{"commentId":1973216,"threadId":"289830","contentId":"1578073","authorDomain":"jkmason1"}
#17 - Sun Jun 15, 2008 2:59 PM EDT{"commentId":1973257,"authorDomain":"dguaglardi"}
This country is no better than any other third world dictatorship. We have those who sit comfortably in their palace or whitehouse indifferent to the rest of the country struggling to keep their homes, feed their family, put gas in their cars. Nothing will change until the people of this once great land stand up and say a resounding STOP! We can begin it on Election Day and keep it going by watching closely what the new administration does. When it starts to stray from course, we as a people should step in and see that it doesn't. And I think a really good idea would be to bring to justice all those during the current administration that committed crimes against all of us and there are many. In that way, maybe we can make those who follow think twice about following the same corrupt style.
{"commentId":1973257,"threadId":"289830","contentId":"1578073","authorDomain":"dguaglardi"}
- 2 votes
#18 - Sun Jun 15, 2008 3:06 PM EDT{"commentId":1973286,"authorDomain":"roan"}
Carol, how many third world dictatorships
have you lived in?
{"commentId":1973286,"threadId":"289830","contentId":"1578073","authorDomain":"roan"}
- 2 votes
{"commentId":1973373,"authorDomain":"eriqalan"}
Roan - On newsvine, we do not attack the person (which is childish), you may attack the views / perspective / opinion. Did you have anything in that vein to say?
{"commentId":1973373,"threadId":"289830","contentId":"1578073","authorDomain":"eriqalan"}
- 1 vote
{"commentId":1973410,"authorDomain":"lisag"}
carolg
This country is no better than any other third world dictatorship. We have those who sit comfortably in their palace or whitehouse indifferent to the rest of the country struggling to keep their homes, feed their family, put gas in their cars.
My thoughts exactly. The 1 percent of the wealthy enjoy yachts, private jets, $2 million birthday parties and 25K square-foot houses while the majority of Americans are going further and further into hell. God bless America? Why? For what? Last time I checked, God doesn't bless mammon worship.
{"commentId":1973410,"threadId":"289830","contentId":"1578073","authorDomain":"lisag"}
- 2 votes
{"commentId":1973449,"authorDomain":"kyleb"}
Oh boy, "committed crimes against all of us?" This farce is getting better and better.
{"commentId":1973449,"threadId":"289830","contentId":"1578073","authorDomain":"kyleb"}
- 2 votes
{"commentId":1973521,"authorDomain":"roan"}
Roan - On newsvine, we do not attack the person (which is childish), you may attack the views / perspective / opinion. Did you have anything in that vein to say?
Eriq, when someone makes a claim, asking a question in order to get a bit of context to the claim is not attacking the person.
If anyone thinks that the US is no better than any other third world dictatorship
, I ask that they expand their horizons and travel to one. They will come back enlightened and grateful for what they have.
{"commentId":1973521,"threadId":"289830","contentId":"1578073","authorDomain":"roan"}
- 2 votes
{"commentId":1973259,"authorDomain":"laurahammond"}
I think CEO's in the states should be forced to adopt a reasonable ratio of CEO pay vs average or lowest-paid worker policy.
Thought the report below was interesting:
"Pay Disparity
2004 – Alcoa Inc. (Aluminum Company of America)
WHEREAS:
Commentators note that U.S. CEO compensation is excessive,1 an "occasion of sin" tempting CEO's to undertake self-serving ventures2 that often degrade long-term stock performance.3 Often CEO pay is driven mainly by what other companies pay. As a result, "bosses' pay spirals upward,"4 creating a "Lake Wobegon effect" (where all children have to be above average).5
CEO pay once bore a reasonable relationship to the pay of the average or lowest-paid worker. Now the ratio of CEO pay to average-worker pay has skyrocketed from about 40 in 1980 to several hundred currently.6 The ratio is only 15 to 20 in Japan and Germany today.7 A huge CEO-to-worker pay gap not only degrades worker and therefore company performance but also violates common moral principles of the common good, love of neighbor, and the dignity and worth of every human being. "
{"commentId":1973259,"threadId":"289830","contentId":"1578073","authorDomain":"laurahammond"}
#19 - Sun Jun 15, 2008 3:06 PM EDT{"commentId":1973268,"authorDomain":"dguaglardi"}
This country is no better than any other third world dictatorship. We have those who sit comfortably in their palace or whitehouse indifferent to the rest of the country struggling to keep their homes, feed their family, put gas in their cars. Nothing will change until the people of this once great land stand up and say a resounding STOP! We can begin it on Election Day and keep it going by watching closely what the new administration does. When it starts to stray from course, we as a people should step in and see that it doesn't. And I think a really good idea would be to bring to justice all those during the current administration that committed crimes against all of us and there are many. In that way, maybe we can make those who follow think twice about following the same corrupt style.
{"commentId":1973268,"threadId":"289830","contentId":"1578073","authorDomain":"dguaglardi"}
- 2 votes
#20 - Sun Jun 15, 2008 3:08 PM EDT{"commentId":1973272,"authorDomain":"katmandu2"}
OINK!! OINK!! OINK!!!
How much money does one need anyways ??
I mean come on ???
Most of these old goats die a shortly after they retire and NEVER get to use any of it ?
How about better care of your workers ?
I've often wondered about the Walton family. Here's a suggestion to them. It each one of them (top 4 each worth $15 BILLION with a "B"), each gave a measly 250 Million (1/4 Billion) into a Walmart Employee Healthcare plan.
They would be seen in the eyes of the world as TRUE HEROS and REAL Philanthropist !!
Instead, the choose to sit by and count there combined (60) BILLION with a "B" at family reunions!
I hope they all choke on the piggishness. DISGUSTING GREED !!
{"commentId":1973272,"threadId":"289830","contentId":"1578073","authorDomain":"katmandu2"}
- 2 votes
#21 - Sun Jun 15, 2008 3:08 PM EDT{"commentId":1973274,"authorDomain":"jconlon"}
It is immoral to pay such ridiculous salaries to people who destroy companies and stockholder's investments. They should be fired without pay, rather than "rewarded"!!!!!
{"commentId":1973274,"threadId":"289830","contentId":"1578073","authorDomain":"jconlon"}
#22 - Sun Jun 15, 2008 3:09 PM EDT{"commentId":1973279,"authorDomain":"Wrldtrvlr"}
Simply, we need a civil war.. a good civil war because there is no fairness.
{"commentId":1973279,"threadId":"289830","contentId":"1578073","authorDomain":"Wrldtrvlr"}
- 1 vote
#23 - Sun Jun 15, 2008 3:10 PM EDT{"commentId":1973294,"authorDomain":"roan"}
Simply, you have no idea what you are asking for. No idea whatsoever.
{"commentId":1973294,"threadId":"289830","contentId":"1578073","authorDomain":"roan"}
- 2 votes
{"commentId":1982564,"authorDomain":"getahome"}
The republicans would win! lol
{"commentId":1982564,"threadId":"289830","contentId":"1578073","authorDomain":"getahome"}
{"commentId":1973284,"authorDomain":"jjconstan"}
When you realize just how little CEO's know about the systems they are expected to "manage", you can guess why they are clueless as to their part in the overall scheme of things. They are of the Jack Welch school - reward the top ten %, punish (fire) the bottom ten %. Eventually, though, there will nonethess always be a "top" and a "bottom".
Enron had many MBA's, many grads of "top" educational institutions, yet it did not prevent them from dying a quick death, including that of their CEO and founder, himself a Ph.D.
There's an old adage that remains relevant today - export any US products, with the exception of American style management. For good reason.
{"commentId":1973284,"threadId":"289830","contentId":"1578073","authorDomain":"jjconstan"}
- 2 votes
#24 - Sun Jun 15, 2008 3:12 PM EDT{"commentId":1973306,"authorDomain":"morikawarandim"}
plain and simple..
A lot of these people are influenced by money, power, and also greed.
follow the money, and follow the itty-bitty ant trail, leading up to the great big ant's nest full of people raking in the money..
They almost always pay, "Me, first"...or pay themselves first, and dont give a hoot who is on the bottom, just trying to feed their kids, put a roof over their head, a warm bed to sleep...survive.
unfortunately, that is how it works, I guess..
the big money, isnt the pay that they claim on their taxes either,
you have the "bonuses", "perks", and "others" which they also have.
Like for instance, vacation homes in the pacific, for "meetings"....they spend 15 minutes in a meeting, and take a week of vacation time, with their familys, in the bahamas, or hawaii..all claimed as business meetings..or they can go golfing too, and claim that as an business expense. It can be done, and is a sneaky way of doing business also. Sometimes they can leave their wives at home, and go themselves on these trips too.
These are just a few things to think about...
{"commentId":1973306,"threadId":"289830","contentId":"1578073","authorDomain":"morikawarandim"}
- 2 votes
#25 - Sun Jun 15, 2008 3:15 PM EDT{"commentId":1973323,"authorDomain":"JoulesBeef"}
They also tend to be less ethical than the rest of us.. as there are many legal ways of doing things that none of us would do as they are unethical, and that is how these guys scratch there way to the top.
companies make more money when they are willing to lay off workers, cut benefits, buy out the competition and close them down.
{"commentId":1973323,"threadId":"289830","contentId":"1578073","authorDomain":"JoulesBeef"}
- 2 votes
{"commentId":1973364,"authorDomain":"prompt"}
They also tend to be less ethical than the rest of us
I think those suggesting the theft of money from those who earn more are less ethical. Sure, there are extremely dirty businessman out there that exploited their positions, but to go after "the rich" is just wrong.
{"commentId":1973364,"threadId":"289830","contentId":"1578073","authorDomain":"prompt"}
- 3 votes
{"canLink":false,"threadId":"289830","isPrivate":false}
You're in Easy Mode. If you prefer, you can use XHTML Mode instead. |
As a new user, you may notice a few temporary content restrictions. Click here for more info.
Start Tracking
Stop TrackingCOMPANY STUFF:
LEGAL STUFF:
- © 2005-2009 Newsvine, Inc. |
- Newsvine® is a registered trademark of Newsvine, Inc. |
- Newsvine is a property of
