You Can Cap The Pay, But The Greed Will Go On »
Posted By Beau7890 9 months, 1 week ago in Business & FinanceWith business executives seemingly oblivious to the nation's crisis, it's easy to see the appeal of capping exorbitant pay and wild spending. But corporate America's problem is more fundamental than that.
Since roughly the mid-1980s, the American public corporation has been run primarily for the purpose of creating vast wealth for its senior executives. True, executives have also sought to produce a return for shareholders and to deliver useful products or services to customers. And, of course, their businesses do provide jobs. But these concerns, for the most part, have been ancillary to the primary objective of enriching those at the very top.
Read Full Story at washingtonpost.com »
400 Views Share Story 44 Comments Report
Submitted By:
Beau7890
Truth rests on the mathematical reeds of the infinite and everything moves forward by order of the eagle riding pillion, while the genius of vegetable ...
RSS Join the Discussion
+ Add CommentComments So Far: 44 (view all)
-
91%
Progressive9 months, 1 week ago
This comment is below the standard viewing threshold View It »
Good article, Beau...thanks for the invite. This part has distressed me for some time:
Reply
"In 1980, executives at large companies made about 40 times what the average worker made. Last year, CEOs made about 360 times more than the average worker."
This ratio is unique to the U.S.-
100%
Beau78909 months, 1 week ago
This comment is below the standard viewing threshold View It »
Yeah, that bothers a lot of people. I liked this quote from the article too:
Reply
"On the NYSE today, the average share is held for less than a year, as compared to about five years in 1960 and two years in 1990. What matters isn't what the companies are actually doing but the expectation that the shares can be unloaded to a "greater fool" at a higher price."
But the idea of "market value" creating the opportunity for those in charge to make such ridiculously large sums of money (even though they don't own the companies, aren't in for the long run, and don't even necessarily perform well) is deeply entrenched. I liked that the writers pointed out how stakeholders see companies as personal ATMs, and that any value they might actually bring to the long-term health of their companies is ancillary to their main purpose, which is to extract as much value as quickly as possible from their companies.
Just yesterday, I was having dinner with a good friend who was arguing that because outrageous CEO pay is in line with the "market" for them, he has no problem with them taking home those large sums. My argument was that there needs to be some pressure to bring that market in line with reality, and it shouldn't be so hard to attract talented heads of companies for far less than most get. And really--how many executives really deliver enough value to their companies to be worth $20 million or more a year?
-
-
86%
4thchance9 months ago
This comment is below the standard viewing threshold View It »
capping their pay will do nothing to stop these creeps. All they would need to do is, rename their positions at these companies and collect that huge pay anyway! You know, Bob the president of the company, will just re-name his position, Bob the janitor.
Reply
He will still have the same job, but can still take that huge pay, and no one will know the difference!
These freaks have the best attorneys in the world. These attorneys will just find a loop-hole for them.
Nothing solved nothing done...-
78%
Beau78909 months ago
This comment is below the standard viewing threshold View It »
It's too bad the authors didn't give more specific ideas about how to reform business leaders to be more responsible toward their companies' long-term well-being. But they did give a few hints toward the end of the article that might help, if someone could figure out a way to implement them:
Reply
This system -- and the predictably reckless choices made by some of its most powerful players -- has brought our economy to the brink of collapse. To scold business may feel good and may even help move legislation along. But we need much more than a good scolding and limits on sky-high paydays. We need to rethink how American business ought to be run, including changes to fiduciary duties, legal liability, takeover rules and business education, among many other areas.
If the government were to impose the kinds of changes the authors propose--stricter limitations on corporate takeovers; regulations requiring corporate officers to be held liable for actions that are legal but clearly not in the long-term interest of the company; better oversight of business decisions by independent parties; changes in the way stocks are bought and sold in order to promote long-term investment--would proponents of deregulation and free-marketeers say those rules are socialist and block American business' ability to compete in the global market?
-
-
-
78%
Harbeas9 months ago
This comment is below the standard viewing threshold View It »
Greed is something we seem to take for granted and simply say nothing can be done about it. That's bull crap and we know it. We start with new mindsets and begin it with birth and from grade school on up. You may not be able to change something regardless of how hard you try, BUT if you don't try at all it's guaranteed not to change.
Reply-
14%
protoham9 months ago
This comment is below the standard viewing threshold View It »
Well let's start with the "new basis" Obama salary. Start with 400,000 a year and a pension of over $191,300 for the rest of his life, add a 2,000,000 car (just a guess), and a two $216,000,000 747s plus all the added features of Air Force one (about 1Billion) and his personal helicopter. Then the secret service, crew for air force one, chefs, house keepers for two houses, Whitehouse and Camp David.
Reply
So with all this added up he is making over 500 Million a year.
This guy has a lot of room to talk.
The Presidents and Congress salary should be based on GNP. -
-
-
obama-watchComment removed: Hard Banned3 Replies
-
-
-
100%
flyonthewallzz9 months ago
This comment is below the standard viewing threshold View It »
I heard on the radio: the other day that the “Dow Jones Industrial Average” is group of just 30 companies. Well I got a little obsessive: and started to build a little database on them. I do not have it here but I do remember some of the numbers.
Reply
They have lain off more than 600,000 folks. (I think that is a double digit %)
They have received 100s of millions in federal grants and 100s of billions contracts in the last 8 years. (Taxes paid for $1/2 billion of Coke in the last 8 years)
The Revenue from these 30 companies is about the same as the revenue of ½ of US personal income.
I did not finish figuring out how much bail out money they received, but the numbers are huge.
I think it is time to consider the value of companies that are “to big to fail”.
I do not think Adam Smith would consider them to be efficient.
There must be a way, which would fit into the conservative way of thought, to encourage competition.-
100%
flyonthewallzz9 months ago
This comment is below the standard viewing threshold View It »
In a free trade an effectual combination cannot be established by the unanimous consent of every single trader, and it cannot last longer than every single trader continues of the same mind.
Reply
The Wealth of Nations,, Book I, Chapter X -
100%
flyonthewallzz9 months ago
This comment is below the standard viewing threshold View It »
http://www.forbes.com/2008/11/17/layoff-tracker-un...
Reply
This is a list from Forbes of mass layoffs from fortune 500 companies in the last 3 months.
19 out of 30 of the DOW companies are on this list and they represent 56% of the layoffs or 213,724 folks. -
-
-
-
-
100%
canadianrancher579 months ago
This comment is below the standard viewing threshold View It »
I hope this comment will be considered on topic. Up here in Canada the major players in the fertilizer industry created the story last spring that there was a shortage of fertilizer so the price went straight up, throught the summer and into the fall they continued to sell the story that there was a shortage and if you didn't buy now you would not be able to later. It came out that the companies had a 600 percent increase in profits but actually sold about the same amount of fertilizer, so we were lied to by them and now since no one has bought fertilizer they are sitting on a glut of it but instead of lowering the price to move product they have shut down the mines and layed the workers off. When you talk of the greed of the top level of management I think this is a good example. They did it to us once so they think they can do it to us again.
Reply
The same thing is happening down in your country, some of the top executives have basically said to h*ll with everyone including the companies they run and are grabbing every last bit of loose change available.
In my opinion any company who paid increases to CEOs while the company is failing should not even be entitled to government money. -
0%
aceofspades19 months ago
This comment is below the standard viewing threshold View It »
What really gets me about the CEO compensation controversy is that it seems to me that the guys complaining the most are those who cannot afford to fill their gas tanks but would gladly pay well over $100 to take their family to see some steroid filled ,overpaid, (over $10 mil a year for top BB players) underachieving athlete play a game for a couple of hours, but bitch about an executive who provides employment for many receiving what they perceive to be outrageous compensation.
Reply
P.S - A baseball player hitting .333 could easily get a multi-million $ contract , but .333 means he's only doing his job 1/3 of the time.-
100%
flyonthewallzz9 months ago
This comment is below the standard viewing threshold View It »
http://www.ntu.org/main/press_papers.php?PressID=3...
Reply
Feb 28, 2001
"A careful review of lease information from both Major League Baseball and the National Football League found that taxpayers around the country have spent more than $7.5 billion on stadium construction since 1990"
-
Add a Comment
Sign In With Your Propeller Account
Please keep your comments relevant to this story.
To create a live link, simply type the URL (including http://) or email address and we will make it a live link for you. You can put up to 3 URLs in your comments. Line breaks and paragraphs are automatically converted — no need to use <p> or <br /> tags.