CEO pay

#77
#77
rjd970 said:
Is this directed at me because of my comment that generally speaking the really good CEOs have been at the companies for a long time?

Not sure how your question applies.
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its directed at you. I reread your post and thought you were making a different point. please disregard.
 
#78
#78
Lexvol said:
That is a baseless moral judgement. It is no different than an evangelical saying that homosexuals are going to hell.
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Any evangelical that singles out homosexuals needs to get out of the evangelical business.

Per the Bible, in the eyes of God, anyone who have not been saved ( born again) is going to hell.
A homosexual is no different than a heterosexual.
Both must be saved to get to heaven.
A King, Queen, President is no different than a truck driver, school teacher or factory worker.
All must be saved to get to heaven.
 
#80
#80
Just to be clear, my issue isn't the pay itself, it is the justification and market forces driving it. It doesn't make intuitive sense. I agree with most on here this is no place for government to step in. Often times government solutions are worse than the problems themselves, I could see the government regulating this as disasterous to the equilibrium of the market.
 
#81
#81
nbakerld said:
Hmmm...GM took a lot of bailout money, right? Shouldn't that money be going back to the taxpayer?
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As a tax payer whose money was used to buy stakes in these companies (I'm part of the 60% of the country that actually pays something), I have yet to see my first dividend check.
 
#83
#83
rjd970 said:
1. Notice I never said all CEO pay doesn't make sense. Steve Jobs, Warren Buffett, Jack Welch, etc...are generally worth the money. Back to the link I posted, what is your opinion of the market forces at work there? From my seat it makes absolutely no sense.

I'm saying the market doesn't always get it right - hence the Jamarcus Russell comment in another thread.

2. The converse is true as well. Say the company makes huge amounts of money. Was it because of the CEO performance alone? How much did he really have to do with it on the ground level? He answers to the BoD and addressess shareholder value. He didn't come up with the product or service, how it is produced or distributed, or daily operations that is actually raking the money in.

Sure - again that's my point. With athletes, actors, directors people think they earn their money even if the team or movie stinks - take Ishtar for example, Dustin Hoffmann made bank but the movie was an epic failure. Was it his fault? Did he not deserve the pay?

So why treat these separately (my point was they shouldn't be).

3. Peyton Manning is a great example here. How did the Colts do this season? You don't think he was worth every penny, or he could have been replaced by anybody? Supply and demand are much more directly in play with actors and athletes. They are showing producable results directly attributed back to specifically how they are performing and contributing.

Again how are you rating the performance of a CEO? Are you privy to their performance reviews? With an athlete you can see the stats but I don't see why you as a casual observer judging their performance has anything to do with how the real buyer judges the performance. You think Peyton is worth "x" but you aren't the one choosing him. It is the company that is looking at available options and making the performance assessment. I guarantee organizations have a whole slew of performance assessments for CEOs that you simply aren't privy to.

4. Generally speaking, yes. Take Lin, he is putting fans in the seats. He is worth every penny, probalby more. It is also worth noting that the really great CEO's (Jobs, Buffett, etc) have generally been at the company from the beginning and have working knowledge what it takes at the trench level to make it work.
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I don't know that it is true that great CEOs have been at the company from the beginning. Haven't seen data to support that.

My larger point is that people don't know what CEOs do so they only look at short term financial metrics (and very basic metrics) to judge them and conclude they are over paid.

If the issue is they are overpaid relative to other employees in the company then the same is true for athletes/actors. Just because a person who has nothing to do with the pay can more clearly see performance for one than they can for the other doesn't make one more deserving of high pay than the other.
 
#84
#84
rjd970 said:
Just to be clear, my issue isn't the pay itself, it is the justification and market forces driving it. It doesn't make intuitive sense. I agree with most on here this is no place for government to step in. Often times government solutions are worse than the problems themselves, I could see the government regulating this as disasterous to the equilibrium of the market.
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My argument is that you aren't part of the market so why would it make sense to you. You can't see CEO performance the way you can an athlete's performance.

That isn't evidence that market forces aren't working.

In the most basic terms - market forces are prices being set by the market - what a buyer and seller will agree to to engage in exchange.
 
#85
#85
rjd970 said:
As a tax payer whose money was used to buy stakes in these companies (I'm part of the 60% of the country that actually pays something), I have yet to see my first dividend check.
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Agreed. That figure seems a bit high. I thought it was at 50%, FWIW.
 
#87
#87
volinbham said:
My argument is that you aren't part of the market so why would it make sense to you. You can't see CEO performance the way you can an athlete's performance.

That isn't evidence that market forces aren't working.

In the most basic terms - market forces are prices being set by the market - what a buyer and seller will agree to to engage in exchange.
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I still contend my point that when it comes to making the company successful and increasing shareholder value, the CEO isn't 300x more important than the guys that come up with the ideas and implement them. I would also say the mid level range managers have more at stake on a relative level. If they don't perform they get canned. If the board decides the CEO doesn't perform he gets his golden parachute and moves on.

That doesn't make sense, super-secret performance evaluations or not.

...I feel like I am coming across as complaining about the pay, which I'm not.

I work at a pretty big company, with multiple divisions and business sectors. Each division and business sector names employees of the quarter and employees of the year, based on individual contributions to company performance, and they are not always execs and managers. The CEO made $20+ million last year with bonuses.

It would be interesting to me to see what would happen with productivity and shareholder value if a portion of those huge bonuses were divided among those top performers as significant bonues (10's to 100's of thousands of dollars a piece). Seems to me it would create incentive and create true competition across the company to really make a difference to the company's bottom line.

I refuse to believe this hasn't been thought of before. Instead, boards are paying huge amounts to a single guy, and besides secret evaluations, has little to do with making the stockholders money.
 
#88
#88
rjd970 said:
I still contend my point that when it comes to making the company successful and increasing shareholder value, the CEO isn't 300x more important than the guys that come up with the ideas and implement them. I would also say the mid level range managers have more at stake on a relative level. If they don't perform they get canned. If the board decides the CEO doesn't perform he gets his golden parachute and moves on.

That doesn't make sense, super-secret performance evaluations or not.

...I feel like I am coming across as complaining about the pay, which I'm not.

I work at a pretty big company, with multiple divisions and business sectors. Each division and business sector names employees of the quarter and employees of the year, based on individual contributions to company performance, and they are not always execs and managers. The CEO made $20+ million last year with bonuses.

It would be interesting to me to see what would happen with productivity and shareholder value if a portion of those huge bonuses were divided among those top performers as significant bonues (10's to 100's of thousands of dollars a piece). Seems to me it would create incentive and create true competition across the company to really make a difference to the company's bottom line.

I refuse to believe this hasn't been thought of before. Instead, boards are paying huge amounts to a single guy, and besides secret evaluations, has little to do with making the stockholders money.
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You're sort of describing an ESOP company
 
#89
#89
volinbham said:
why are you the arbiter of what someone is worth? You aren't paying the guy/gal.

what's wrong with letting the buyer determine what they are willing to pay?
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I'm not saying I am. I don't really care that people make so much money, and nobody should have a say other than that companies board of directors. Simply stated that I dont think there are many worth that much and I wouldn't need that.
 
#94
#94
Vols520 said:
I'm not saying I am. I don't really care that people make so much money, and nobody should have a say other than that companies board of directors. Simply stated that I dont think there are many worth that much and I wouldn't need that.
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Lexvol said it best
 
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