CEO Pay Often Not Linked to Performance

[Toro]

Perfect free market solution:

If you feel a company's board is incompetent and does not deserve your money, do not invest in them or support them with your business.

See? Not so hard now is it?

You can make that argument about many things. For example, if the housewife doesn't like to get beaten, she should just leave. If blacks didn't like living in the South during Segregation, they should have just moved north. If it's a union shop and you don't like working for a union, you shouldn't work there. If a law is abusive or egregious or just bad, it should be changed, not tell the recipients to leave or shut up and take it. And corporate governance laws in America right now are poor.

What about individuals who can't sell their shares? By law, many pension funds have to invest in companies in the stock market. What about them?

Corporations are supposed to be run for the shareholders, not for the management. The owners' interests should be subservient to those who get paid by the shareholders, not the other way around. If not, why not extend that right down the pay ladder? How about corporations be run for all the workers, not just the executives? Why shouldn't shareholders' interests be subservient to both management AND the union?

 

[uscitizen]

as a stock holder, I feel this practice hurts me and I believe it should stop!

You bought stock that hurts. You say you 'believe' it should stop but you're not even thinking of, oh I don't know --maybe SELLING your stock? Sounds like one of those kinky setups where 'stop' means 'don't stop'.

You know you don't have to pay for it, lots of places you can get it free...

Actually, it sounds more like yourself. It doesn't matter how badly management is raping shareholders, shareholders should just STFU bitch and take it!

Corporate governance in America sucks. It's rife with cronyism and often devoid of personal responsibility. I thought conservatives and libertarians were all for personal responsibility? Apparently, for thee but not for me!

It's more than a little ironic that the best corporate governance in the world, where shareholders have the best rights and most control, is a place often derided by the American Right - Scandinavia. There, shareholders control the board, the nomination and compensation committees are appointed by shareholders, and there is only one insider on the board. If you do fine, great, you keep your job. If you suck, you're out. But in corporate America, shareholders have little voice. If you've stacked the board with friends and cronies, you can have such lousy performance, it would make a union highway worker blush, but at 400x the pay.

And yet many thing we need to deregulate these corporations and their ex CEO's should become president and occupy other key positions in our government?

 

[B. Kidd]

as a stock holder, I feel this practice hurts me and I believe it should stop!

You bought stock that hurts. You say you 'believe' it should stop but you're not even thinking of, oh I don't know --maybe SELLING your stock? Sounds like one of those kinky setups where 'stop' means 'don't stop'.

You know you don't have to pay for it, lots of places you can get it free...

my my...quick to snap, eh?

all shareholders are being hurt dear, not just me and my stocks....the set up is unjust, and needs to change....

*we all would be better off if this cronyism was not inplace....to me, it would lead to a more sound market....

A healthy level of trust must continue to exist in order for capitalism to succeed. It does not, and as a result, looks like capitalism is eventually gonna fail.

 

[uscitizen]

You bought stock that hurts. You say you 'believe' it should stop but you're not even thinking of, oh I don't know --maybe SELLING your stock? Sounds like one of those kinky setups where 'stop' means 'don't stop'.

You know you don't have to pay for it, lots of places you can get it free...

my my...quick to snap, eh?

all shareholders are being hurt dear, not just me and my stocks....the set up is unjust, and needs to change....

*we all would be better off if this cronyism was not inplace....to me, it would lead to a more sound market....

A healthy level of trust must continue to exist in order for capitalism to succeed. It does not, and as a result, looks like capitalism is eventually gonna fail.

Seems kinda like Capitalism is failing america right now.

 

[signelect]

In 2001 my company was losing sales and profit, stock was on the way from 33 to 3 when I was laid off. The train driver bailed out for 200million. He was on the board of the company presidents that sat on his board. CEO should get a minium wage and make the big bucks on performance. No performance no money. During the early days of Obama Wall Street paid big bonuses they said to keep employees. The same empolyees was losing them money, why would you want to keep them.

 

[Toro]

In 2001 my company was losing sales and profit, stock was on the way from 33 to 3 when I was laid off. The train driver bailed out for 200million. He was on the board of the company presidents that sat on his board. CEO should get a minium wage and make the big bucks on performance. No performance no money. During the early days of Obama Wall Street paid big bonuses they said to keep employees. The same empolyees was losing them money, why would you want to keep them.

That seems a little extreme.

I don't mind paying guys lots of money, but it drives me nuts that people get paid for shit performance and the laws make it difficult for shareholders to do anything about it.

 

[Dot Com]

CEO pay soars while workers' pay stalls

At a time most employees can barely remember their last substantial raise, median CEO pay jumped 27% in 2010 as the executives’ compensation started working its way back to prerecession levels, a USA TODAY analysis of data from GovernanceMetrics International found.

 

[expat_panama]

as a stock holder, I feel this practice hurts me and I believe it should stop!

You bought stock that hurts. You say you 'believe' it should stop but you're not even thinking of, oh I don't know --maybe SELLING your stock? Sounds like one of those kinky setups where 'stop' means 'don't stop'...

...doesn't matter how badly management is raping shareholders, shareholders should just STFU bitch and take it! Corporate governance in America sucks...

That may be true in other places--

--but in the USA on the planet earth corporate governance is whatever the majority of the stockholders says it is, and any minority stockholder that doesn't like it can either sell or deal with it.

I mean, you think someone might like, BEAT UP the shareholders' with clubs or something? OK, Obama's Jimmy Hoffa maybe but if share holders want to sell and stop being shareholders it's a free county. Still.

 

[Toro]

You bought stock that hurts. You say you 'believe' it should stop but you're not even thinking of, oh I don't know --maybe SELLING your stock? Sounds like one of those kinky setups where 'stop' means 'don't stop'...

...doesn't matter how badly management is raping shareholders, shareholders should just STFU bitch and take it! Corporate governance in America sucks...

That may be true in other places--

--but in the USA on the planet earth corporate governance is whatever the majority of the stockholders says it is, and any minority stockholder that doesn't like it can either sell or deal with it.

I mean, you think someone might like, BEAT UP the shareholders' with clubs or something? OK, Obama's Jimmy Hoffa maybe but if share holders want to sell and stop being shareholders it's a free county. Still.

lol

It is you who is on another planet, bub.

 

[Wiseacre]

How does one legally limit the CEO pay if the stockholders do not object? You could require companies above a certain profit threshold to distribute information concerning the salaries the top management execs relative to their industry and require a majority approval of compensation packages. But if they approve it, so be it.

For private companies, it should be whatever they can earn subject to the law of course. I haven't seen dara for private vs public CEOs, but I'm guessing the private ones are far less profitable and top management is not as highly compensated. But whatever they can pay themselves and still stay in business is on them.

In either case, the gov't has no business intervening, outside of ensuring no illegalities or unfair business practices are in play. If the information is diseminated and is accurate, thent he gov't has no further right to interfere.

Government should NOT be limiting pay. But the problem is that shareholders have little say in how corporations are run. Take a look at the Board of Directors almost any company in the Fortune 500, and you will be hard pressed to find two, or even one, major shareholder on the board. And that's because of how corporations are structured in America.

Most directors mean well and want to do the best, but they are rife with conflicts.

A simple one - why is the Chairman of the Board not always a separate position from the CEO? That, in itself, is a serious conflict. Why aren't nomination committees and compensation committees at the very least populated exclusively by independent directors? In Sweden, the four largest shareholders are part of the nomination committee. Here in America, the nomination committee often has insiders and loyalists to the CEO, making it more likely that independent directors will not be on the committee.

People often make the assumption that the interests of corporate America and management are the same. They often are not. Managements' first loyalty is to itself, not to shareholders or anyone else. Managements often want to do their best, but when their interests cross with shareholders, it is very difficult for shareholders to do anything about it. That should change.



Re: The solution is to give shareholders more rights. Shareholders should have a much greater say on how their money is spent by those who often have differing incentives than they.

Fine by me. All I want is for the shareholders to have accurate information about the compensation packages for the top execs and how it compares to the industry they're in. Assuming they also have enough information about the company's performance, whatever is approved by a majority vote oughta be the result.

 

[Trajan]

as a stock holder, I feel this practice hurts me and I believe it should stop!

exercise your proxy.

 

[Trajan]

Reload this Page CEO Pay Often Not Linked to Performance

Yeah....And?

During my brief foray into working in the corporate world, almost nobody's pay was based upon performance...In fact, if you performed too well and acted like you gave a shit, you'd usually run afoul of middle management types who had become fat, lazy and complacent in the corporate bureaucracy.

So what else is new?

try a public sector union. "Tomorrow" is the fashionable all encompassing word, we'll do ti tomorrow....

 

[expat_panama]

...all shareholders are being hurt dear, not just me and my stocks....the set up is unjust, and needs to change...

Before serious investors put money into a company, they check the management. If management changes for the worse later, they take their money out. Anyone who puts money into a poorly run company, or keeps their money in while management goes bad, is deliberately choosing to reward malfeasance. It's like voting for Obama.

Wait a second, all these 'victims of the system' here are all Obama fans. Now it makes sense.

 

[expat_panama]

...all shareholders are being hurt dear, not just me and my stocks....the set up is unjust, and needs to change...

A healthy level of trust must continue to exist in order for capitalism to succeed. It does not, and as a result, looks like capitalism is eventually gonna fail.

That's backwards. When a share holder finds out that management has failed then that's the time to STOP trusting. People who work in a free market need to count their change and read their contracts. What needs to continue (or start) here is a sense of personal responsibility for one's actions.

It's true in the market, it's true in a marriage, and it's true in the voting booth.

 

[Toro]

...all shareholders are being hurt dear, not just me and my stocks....the set up is unjust, and needs to change...

Before serious investors put money into a company, they check the management. If management changes for the worse later, they take their money out. Anyone who puts money into a poorly run company, or keeps their money in while management goes bad, is deliberately choosing to reward malfeasance. It's like voting for Obama.

Wait a second, all these 'victims of the system' here are all Obama fans. Now it makes sense.

Hey, I can play that nonsense game too. "Supporting a system that entrenches shitty management is like voting for conservative Republicans. As long as I get mine, screw everyone else. It all makes sense now."

There are many reasons why "serious investors" invest in a stock. Management is just one reason. Often, investors will invest because the assets are good even if management is poor, or because the stock is cheap even if the management is poor, or if there is a catalyst even if management is poor, or any number of reasons. But even if the buyers aren't "serious investors," so what? That shouldn't give management carte blanche to run roughshod over the owners' of the company.

But you're reasoning, again, totally misses the point. If management is bad "you should just sell the stock." To whom? Someone has to buy it. There is always a market for stock. As long as there is a system that entrenches bad management, there will always be shareholders. Always.

You know, I'd have thought the Right would be all for personal responsibility and standards, but I guess not. I guess it is situational. There are lots of well run companies in America piloted by managements doing the right thing, but there are lots of bad managements and bad boards as well. We should make it easier to get rid of bad managements and make them more responsible to the owners, not offer lame rationalizations and try to cast blame and aspersion on the owners of companies because they "didn't sell the stock."

 

[uscitizen]

Voting shares? Non voting shares? Premium stock, etc....

 

[Toro]

...all shareholders are being hurt dear, not just me and my stocks....the set up is unjust, and needs to change...

A healthy level of trust must continue to exist in order for capitalism to succeed. It does not, and as a result, looks like capitalism is eventually gonna fail.

That's backwards. When a share holder finds out that management has failed then that's the time to STOP trusting. People who work in a free market need to count their change and read their contracts. What needs to continue (or start) here is a sense of personal responsibility for one's actions.

It's true in the market, it's true in a marriage, and it's true in the voting booth.

Except that the personal responsibility shouldn't be applied at the executive level. Gotcha.

Outstanding.

 

[Big Fitz]

Perfect free market solution:

If you feel a company's board is incompetent and does not deserve your money, do not invest in them or support them with your business.

See? Not so hard now is it?

You can make that argument about many things. For example, if the housewife doesn't like to get beaten, she should just leave. If blacks didn't like living in the South during Segregation, they should have just moved north. If it's a union shop and you don't like working for a union, you shouldn't work there. If a law is abusive or egregious or just bad, it should be changed, not tell the recipients to leave or shut up and take it. And corporate governance laws in America right now are poor.

What about individuals who can't sell their shares? By law, many pension funds have to invest in companies in the stock market. What about them?

Corporations are supposed to be run for the shareholders, not for the management. The owners' interests should be subservient to those who get paid by the shareholders, not the other way around. If not, why not extend that right down the pay ladder? How about corporations be run for all the workers, not just the executives? Why shouldn't shareholders' interests be subservient to both management AND the union?

Every choice has it's consequences. Even choosing to do nothing is a choice. Not all choices are equal, but they ARE choices.

 

[Sallow]

Reload this Page CEO Pay Often Not Linked to Performance

Yeah....And?

During my brief foray into working in the corporate world, almost nobody's pay was based upon performance...In fact, if you performed too well and acted like you gave a shit, you'd usually run afoul of middle management types who had become fat, lazy and complacent in the corporate bureaucracy.

So what else is new?

Aside from you defending that bullshit on a daily basis..while they play with Tax Payer dollars like monopoly money..

Not much?

 

[expat_panama]

...When a share holder finds out that management has failed then that's the time to STOP trusting. People who work in a free market need to count their change and read their contracts. What needs to continue (or start) here is a sense of personal responsibility for one's actions. It's true in the market, it's true in a marriage, and it's true in the voting booth.

Except that the personal responsibility shouldn't be applied at the executive level...

Ah, a teachable moment here.

We're talking about people having a sense of responsibility for their own actions, as in you can deal with the consequences of your actions if you want, and the adults here will expect to deal with the consequences of their actions. It means don't expect me to clean up after your bad money and voting choices.