Can wild CEO Pay Be Tamed? Probably Not

[eflatminor]

You in your non union job have no negotiating power. There is the door if you don't like it.

Actually, if I do a really good job, I am in a very powerful position to negotiate that which interests me (higher compensation, more personal time, enhanced benefit, more or different responsibility...whatever) because my employer values my contribution and understands the costs and uncertainty factor involved in hiring and training a replacement employee.

Regarding the door, that is the ONLY way I'd have it. If I want to take my talent, effort and hard work elsewhere, I do not want anything in the way of making such a transition. Again, my employer needs to know that if I'm not satisfactorily compensated, I will walk. If they know that my walking will be burdensome for me, I lose some of that negotiating power. Having the door at my disposal is powerful.

 

[Quantum Windbag]

Lehman Bros.’ Richard Fuld, $40 million.
Merrill Lynch’s Stanley O’Neal, $46 million.
Bear Stearns' James Cayne, $40 million.
Freddie Mac’s Richard Syron, just shy of $20 million.
Fannie Mae’s Daniel Mudd, $12.2 million.

As the nation’s financial system was crumbling, the CEOs who were in charge of the most troubled financial firms pocketed fat paychecks during their final full year on the job — and that doesn’t include the golden parachutes they got when they walked away.
Public outrage over this disconnect has caused Congress to step in and try to do something about skyrocketing executive compensation. But history shows that government attempts have been weak, at best, when it comes to curtailing CEO riches.
Why? Because regulators never go far enough in giving shareholders a true voice. It’s difficult to break up entrenched boards of directors that make the decisions on executive compensation.
Even the $700 billion bailout package that is fighting for life on Capitol Hill doesn’t have the teeth to put a lid on these financial windfalls, experts say.
Over the past two decades, efforts by government officials to rein in the big payouts, including changes to the tax code and calls for more oversight, have actually contributed to the growth in CEO pay — now 275 times the salary of the average working stiff, according to the Economic Policy Institute.
“Government regulators are notoriously ineffective at reining in pay, and oftentimes the unintended consequences caused greater problems,” says Charles Elson, an expert on corporate governance at the University of Delaware.
Let’s go back to the mid-1980s when the public also was outraged about executives getting huge payouts as a result of the merger mania at the time. The government and investors wanted to make sure managers were selling companies because it was financially prudent, not because they would walk away with huge severance packages.
These concerns resulted in a 1986 change in the tax code creating a penalty tax on excessive golden parachute payments more than three times an executive's base pay.
What happened after that, says Steve Van Putten, a senior executive pay consultant for Watson Wyatt in Boston, was that companies started paying this penalty tax for executives, a process called grossing up. And the three-times base pay limit became the standard for many parachutes that were once well below that.
In 1992, the Securities and Exchange Commission introduced proxy disclosure rules taking information about executive compensation that was once narrative and thin on numerical values, and putting actual numbers out there for all to see.
“It became very transparent, and a CEO at one company could see what another was making so they’d say, ‘Hey, I want to be making that,’ ” says Van Putten.
The big change — one that many compensation experts and shareholder advocates point to as a turning point that led to the obscene CEO paychecks we’re dealing with today — came in 1993 with tax code provision 162(m) that limited tax deductibility for executive pay at $1 million. The exception to the rule was for pay that was considered “performance-based” compensation, like, you guessed it, stock options.
“As a result, stock options have gone crazy,” says Mel Fugate, assistant management professor at the Cox School of Business at Southern Methodist University. Under the rule, for example, a CEO could get $1 million in base pay and $400 million in stock options.
This focus on stock options created a volatile mix, boosting incentives for executives to make risky business moves in order to boost a company’s stock price.
That’s exactly what has happened with the subprime mess that led to the downfall of so many old and established Wall Street firms.
“Certainly, compensation practices at these companies have been a major contributor to the financial crisis,” says Paul Hodgson, a senior analyst at the Corporate Library, an independent governance research organization.
Alas, government intervention thus far has been “an unmitigated disaster,” adds Alan Johnson, a compensation consultant. “I would think if you went back 20 years or so, you’d see it’s enriched consultants like me, lawyers, accountants. It was wasted time and money and didn’t reduce pay. It was so poorly designed, so full of loopholes, and so silly.”
So, what needs to be done to finally clamp down on CEO pay and incentives that encourage short-term gains, but do little for the long-term health of the nation’s corporations?

Can wild CEO pay be tamed? Probably not - Economy in Turmoil - MSNBC.com

Wild?

Is it running around the streets attacking people?

 

[Quantum Windbag]

Today. 4 years later, the number is 380 times the average worker. At what point will middle class Republicans wake up and be outraged at this instead of hating on the factory worker that use to make $35 hr? Jealous? Don't realize those high paying union jobs brought up all of our wages? Don't see this gap between rich and poor as being a problem? Wake up!

Do you have a problem with the pay that Hollywood celebrities make for acting in just one movie?

Tom Cruise $30 million
Matt Damon $29 million
Brad Pitt $20 million
Leonardo di Caprio $20 million

The list goes on

Highest Paid Actors in Hollywood | BOQ Film

They are in unions idiot! Employees making a lot. You think I have a problem with that? Screen Actors Guild. Thank a union!

But I bet you did have a problem with NBA players making too much, right?

See, in a union, the CEO wouldn't make as much because the employees would get profit sharing. It wouldn't be "passed on to the consumer" either. That's just a lie they tell you.

Actually, if it were up to the union, those guys wouldn't be making that kind of money. Most union contracts not only have minimum pay, they have pay caps.

Ever here of the NFL salary cap? Union.
NBA salary cap? Union.

Guess who else doesn't have a salary cap? MLB. Ever wonder why? Or why, exactly, the SAG doesn't have a salary cap, despite being unions?

 

[Widdekind]

According to "the market", US CEO pay has sky-rocketed since the 1970s

According to "economic accounting", US manufacturing has decayed (as a fraction of world total) during the same period:

as our economy shifts, away from industry, to service-leisure-healthcare-Government

prima facie, (overall) US "market forces" do not value industry; do value service-leisure-healthcare-Government

 

[CrusaderFrank]

Moral of the story: try not to be average your whole life

 

[Widdekind]

prima facie, US "market forces" hire CEOs, who "optimize" US corporations, more for "Price-to-Earnings Ratios" (to benefit speculating stock holders); less for (heavy) industrial leadership & capacity

 

[Flopper]

Today. 4 years later, the number is 380 times the average worker. At what point will middle class Republicans wake up and be outraged at this instead of hating on the factory worker that use to make $35 hr? Jealous? Don't realize those high paying union jobs brought up all of our wages? Don't see this gap between rich and poor as being a problem? Wake up!

Do you have a problem with the pay that Hollywood celebrities make for acting in just one movie?

Tom Cruise $30 million
Matt Damon $29 million
Brad Pitt $20 million
Leonardo di Caprio $20 million

The list goes on

Highest Paid Actors in Hollywood | BOQ Film

At least they produce something that America wants. Something I can't say for:

Lehman Bros.’ Richard Fuld, $40 million.
Merrill Lynch’s Stanley O’Neal, $46 million.
Bear Stearns' James Cayne, $40 million.

 

[Dont Taz Me Bro]

Today. 4 years later, the number is 380 times the average worker. At what point will middle class Republicans wake up and be outraged at this instead of hating on the factory worker that use to make $35 hr? Jealous? Don't realize those high paying union jobs brought up all of our wages? Don't see this gap between rich and poor as being a problem? Wake up!

Do you have a problem with the pay that Hollywood celebrities make for acting in just one movie?

Tom Cruise $30 million
Matt Damon $29 million
Brad Pitt $20 million
Leonardo di Caprio $20 million

The list goes on

Highest Paid Actors in Hollywood | BOQ Film

At least they produce something that America wants. Something I can't say for:

Lehman Bros.’ Richard Fuld, $40 million.
Merrill Lynch’s Stanley O’Neal, $46 million.
Bear Stearns' James Cayne, $40 million.

So do CEO's, otherwise they'd have no company to be CEO of. Corporations don't exist simply for the sake of existing. How many jobs does Tom Cruise create when he stars in a movie? Perhaps a couple hundred temporary ones. On the other hand, the CEO of my company oversees close to 60,000 full time employees around the world and he doesn't make nearly as much as Tom Cruise does.

 

[sealybobo]

Do you have a problem with the pay that Hollywood celebrities make for acting in just one movie?

Tom Cruise $30 million
Matt Damon $29 million
Brad Pitt $20 million
Leonardo di Caprio $20 million

The list goes on

Highest Paid Actors in Hollywood | BOQ Film

They are in unions idiot! Employees making a lot. You think I have a problem with that? Screen Actors Guild. Thank a union!

But I bet you did have a problem with NBA players making too much, right?

See, in a union, the CEO wouldn't make as much because the employees would get profit sharing. It wouldn't be "passed on to the consumer" either. That's just a lie they tell you.

Actually, if it were up to the union, those guys wouldn't be making that kind of money. Most union contracts not only have minimum pay, they have pay caps.

Ever here of the NFL salary cap? Union.
NBA salary cap? Union.

Guess who else doesn't have a salary cap? MLB. Ever wonder why? Or why, exactly, the SAG doesn't have a salary cap, despite being unions?

Ever notice how many latin Americans are in baseball today? That's because that is where they farm for players. They come a lot cheaper than Americans were getting for getting drafted in the first or second round. Some Americans were getting million dollar contracts. But in South America they dome dirt cheap. They put them in dorms 20 guys in a room. These guys are just glad to be not in the fields picking fruit. So if they end up being great like A Rod, they want to win so they pay what they know they have to pay or lose them to the Yankees.

 

[sealybobo]

Do you have a problem with the pay that Hollywood celebrities make for acting in just one movie?

Tom Cruise $30 million
Matt Damon $29 million
Brad Pitt $20 million
Leonardo di Caprio $20 million

The list goes on

Highest Paid Actors in Hollywood | BOQ Film

At least they produce something that America wants. Something I can't say for:

Lehman Bros.’ Richard Fuld, $40 million.
Merrill Lynch’s Stanley O’Neal, $46 million.
Bear Stearns' James Cayne, $40 million.

So do CEO's, otherwise they'd have no company to be CEO of. Corporations don't exist simply for the sake of existing. How many jobs does Tom Cruise create when he stars in a movie? Perhaps a couple hundred temporary ones. On the other hand, the CEO of my company oversees close to 60,000 full time employees around the world and he doesn't make nearly as much as Tom Cruise does.

I showed you that 5 years ago it was 200 times more than the average employee and now its 320 times. But the average worker hasn't gotten a raise in 30 years.

At what point will you agree that maybe the workers should get a raise? Just curious.

 

[The Rabbi]

At least they produce something that America wants. Something I can't say for:

Lehman Bros.’ Richard Fuld, $40 million.
Merrill Lynch’s Stanley O’Neal, $46 million.
Bear Stearns' James Cayne, $40 million.

So do CEO's, otherwise they'd have no company to be CEO of. Corporations don't exist simply for the sake of existing. How many jobs does Tom Cruise create when he stars in a movie? Perhaps a couple hundred temporary ones. On the other hand, the CEO of my company oversees close to 60,000 full time employees around the world and he doesn't make nearly as much as Tom Cruise does.

I showed you that 5 years ago it was 200 times more than the average employee and now its 320 times. But the average worker hasn't gotten a raise in 30 years.

At what point will you agree that maybe the workers should get a raise? Just curious.

Do you set wages in this country? Does Don't Taz Me Bro? Then why is it your business who gets a raise or not?
Why should they get raises?

 

[sealybobo]

So do CEO's, otherwise they'd have no company to be CEO of. Corporations don't exist simply for the sake of existing. How many jobs does Tom Cruise create when he stars in a movie? Perhaps a couple hundred temporary ones. On the other hand, the CEO of my company oversees close to 60,000 full time employees around the world and he doesn't make nearly as much as Tom Cruise does.

I showed you that 5 years ago it was 200 times more than the average employee and now its 320 times. But the average worker hasn't gotten a raise in 30 years.

At what point will you agree that maybe the workers should get a raise? Just curious.

Do you set wages in this country? Does Don't Taz Me Bro? Then why is it your business who gets a raise or not?
Why should they get raises?

Ok, so the cost of living goes up and inflation occurs and for 30 years, you don't get a raise. But you see the profits are up and the CEO's psy has gone up in the last 5 years from 200 times what I make to 320 times what I make.

Am I in a union? Because if I'm in a union, through collective bargaining we would all get cost of living increases at least. And probably profit sharing.

If I'm not in a union, I don't say a word. I just keep working harder for less. This is what people are doing. Have you seen the numbers? Republicans have been flashing these facts and blaming them on Obama, so I know you understand wages are down. You just don't want to take responsibility.

You wanted low paying jobs. You cried that people were making $35 hr but now complain that the jobs came back at $10.

This is why I think we need to have a rebirth of the unions. Teachers, police, auto workers and firefighters and other government employees are under attack. The rich politicians are cutting their pay and giving it to the rich and the corporations.

You know what? I'm wasting my breath so I'm going to stop. It would take a book to explain to you why you are wrong. Based on your question, I'm wasting my time. Next.

 

[sealybobo]

I started a company 10 years ago and hired some workers for $30K each and I hit it big. I should say we but I'm a Republican so I think I did it all myself. Anyways, the first year my take home was $100K. The next year it was $200K. The 3rd year it was $300K and it went up another $100K every year after that for 10 years in a row. I make $1 million dollars a year.

But I never gave those employees raise. Fuck em. I could hire other people for $30K. Why should I have given them a raise. They didn't take any risk. I did. Me, me, me.

 

[Flopper]

Do you have a problem with the pay that Hollywood celebrities make for acting in just one movie?

Tom Cruise $30 million
Matt Damon $29 million
Brad Pitt $20 million
Leonardo di Caprio $20 million

The list goes on

Highest Paid Actors in Hollywood | BOQ Film

They are in unions idiot! Employees making a lot. You think I have a problem with that? Screen Actors Guild. Thank a union!

But I bet you did have a problem with NBA players making too much, right?

See, in a union, the CEO wouldn't make as much because the employees would get profit sharing. It wouldn't be "passed on to the consumer" either. That's just a lie they tell you.

In a free market, incomes and wealth are obtained through the sum of innumerable voluntary exchanges. As Robert Nozick calls it, “capitalist acts between consenting adults.”

a. Nozick’s example: ““Now suppose that Wilt Chamberlain is greatly in demand by basketball teams, being a great gate attraction…He signs the following sort of contract with a team: In each home game, twenty-five cents from the price of each ticket of admission goes to him…The season starts, and people cheerfully attend his team’s games; they buy their tickets, each time dropping a separate twenty-five cents of their admission price into a special box with Chamberlain’s name on it. They are excited about seeing him play; it is worth the total admission price to them. Let us suppose that in one season one million persons attend his home games, and Wilt Chamberlain winds up with $250,000, a much larger sum than the average income and larger even than anyone else has. Is he entitled to this income? Is this new distribution unjust?”

b. So, then, what should a government do as far as mandating ‘fairness”? “The exercise of state power is not the action of a separate entity with moral rights greater than those of individual persons, rights to use force against persons for reasons that would not justify the use of force by individuals or groups of individuals per se…individual rights and duties are the basis of what governments may and should do.” Thomas Nagel, “Other Minds: Critical Essays, 1969-1994,” p. 141.

Government's place in redistribution of wealth should be limited. That's not to say government should never do anything to encourage some redistribution. A situation in which either all capital is in the hands of the few or is equally distributed is certainly not beneficial to society. If capitalism is properly regulated, then neither extreme will occur.

 

[Wiseacre]

I just don't understand it - why do you liberals worry about what some dipweed CEO makes instead of how to improve the lot in life for the bottom income earners? The Buffet Rule only gets you 4-5 billion a year in more taxes, you can't possibly help that many people with that little amount of money. And yet all you do is whine about a few greedy assholes, who BTW got rich because politicians on both sides of the aisle set the rules. When are you gonna understand that changing the tax code is not the solution to the problem, AND that doubling the capital gains tax could very well hurt the very people you want to help the most.

 

[boedicca]

Lehman Bros.’ Richard Fuld, $40 million.
Merrill Lynch’s Stanley O’Neal, $46 million.
Bear Stearns' James Cayne, $40 million.
Freddie Mac’s Richard Syron, just shy of $20 million.
Fannie Mae’s Daniel Mudd, $12.2 million.

CEO pay — now 275 times the salary of the average working stiff, according to the Economic Policy Institute.
Can wild CEO pay be tamed? Probably not - Economy in Turmoil - MSNBC.com

Average Fortune 500 CEO Now Paid 380 Times As Much As The Average Worker | ThinkProgress

Today. 4 years later, the number is 380 times the average worker. At what point will middle class Republicans wake up and be outraged at this instead of hating on the factory worker that use to make $35 hr? Jealous? Don't realize those high paying union jobs brought up all of our wages? Don't see this gap between rich and poor as being a problem? Wake up!

blah blah blah

Jealous much?

 

[Quantum Windbag]

They are in unions idiot! Employees making a lot. You think I have a problem with that? Screen Actors Guild. Thank a union!

But I bet you did have a problem with NBA players making too much, right?

See, in a union, the CEO wouldn't make as much because the employees would get profit sharing. It wouldn't be "passed on to the consumer" either. That's just a lie they tell you.

Actually, if it were up to the union, those guys wouldn't be making that kind of money. Most union contracts not only have minimum pay, they have pay caps.

Ever here of the NFL salary cap? Union.
NBA salary cap? Union.

Guess who else doesn't have a salary cap? MLB. Ever wonder why? Or why, exactly, the SAG doesn't have a salary cap, despite being unions?

Ever notice how many latin Americans are in baseball today? That's because that is where they farm for players. They come a lot cheaper than Americans were getting for getting drafted in the first or second round. Some Americans were getting million dollar contracts. But in South America they dome dirt cheap. They put them in dorms 20 guys in a room. These guys are just glad to be not in the fields picking fruit. So if they end up being great like A Rod, they want to win so they pay what they know they have to pay or lose them to the Yankees.

Wow, you are even dumber than I thought.

 

[AnonymousIV]

The CEO's are literally skimming profits first. Does his leadership or the average worker's trade create the profit? I think that is the question, not spending on poverty. I mean can't CEO's see they need to be more ingratiating? Will there pay continue to skyrocket? Somewhere these guys need to come back to reality. I mean there is compensation for intelligence, sure, and leadership sure. But, they are over the top. And I vote to the right.

Wiseacre sometimes pride

 

[alan1]

You in your non union job have no negotiating power. There is the door if you don't like it.

Actually, if I do a really good job, I am in a very powerful position to negotiate that which interests me (higher compensation, more personal time, enhanced benefit, more or different responsibility...whatever) because my employer values my contribution and understands the costs and uncertainty factor involved in hiring and training a replacement employee.

Regarding the door, that is the ONLY way I'd have it. If I want to take my talent, effort and hard work elsewhere, I do not want anything in the way of making such a transition. Again, my employer needs to know that if I'm not satisfactorily compensated, I will walk. If they know that my walking will be burdensome for me, I lose some of that negotiating power. Having the door at my disposal is powerful.

You have given out too much Reputation in the last 24 hours, try again later.

I pity the fools that need a union or some other such nonsense that determine their market value.

 

[alan1]

I showed you that 5 years ago it was 200 times more than the average employee and now its 320 times. But the average worker hasn't gotten a raise in 30 years.

At what point will you agree that maybe the workers should get a raise? Just curious.

My advice to you,
Don't be an average worker.