Popping the executive compensation bubble

[Francis2004]

Should conditions be tied to Financial Aid given out to corporations?

Do CEOs and Company Executives have a duty to bow to expectations that Government will impose on them regulations on them if they give them our tax money to help their companies during this recession?

While I agree many companies need financial aid, I don't think they should do it at our expense while making million, while the rest of the world lives on meagre salaries.. I don't expect someone who made $20 Million to make $20,000.00 but I really don't expect them to make much more considering many have stock options and other perks that none of us usually have..

If John Thain had not been allowed to spend $1.2 million U.S. fixing up his office, including $1,500 for a wastepaper basket, would he have still have done as good a job? Considering he ran Merrill Lynch into the ground during his watch as CEO, it is hard to see how he could have done any worse.

This is a man whose pay and benefits in 2007 totalled something over $80 million.


The collapse of the Wall Street banks has poked an enormous hole in the idea of merit pay and perquisites. And into that hole has stepped U.S. President Barack Obama, who has announced a salary cap of a meagre half-million dollars for running a company that accepts taxpayer cash.


There have been howls of outrage. "No one goes to Wall Street to save the world," one well-paid analyst told the Bloomberg business news service.



And there is a certain justice in merit pay. If you are working hard while a colleague two desks away sits doodling and staring out the window, it feels right that you should be paid more.

Popping the executive compensation bubble

 

[shadowshiv]

Too bad for them if they don't think that $500 000/year is a fair wage. If they had not done such a piss-poor job of it in the first place, then they wouldn't have to worry about this, now would they? I feel absolutely NO sympathy for them at all.

 

[Francis2004]

Too bad for them if they don't think that $500 000/year is a fair wage. If they had not done such a piss-poor job of it in the first place, then they wouldn't have to worry about this, now would they? I feel absolutely NO sympathy for them at all.

I feel no sympathy either. I can understand why they want to attach the salaries to financial aid.. And so it should be and with big penalties if broken.. If we will bail them out and keep their companies afloat on the tax payers tab, they should at minimum be accountable.

 

[shadowshiv]

I feel no sympathy either. I can understand why they want to attach the salaries to financial aid.. And so it should be and with big penalties if broken.. If we will bail them out and keep their companies afloat on the tax payers tab, they should at minimum be accountable.

I agree 100%. There has to be personal accountability or this whole venture is a waste of our money.

 

[JLM]

Should conditions be tied to Financial Aid given out to corporations?

Do CEOs and Company Executives have a duty to bow to expectations that Government will impose on them regulations on them if they give them our tax money to help their companies during this recession?

While I agree many companies need financial aid, I don't think they should do it at our expense while making million, while the rest of the world lives on meagre salaries.. I don't expect someone who made $20 Million to make $20,000.00 but I really don't expect them to make much more considering many have stock options and other perks that none of us usually have..



Popping the executive compensation bubble

NO FRIGGIN' COMPANY WHO HAS EMPLOYEES EARNING OVER $100,000 should be eligible for any hand outs.

 

[Kreskin]

A Board of Directors decides what compensation is given to a CEO. Perhaps that is where the pressure should be focused.

We need to be careful how many rules are wrapped around this stuff. Lately there have been grumblings about names on arenas, retreats for staff and just about any other expense. These companies still need to market their products/brands and they need to attract and retain good employees.

 

[Francis2004]

NO FRIGGIN' COMPANY WHO HAS EMPLOYEES EARNING OVER $100,000 should be eligible for any hand outs.

So let me understand you correctly.. A Company with say 50, 100 or 200 employees with various salaries from $35,000 to $75,000 dollar should all be unemployed because their Owner / CEO makes over $1 Million and is expected to lose all his money in one shot ?

Yup great economics there..

 

[JLM]

So let me understand you correctly.. A Company with say 50, 100 or 200 employees with various salaries from $35,000 to $75,000 dollar should all be unemployed because their Owner / CEO makes over $1 Million and is expected to lose all his money in one shot ?

Yup great economics there..

Absolutely, a company that can AFFORD to pay it's C.E.O. $1 million dollars wouldn't be needing a handout.

 

[#juan]

I feel no sympathy either. I can understand why they want to attach the salaries to financial aid.. And so it should be and with big penalties if broken.. If we will bail them out and keep their companies afloat on the tax payers tab, they should at minimum be accountable.

Not only do I feel no sympathy, I think some of these guys should be in jail. What does one call it when the company is bankrupt and the CEO has been giving himself millions of dollars in bonuses? I call it embezzlement and fraud.

 

[talloola]

Obama made it quite clear the other day by saying "Companies give their CEOs bonuses
for a job well done, and they should not get bonuses for 'failing', as they have."


In my opinion, these companies are handing out bonuses out of fear, and making
sure they all line their pockets before their companies 'go down'.
We didn't just fall off of the turnip truck.

 

[Francis2004]

Not only do I feel no sympathy, I think some of these guys should be in jail. What does one call it when the company is bankrupt and the CEO has been giving himself millions of dollars in bonuses? I call it embezzlement and fraud.

Exactly.. Back in 2002 / 2004 ( if i remember properly ) when Enron, MCI and so on the Executives did such things, Bush supposedly put rules in place and thru these guys in jail.. It seems these same rules have been thrown out the window since that day as a new breed of these sleaze balls have replaced the old ones..

We must remember that one way or another companies reply on tax dollars to stay afloat ( corporate tax breaks ) and at some point we must take them to task.

 

[Francis2004]

Quoting SirFrancis2004 So let me understand you correctly.. A Company with say 50, 100 or 200 employees with various salaries from $35,000 to $75,000 dollar should all be unemployed because their Owner / CEO makes over $1 Million and is expected to lose all his money in one shot ?

Yup great economics there..

Absolutely, a company that can AFFORD to pay it's C.E.O. $1 million dollars wouldn't be needing a handout.

JLM do you even understand the logistics of this. A Company being public would have, as Kreskin has pointed out, a board of directors that decide what the CEO makes..

That said, the CEO is responsible for ensuring he brings value for the company and is not only paid in cash alone. Stock options and company performance Bonuses are often tied to their salaries.

That said, you would throw 100 to 200 employees that make a sub $100,000 salary out of work for one person at one million.

Do you even realize how much, as an example the Royal Bank and Scotia Bank CEO makes a year? $20 Million and they are the norm of this world in type of environment. I think it is personally gross but hey, a Hockey or Baseball player can make $20 million a year so why not a CEO and they only work 1/2 a season..

 

[Tyr]

NO FRIGGIN' COMPANY WHO HAS EMPLOYEES EARNING OVER $100,000 should be eligible for any hand outs.

The finacial help will go to very few companies then JLM. What would seen like an exhorbinet amount in "your" day is quite common in the 21st century. The "new" $100,000 is $200,000

Which for a salaried employee is exhorbinent. For a contractor or consultant is at the upper end of the scale.

Most companies of any size pay "good (not great)" salaries, great benefits and if you are in the upper echelon, significant bonus' based on company performance

A reasonable salary for a CEO should be $730,000/yr, 5% stock options, 100% benefits and a bonus based on the companies overall performance (not to exceed 10% of base salary)

Better than the 10's of millions currently in place in some industry sectors

 

[Colpy]

The finacial help will go to very few companies then JLM. What would seen like an exhorbinet amount in "your" day is quite common in the 21st century. The "new" $100,000 is $200,000

Which for a salaried employee is exhorbinent. For a contractor or consultant is at the upper end of the scale.

Most companies of any size pay "good (not great)" salaries, great benefits and if you are in the upper echelon, significant bonus' based on company performance

A reasonable salary for a CEO should be $730,000/yr, 5% stock options, 100% benefits and a bonus based on the companies overall performance (not to exceed 10% of base salary)

Better than the 10's of millions currently in place in some industry sectors

Being an advocate of labour, I personally think a much better incentive plan for a company seeking gov't help would be to line up all the upper management againt the wall in alphabetical order, regardless of rank, and do a count "one, two, BANG!", shooting every third one.......then inform them that next year, we can do it all over again, if there is not a significant profit........

But, unfortunately, such things could cause legal problems, so perhaps instead of shooting them, we could just fire 'em.....no compensation, no severance, no gold watch, just have security walk them to the door.........oh, and they don't get to leave in the company car. Give 'em a bus ticket.

 

[Liberalman]

CEOs should get whatever the company is willing to pay them and as for the shareholder I can only quoteFrank
Stronach “If the shareholders don’t like it then sell your stocks and go somewhere else”

Anybody can be a CEO of a company some of the CEOs out there a dung beetle wouldn’t touch even if it was starving to death and other CEOs if a company paid two million dollars a year people would think the CEO was working for peanuts.

CEOs are usually paid in salary plus stock options, which gives him or her the motivation to increase the value of the company.

The banks are being blamed for making their lending policies more stringent or only lending to those that have a history of paying their loans on time.

If you want to blame anyone you should be blaming the bank shareholders because they don’t want to lose their investments they’re telling their CEO to change the lending policies so the bank shares will be able to recover their losses.

 

[JLM]

Being an advocate of labour, I personally think a much better incentive plan for a company seeking gov't help would be to line up all the upper management againt the wall in alphabetical order, regardless of rank, and do a count "one, two, BANG!", shooting every third one.......then inform them that next year, we can do it all over again, if there is not a significant profit........

But, unfortunately, such things could cause legal problems, so perhaps instead of shooting them, we could just fire 'em.....no compensation, no severance, no gold watch, just have security walk them to the door.........oh, and they don't get to leave in the company car. Give 'em a bus ticket.

It makes sense to me, but I guess from what I've had pointed out to me by a couple of posters, all this stuff is a little far out for a poor old unsophicated fella like myself. Anyway C.E.O.s are paid what the board of directors decide is fair, so the C.E.O.s themselves are squeaky clean fellas. I'm just wondering how the shareholders feel about this while their capital gains and dividends are a big fat zero or close to it.

 

[Francis2004]

A quick note on this topic.. While many of us account to a boss, a CEO must account to a Board of Directors and Share Holders who have much higher standards of expectations then most of our bosses do. This said it "comes with the job" and should not reflect the economic situation none the less..

Back in January 2009 the National Post ran this article about CEOs.

Bonuses and salaries paid to Canadian chief executives are expected to come under increased scrutiny in 2009 from shareholders burned by the decline in stock prices and as mounting pressure to slash CEO pay in the United States spills over into Canada.

CEO pay in Canada has not come under as intense a spotlight as in the United States, but Hugh MacKenzie, a research associate at the Canadian Centre for Policy Alternatives (CCPA), says Canadian shareholders are likely to take a closer look at the issue when companies hold their annual general meetings this year amid a contracting domestic economy.

"To the extent that the meltdown in the market and the reaction to it in the United States creates new trends in compensation, those trends will leak over to Canada," Mr. MacKenzie said Friday.

"Executives used to get bonuses on the basis of strategic plans and meeting milestones," he said.


With downwards pressure on executive pay building in the United States and the Canadian economy slowing, CEOs are not expected to register such lofty compensation increases in 2009.

CEO pay in Canada to come under spotlight