Thanks to a change in federal rules 18 months ago, it’s now much easier to find out details of so-called “golden coffins,” which are—yes, this is real—posthumous payouts to CEOs that can climb into the hundreds of millions. Brian Roberts of Comcast will receive $298.1 million if he dies in office; Robert Iger of Disney will receive $62.4 million; Ivan Seidenberg of Verizon will receive $43.4 million. Ha ha, life insurance is for paupers!
Companies defend the practice as an appropriate way to take care of an executive’s family after an unexpected death. They also note that the benefits often are negotiated as part of a pay package that has many components. In many cases, compensation attorneys say, death benefits are really a form of deferred compensation, structured partly for estate-planning or tax reasons.
Companies often say one goal of their pay packages is to keep executives from leaving. But “if the executive is dead, you’re certainly not retaining them,” says Steven Hall, an executive-pay consultant in New York.
We’re fine with this, but only on one condition: that the CEO’s family members, pets, and belongings have to be buried with him.
“Companies Promise CEOs Lavish Posthumous Paydays” [Wall Street Journal]
(Photo: t-bet)
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@raisitup:
There are no “supply and demand forces” in senior executive compensation.
When you are deciding how much your friends are paid, and they are deciding how much you are paid, you will make as much money as they do.
@Greg-USA:
Wow, you did not understand a thing I said. I thought I was being clear, but perhaps I assumed a basic understanding of economic principles and a knowledge of how things get done in this country.
I thought everyone knew about how the credit crisis came to be. But apparently not. I PROMISE you that your understanding of how it went down is wrong. There was massive massive massive fraud at the actual mortgage level in addition to “well, we’re going to pass the buck for a profit, so it doesn’t matter” at the higher levels. Traders at the brokerage houses ASKED lenders to create more bad loans so that the brokerage houses could repackage them and sell them to third parties. The previous incentives were… you know what? I’m not going to go into detail here. The information is out there. Go find it.
Speaking of information, it’s pure absurdity to say that an individual purchaser has the same level of information and expertise as lenders. I don’t even know where to start with this one. Again, it indicates a vast ignorance to even state just a thing. Banks were perfectly capable of offering solid mortgages for generations. Why? Because they KNEW. In the case of the credit crisis, they KNEW and they ignored. To blame a series of individuals ABOVE a a fundamental systemic flaw is beyond absurd and, more important, as a policy outlook it simply doesn’t work. Because policy can control systems but not individuals. THE most basic tenet of economics is that individuals will respond to appropriate incentives. The fact that so many people acted against their own rational interest is, in economic terms, proof that the incentive SYSTEM was by definition corrupt.
Your logic reminds me of that old auto industry “bean counter” scandals of the eighties. It came out that some car companies knowingly allowed fatal flaws in their cars (e.g., a car flips over while the blinker is on and the car immediately explodes) because they assumed that the financial settlements for the occasional fatality was cheaper than refitting all of their cars. It didn’t matter that actual human beings would die. Now, by your logic, in addition to that being okay, the drivers in such accidents are completely to blame for swerving to avoid a squirrel and rolling over. And that’s true – up to a point. But surely you can see what that point is?
The reason I said that those involved with the credit crisis got paid too much is because they lost their employers BILLIONS of dollars and yet walked away with hundreds of millions, if not billions. They were paid despite failure on an unimaginable scale. That is one instance where you can say yes — they earned more themselves than they made for the company.
As for my statement regarding whether those at the top adding more value than they pull, the above example makes my point. Corporations are organizations, and it’s very hard to determine how much value is added by a CEO. A company can lose money under a CEO’s watch and still turn a handsome profit, whereas under another CEO the company could have made additional profit. THE only instance in which it makes sense to pay a CEO, say, $20 MM, is if you can be sure that the actions of that CEO — and that CEO alone — added more than $20 MM in NET PROFIT to the company’s bottom line. Does that make sense?
And lastly, as far as things being legal yet unethical, everything is legal before someone does it. After things become a problem, and enough people recognize it as such, it THEN becomes illegal.
As for regulation, it is a very delicate balance. But what is clear is that as true as it is that dictatorial levels of regulations are extremely harmful to the economy, complete lack of regulation is also harmful to the economy — i.e., the population — as a whole. I’m not going to go back into the details of what regulation and oversight was dropped in the case of the credit crisis — again, a google search will probably give you a lot of information on that — but suffice it to say that changes to banking regulation and oversight allowed this to happen (the big brokerage houses are actually banks, and the regulations had a lot to do with how certain fundamental banking practices were allowed to be traded speculatively). Regulating and protecting the economy is as important as regulating and protecting city streets. I’m not sure why so many people think the latter is the job of government but the former isn’t.
@Greg-USA: Sorry, I must have missed your earlier post.
“Oversight is just another word for more government control. Where is your oversight when our government officials vote for their own pay raises without it being performance-based? Does that bother you? At least the CEO’s of these large, evil profit-making companies are actually doing something to make people’s lives better rather than trying to take everyone down to the lowest common denominator.”
I have a problem when the government does it too. Did you think that I wouldn’t? Do you have a problem when government does it? If so, why is it acceptable when corporations do it?
Anyway, the big issue, that several have brought up, yet the “anti-socialists” for lack of a better description fail to address, is why are they making so much money when they fail? Your reasoning is that CEO’s deserve the money they earn because they take risks and bring more money to the company. I can agree with you on that (in theory at least, though I might disagree on specific instances), but by that logic, if they make the company lose money and take stupid risks, doesn’t that mean that they don’t deserve the money? Yet they get it anyway.
It has never been about how much money the CEO’s make. The issue is the fact that the system allows the CEO to have such enormous influence on their own paycheck. If shareholder’s determined CEO pay (and I mean choosing it in the first place, rather than disputing a decision that was made without them) and they agreed to pay a CEO twice as much as they make now, I would have no problem. I would find it ridiculous, but I wouldn’t care. It is not about the numerical figures, it’s about an easily abused system.
I just realized something that never occurred to me before … I think the CEO apologists are actually MORE idealistic than all the people they’re labeling socialists. Why? Well, obviously they’re not making the zillions of dollars the CEOs are — no one posting in a blog is — but they believe that they COULD. If they wanted to. Because this is America, where hard work and dedication is all you need to pull yourself up by your bootstraps and get to wherever you want to go.
Sorry, no. There might be a CEO or two who can claim that, but for the very large part the heads of corporations come from a relatively small pool of white guys whose families have had mountains of money since the country was founded. They trade positions between each other, scratching each others’ backs and making sure nobody else gets into the club.
There isn’t much that’s actually “free” about the market, and saying we have power as shareholders to change that is akin to saying that in a Libertarian state consumers should just avoid buying from the companies that pollute. Well, with no government oversight, how will we ever know which companies those are? And what if there is only one company?
True capitalism is as much of a pipe dream as true communism, and for exactly the same reason: Greed.
I have to wonder, how many of you people against CEO’s making a lot money – have you ever been in a high-level corporate position? Have you ever started and owned your own business?
If you haven’t, this may be the disconnect.
Greg-USA
@EasttoMidwest: Oh, please. You’re comparing murderous gangsters and con men with CEOs, now? A CEO taking profits out of a company he fully controls and, in many cases, owns a controlling share in, is not immoral. It’s his company! He can pay himself what he pleases; morality isn’t a factor here. This does not mean you can do with your baseball bat what you please, if it means hitting me over the head. Obviously, there’s a line there where my rights trump your own. But if your baseball bat is making you money, legally, you can keep that money and I’m not going to claim you’re immoral for not sharing it with the guy who made the bat.
On the mortgage crisis: What would you have done to prevent it? Greedy banks and greedy consumers united. I think they all got what they deserved. You couldn’t pay me to take a variable rate mortgage full of fees and anti-consumer contract language. Thing is, these were private transactions. What would you have done, stepped in and told consumers who wanted, in many cases begged, banks to make these bad loans because it was the only way they could buy a house – would you have told them, “You can’t have this mortgage because it’s bad for you?” What happened to personal responsibility? Let people do what they choose and let them face the consequences of their actions.
You talk as if the big mean banks screwed over the little guy here. That’s not the case at all. The little guys were, by and large, complete idiots for signing those mortgages in the first place. Most of them had no business buying a house, thus the reason they could not get a traditional mortgage. Let them sit in their stew. Now, I realize there were some isolated cases of lenders intentionally pushing people who qualified for traditional mortgages into this mess. If this went on, there should be legal consequences for their actions. I’m thinking make the entire loan null and void and let the consumer who was intentionally cheated by the bank keep his house free and clear. But most of it didn’t work this way. Most of these people wouldn’t have qualified any other way and willingly went into it. Screw them, they made their bed.
@Tiber: The workers are going to pay debts with an extra $4 per year that you took away from their CEO? Are people in debt to McDonalds for their kids Happy Meal now? You talk as if the company is completely screwing the workers, keeping them in poverty. Reality is the companies are giving a lot of workers a lot of money already. Such additional, tiny amounts will make zero difference in their lives. In the meantime, the company would lose the ability to offer these little perks to attract and keep a competent CEO.
It’s all good and well until people who have more money than you decide that it won’t make a difference, so they’ll just keep it for themselves. – Well, if they control the company, then they have the right to keep it for themselves. You are not entitled to any sort of profit sharing just because you’re an employee of the company. Generally, the top brass get this. It’s how companies works. Again, I say to you, if you don’t like it, you are welcome to start your own company that shares it’s profits equally with everyone and pays it’s CEO just slightly better than it’s janitor – if you really think you can make that work (I wish you luck). You don’t, however, have the right to tell other people how to run their companies.
However, companies are legally obligated to serve their shareholders – Care to cite the laws? Companies are only obligated by their shareholders to serve their shareholders. There is no law that I’m aware of that says a company must serve it’s shareholders. The government has nothing to do with this. This country is not capitalist because the government says so, it’s capitalist because the private citizens who founded it said so. It remains capitalist because it’s citizens, by and large, continue to insist on it.
However, in a corporation, aside from their shares, the company’s money is no more theirs than it is the accountants. – Not true. The company’s money effectively belongs to whomever owns a controlling share of the company. Generally, that’s the CEO and/or another high level official, or group of officials acting together (board of directors).
@Greg-USA: Well there you go again blaming people for making too much money. I think the money you make is too much. I demand you give some to me. – Hahahahaha! Thank you! That’s exactly what I am talking about.
@RvLeshrac: And they are ALMOST NEVER HELD ACCOUNTABLE WHEN THEIR ACTIONS DESTROY A COMPANY. – So? In most cases it’s their company to destroy, given they own a majority controlling share. You can be pissed about it, but not much you can do. If I want to run my own company into the ground, that’s my business.
I have absolutely no problem with awarding individuals for outstanding performance, but this is awarding people with vast amounts of money for simply *showing up to work*. – I know. It’s a sweet gig. Tell me with a straight face you wouldn’t take it if given the opportunity.
the Snake Oil Salesman holds *MORE* of the blame because he is *consciously aware* of the fact that he is cheating the other person. – How do you know that? The price of houses was on the rise. You don’t think it’s possible some of these lenders truly believed their customers’ homes would continue to increase in value? Sure, they made “promises” they had no control over, but in most cases what they said was generally true. Chances were damn good your house these houses would continue to increase in value.
@Greg-USA: If you haven’t, this may be the disconnect. – Good call, Greg. I have owned several small companies, that I built from the ground up. None turned into multi-million dollar ventures, but I can only imagine how I’d feel if they had and some little shit came up to me and said, “You’re paying yourself too much money.”
I ask again, who defines how much is “too much”? Those of you who say CEOs make “too much”, can you answer this question? How do we choose the amount? Who gets to pick? I make good money, so my number is bound to be much higher than, say, the guy flipping burgers at McDonalds. My opinion isn’t necessarily more important than his, though, so which of us gets to choose?
My cousin is an ardent socialist. She thinks the line is $40k a year. As in, anyone making more than that should be taxed at 100% for “the better good of the rest of us.” Hillary Clinton likes to take money away from those who make “too much”, too. She thinks the line is closer to $10M. Conveniently, everyone who has ever tried to set the “too much” bar always sets it just above their own salary. I find that intriguing.
@Greg-USA: Indeed.
Calling them “golden coffins” is completely misleading and apparently pissing off a large contingent of Consumerists readers. That money is used to pay off CEOs estates, which include ALL money practices they are involved in. Own a huge chunk of stock? Directer of a mutual fund? A couple of trusts in your name? OTHER FAMILY MEMBERS trusts in your name?
Uh Oh. That’ll be $20 Million in fees please. You say you have a family and a mortgage? Too bad.
@jimconsumer:
I don’t know why I’m bothering to make this last point because it’s clear to me that, in addition to being a fringe lunatic, you have poor reading comprehension skills, but I’d hate to have another reader think that you are correct about anything.
You’ve morphed your argument into something about how executives control the companies because they have a controlling interest in the country. What on earth makes you think this? I mean, really, do you have any idea how many shares are outstanding in any of the companies we’ve been discussing (Comcast is an exception in that it really is a family business. It’s also piss poorly run — in no small part because they won’t spend the money to hire skilled and happy employees (because investing in employees is actually a corporate investment with predictable returns), but that’s another conversation for another day). Oh wait — sorry about that. I used several clauses in the course of one sentence to express the interrelationship of several ideas.
Okay, back to the main point. It is a completely fallacy that most corporations (at least those of any size and influence) employ CEOs who have controlling interests. God, you really don’t know much about this, do you?
Now if someone alrady is a controlling shareholder and he or she decides that he or she wants to personally run the company, that’s one thing. But most top executives are given additional shares — by themselves — after they’ve attained a certain amount of power. Get it?
Now, I would like you and this greg fellow to find ONE place in the comments posted by those to whom you replied where anyone makes a statement about salary caps for CEOs.
See that’s exactly what I’m talking about in terms of poor reading comprehension skills. Instead of listening and making an effort to understand what was being said, you opted to hear a few words which triggered some sort of association and inferred meaning which was never stated. I’m sorry you’re neice is a moron (if she really is). Doesn’t mean I am. In fact, we might not share any characteristics whatsoever.
And lastly, I and some other posters are not “disconnected” because we aren’t CEOs. Although, if we were disconnected for that reason, then it would follow that CEOs are disconnected from the effects of their actions on everyday people.
No the real disconnect from reality is that YOU actually think you can be one of these guys. You can’t. You won’t. And they will fuck you over any way they can and you’ll take it with a smile. And that’s sad.
I know I’ve been harsh with you, but I harbor no ill will toward you and wish you the best of luck.
@EasttoMidwest: I’d hate to have another reader think that you are correct about anything. – Too late, Scooter. That train has already left the station. The fun thing about people like you is, when the conversation doesn’t go your way, you react by calling names, resorting to personal attacks and twisting words. I didn’t say “most corporations” employ CEOs who have controlling interests. I said “in many cases.” Many does not equal most. Further, if the CEO’s buddies hold controlling shares, sit on the board of directors and do his bidding, as has been stated several times in this thread, then the CEO has full legal control and authority over the company. He effectively owns the controlling shares himself.
Now, I would like you and this greg fellow to find ONE place in the comments posted by those to whom you replied where anyone makes a statement about salary caps for CEOs. – You have got to be fucking kidding me. All of this talk about CEOs making too much money, how they don’t need more, how that money should be redistributed to others, and you’re telling me that’s not the same as calling for a salary cap? You’re calling for taking money away from the CEOs. It’s the same damn thing. Besides, I didn’t use the words “salary cap”, you did. All I asked was, “How much is too much?”, and, “Who gets to decide?”
I’m sorry you’re neice is a moron – You’re hilarious. You accuse me of having poor reading comprehension skills, yet you misquote me constantly. I clearly said my cousin, not my niece. Is it relevent to the discussion? Not really, but it is ironic given I’m supposed to be the one with the poor skills.
No the real disconnect from reality is that YOU actually think you can be one of these guys. – Right, because you know a damn thing about me. Oh, that’s right, we’re completely anonymous and don’t know shit about one another. So why do you assume you have any idea who I am?
It’s telling that you don’t believe any of us can attain this level of success. If you really think there is a coordinated effort to keep everyone down, no wonder you are so sour on CEOs. I’m an optimist and I don’t believe in conspiracy theories. I know I’m capable of attaining that level of success; I’m already most of the way there. It’s too bad you don’t believe in yourself more.
@jimconsumer:
“The workers are going to pay debts with an extra $4 per year that you took away from their CEO? Are people in debt to McDonalds for their kids Happy Meal now? You talk as if the company is completely screwing the workers, keeping them in poverty. Reality is the companies are giving a lot of workers a lot of money already. Such additional, tiny amounts will make zero difference in their lives. In the meantime, the company would lose the ability to offer these little perks to attract and keep a competent CEO.”
When did I ever say companies are screwing workers? You’re putting words in my mouth based on your perceptions of people you disagree with. My point is that you assume that workers have no use for the money, and that that extra money is necessary to keep a CEO. Also, that money is being used to keep CEO’s who are less than competent as well.
“It’s all good and well until people who have more money than you decide that it won’t make a difference, so they’ll just keep it for themselves. – Well, if they control the company, then they have the right to keep it for themselves. You are not entitled to any sort of profit sharing just because you’re an employee of the company.”
See my second to last sentence in the paragraph above. Also, I never said I or anyone else was entitled to it. Once again, the issue is the fact that the system allows the CEO to have such enormous influence on their own paycheck.
“You don’t, however, have the right to tell other people how to run their companies.”
I am not giving anyone orders. I am stating an opinion.
“This country is not capitalist because the government says so, it’s capitalist because the private citizens who founded it said so. It remains capitalist because it’s citizens, by and large, continue to insist on it.”
Minor quibble: this country was founded by traitors to another country. A government can not be founded by citizens, because by definition a citizen is a member of a state or nation. That’s like saying someone “wanted to be raped.” Anyway, it’s the current government’s decision to remain capitalist. If the majority of the government wanted America to become communist, it would be. There’d probably be a revolt, but they could.
“However, in a corporation, aside from their shares, the company’s money is no more theirs than it is the accountants. – Not true. The company’s money effectively belongs to whomever owns a controlling share of the company. “
That’s why I said “aside from their shares”. I’m well aware that the top brass has a lot of shares, I’m simply saying that if some hypothetical CEO had no shares, then the company’s money would be belong to him no more than a child belongs to its babysitter. A CEO in principle does not “own” a company, he merely manages it. Also, if you own 51% of a company, 51% of the money belongs to you. 49% belongs to others. You may be able to make any decision go your way, but if you abuse that power it may come back to haunt you.
“You talk as if the big mean banks screwed over the little guy here. That’s not the case at all. The little guys were, by and large, complete idiots for signing those mortgages in the first place.”
I won’t disagree with you on the idiocy part, though you act as if not knowing something and making a mistake was a sin. However, there are plenty of cases where lenders gave out loans that violate the law, because they figured that customers wouldn’t figure that out.
“A CEO taking profits out of a company he fully controls and, in many cases, owns a controlling share in, is not immoral. It’s his company! He can pay himself what he pleases; morality isn’t a factor here.”
I consider it immoral if the CEO owns less than 100% control of the company, unless the other shareholders see their share of the money. If morality isn’t a factor, then why hide their salary? The way I see it, a CEO is not an owner because you can’t fire an owner, but you can definitely fire a CEO. Put it up to a shareholder vote; even if the CEO has a controlling share, at least then the other shareholders will know what kind of company they’re dealing with. On a related note, you suggest that a CEO might move on to another company if not for their lavish salary; yet, if they own a controlling salary, how is this a concern?
“I have owned several small companies, that I built from the ground up. None turned into multi-million dollar ventures, but I can only imagine how I’d feel if they had and some little shit came up to me and said, “You’re paying yourself too much money.” “
Ah, so the self interest shows itself. The disconnect is, you keep imagining us as some impudent little shits who want to steal your money and laugh about it. Sorry, I don’t know who you are and I don’t care. I don’t know how much money you make and I don’t care. You keep misinterpreting our point, even though it has been stated several times. Your own biases are making you completely overlook what we are trying to say.
So I’ll say it again.
It is not about the numerical figures, it’s about an easily abused system.
@Tiber: You’re putting words in my mouth based on your perceptions of people you disagree with. – No, I’m not. I absolutely did not say you made that statement. I said, “You talk AS IF…”. I don’t assume that workers have no use for the money. I’m sure they could find a way to spend it. However, the simple fact is the kind of money we’re talking about is irrelevant in their lives. If you’re making $33k a year, an extra four dollars means nothing to you. Honestly, it doesn’t. If your boss called you into his office to say you were getting a raise, and you found out it was four bucks a year, would you give a shit either way? If you’re anything like me, you would wonder why he went to the trouble. I mean, really, what’s the point?
the issue is the fact that the system allows the CEO to have such enormous influence on their own paycheck. – I get that. What I don’t get is why it’s an issue to you? Really, why do you care that some people get to choose how much they get paid? I’ve run several small businesses. Some profits are retained by the business for savings or investment; other profits are taken by me as a paycheck; still other profits are used to give employees raises, or hire more employees, etc. As the person running the business, I’ve always decided how much to put toward each of these; thus, I’ve decided my own salary.
This is apparently something that bothers you and I can’t, for the life of me, understand why you should give a shit one way or another. Furthermore I vehemently disagree with the idea that any of you get even an ounce of influence over what I do with the profits of the businesses I control. Granted, my small businesses were not large, publicly traded companies, but still, if you don’t like how the CEO is running things, don’t invest your money in that company. It seems simple enough to me. For people to get all pissy about how things are run is ridiculous.
If the majority of the government wanted America to become communist, it would be. – For a few days, perhaps, until We, The People took our country back by force.
You may be able to make any decision go your way, but if you abuse that power it may come back to haunt you. – Certainly. I won’t argue with that.
However, there are plenty of cases where lenders gave out loans that violate the law, because they figured that customers wouldn’t figure that out. – Understood and agreed. Those lenders should be tarred and feathered and forced to pay due recompense to those they screwed.
If morality isn’t a factor, then why hide their salary? – Privacy. I don’t want everyone to know how much money I make. Do you?
It is not about the numerical figures, it’s about an easily abused system. – The system will always be easily abused. It’s the nature of the beast at the top tiers of any system of power. Sure, you could put in oversight committees, etc, but then you tie everyone’s hands and embroil the company in bickering and negotiations that prevent it from reacting quickly. Besides, I’ll again reiterate that it is not OK for outside groups, including the government, to step in and say, “Hey, your corporate structure is easily abused by your CEO. You need to fix it.” If a majority of a company’s shareholders want to do it, then they need to do it. Everyone else can go fly a kite because it’s really none of their damn business.
And yes, the self interest does show. I’ve never tried to hide it. If I control something, I’ll do with it as I please. I’m not going to let anyone else tell me how to run things. If I’m not the owner and the actual owners don’t like it, they can revoke my control, but the government and all of the rest of the people who think they ought to have a hand in things can all go fuck themselves. The only people who get a say are the majority owners. If that also happens to be me, well, then I’m top dog and nobody else gets a say. You can ask, beg, attempt to coerce and convince, but at the end of the day it’s my damn decision whether everyone else likes it or not.
@jimconsumer:
you react by calling names, resorting to personal attacks and twisting words.
You’re not wrong. I don’t think I called you names but I did get carried away and shouldn’t have spoken to you that way.
On the other hand…
Are you a filthy socialist or something? You want to take that money away from him? Why? What do you care? You don’t want to see other people succeed? You think it’s not fair that he gets that kind of money and you don’t? What’s the problem, anyway? To any socialist who thinks it’s OK to “put an end to this”, I can’t wait until your fellow socialists decide your income is too high and put an end to it, too. “But I don’t make very much money”, you’ll whine.
In my elementary school we used to call that dishing it without taking it.
I didn’t say “most corporations” employ CEOs who have controlling interests. I said “in many cases.” Many does not equal most.
Then why did you bring it up? If it’s a small part of the whole than it can’t be used to make a point about the whole. You’ve just dismissed your own (falacious argument). That’s like saying that soem Americans live in Tulsa, therefore we should draw our conlusions and base our policies on the conditions in Tulsa.
I clearly said my cousin, not my niece.
You’re right. I was mistaken. What I did there was a admit to a mistake. I’m pleased to have been able to provide you with a toehold into the sheer face of my argument. KIDDING. Sort of. This however, has no bearing on the content of my argument.
Right, because you know a damn thing about me. Oh, that’s right, we’re completely anonymous and don’t know shit about one another. So why do you assume you have any idea who I am?
I refer you to the second block of quoted text. I don’t know much about you, it’s true. But I do know, thanks to ample evidence, that you are a hypocrite. That is about the only thing I can say with certainty about you.
It’s telling that you don’t believe any of us can attain this level of success.
So now you know all about me? Hypocrite.
If you really think there is a coordinated effort to keep everyone down, no wonder you are so sour on CEOs.
I’m an optimist and I don’t believe in conspiracy theories. I know I’m capable of attaining that level of success; I’m already most of the way there.
This is what I mean about poor reading comprehension skills. I never said anything remotely like this. The only thing that could even be remotely construed that way is the assertion that the many boards are stacked for the CEO. And apparently, you agree with me. The post where you said it seems to have disappeared, but you did say something about boards conspiring to put their ownership shares behind a CEO.
And I highly doubt you’re almost there. While there are lots of ways for people like you to make a lot of money, you lack the abstract, critical and empirical reasoning skills necessary for a high level leadership position in a functional organization. That’s not to say you aren’t able in other areas, but based on your writings here, I doubt you could make it through a second or third tier MBA program.
Obviously, there’s a chance that I’m wrong, but that is the impression you’re giving here. That’s not meant as an attack, just an educated opinion. You wouldn’t make it at my frim.
It’s too bad you don’t believe in yourself more.
Hypocrite.
@jimconsumer:
Except for the $4.00 to someone making $33,000 statement, this is the most cogent thing you’ve written. I don’t agree, but it makes sense.
What I think is especially ridiculous is to throw around socialism like it’s an epithet, and at the same time saying that corporate executives of publicly held companies are entitled to extract as much personal wealth out of a business as they can get away with. After all, what is a corporation if not a collective enterprise? Where would these CEOs be without other peoples’ money (shareholders) and labor (employees)? Nowhere! No one “earns” $300million running a one man show. There comes a point when the richest of the rich aren’t just enjoying the fruits of their labors, they’re extracting the wealth from other peoples’ labors.
Meanwhile, the argument that Joe Blow CEO’s $100million pay package doesn’t matter because it’s only a miniscule fraction of a company’s revenues or market cap is a joke. Why not just let thieves get away with robbing banks, as long as they only take a few grand? After all, it would only equal a couple pennies out of my own deposit.
@EasttoMidwest: I don’t give a fuck whether you believe me or not. I do think it’s hilarious that the exact skills you claim I lack are those I use, successfully I might add, on a daily basis.
@JiminyChristmas: Right, because legally paying yourself a large salary is the same as stealing. Why would you even make such an asinine comparison?
@EasttoMidwest:
“No, I’m not. I absolutely did not say you made that statement. I said, “You talk AS IF…”. I don’t assume that workers have no use for the money. I’m sure they could find a way to spend it. However, the simple fact is the kind of money we’re talking about is irrelevant in their lives. If you’re making $33k a year, an extra four dollars means nothing to you.”
Sorry, poor choice of words. I did not mean you literally claimed I said something which I did not. What I meant was, I have no idea how you got any indication that I thought companies were screwing over workers. I’ve even said that I don’t care that whether the money goes to the workers, I only care that it’s being taken out of the company in the first place. You are imagining things about my beliefs that are not true. As to the $4, I was simply stating the flaw in the argument that it’s better to give one person a lot of money than to give many a little. I might wonder why my boss brought me in over $4, but I’d take it.
“Really, why do you care that some people get to choose how much they get paid? I’ve run several small businesses. Some profits are retained by the business for savings or investment; other profits are taken by me as a paycheck”
In your case, I mostly don’t. In the case of large, publicly traded companies, the money they take can add up quickly. To me, it’s largely an ethical matter, because I see it as taking money that doesn’t belong to them. I don’t have to be personally affected for it to matter. I’ve already said that I wouldn’t have a problem with it if the execs didn’t try to hide it, and I would prefer that exec pay be determined by a shareholder vote.
“If the majority of the government wanted America to become communist, it would be. – For a few days, perhaps, until We, The People took our country back by force.”
I did say people would most likely revolt.
“If morality isn’t a factor, then why hide their salary? – Privacy. I don’t want everyone to know how much money I make. Do you?”
$39,500/yr. Whoop-de-freaking-do. It’s just a number. I can respect the right to privacy, but the way I see it, company money is shareholder money, so shareholders should know how it’s spent.
“”Hey, your corporate structure is easily abused by your CEO. You need to fix it.” If a majority of a company’s shareholders want to do it, then they need to do it.”
I agree, but they can’t fix a problem they don’t know about. That’s why these articles exist. Didn’t you just say their salary should be private just a minute ago? Shareholders are supposed to correct excessive pay if they think its a problem, but they also have no right to know what executives are making? See any contradictions there?
@EasttoMidwest: I was going to call him on the “filthy socialist” thing, but I figured you would, so there was no need to double post.
@Tiber:
Yeah, I think I’m done with this one. I love a good scrape, but this is just stupid.
In the immortal words of Hawkeye Pierce, “My mom always told me two things. Always wear clean underwear and never argue with crazy people.”
Be well.
I am continually amazed at these pro-socialist comments. If you feel the word “socialist” is over used then you have probably heard it plenty of times in response to the control you want to dictate over others. I will bet my entire worth against yours that if someone else tried to control you the way you want others to be controlled you would fight it. Well, at least I hope you would. I can argue that controlling you is for the betterment of everyone.
I have yet to receive a reply from any of you people against CEO’s whether or not you have ever been in any upper management capacity or owned your own business. I can guarantee you that if you did, your entire view of the world around you would change completely. Businesses, especially small ones, are already punished enough yet they are the back bone of America.
I recently sold stock in a company that I didn’t agree with their business practices. The stock had also dropped significantly, which I am sure is an indicator of their performance and other people thinking the same way. As a minor stock holder I have no way to change their actions so I sold it. That’s the only thing a minority stock holder can do. Should the majority stock holders listen to a few small people and do their bidding when the majority wants something else? No.
I also find it interesting that the same people calling for more government intervention, which is socialism no matter how you want to phrase it, are the same people who hate big government looking in on their lives. You can’t have it both ways.
It’s also amusing to me when people try to use their education levels and degrees to prop up their position as if they know better than others. You didn’t inquire about the other’s education level; you just assumed yours was higher and proceeded to display your elitism and arrogance as if no one else can understand what you understand. Bill Gates didn’t finish college so I guess he can’t possibly understand high level economics as well as you. Will telling you how many degrees I have make my opinion worth any more?
This Golden Coffin is a direct result of previous people in government trying to cap CEO pay. I think it was the illustrious socialist Jimmy Carter who put some of this into play. When they do this, the evil profit making companies will find a way around it. We want to cap CEO pay? Fine. We will just give the CEO stock options and pay their insurance, their travel expenses, give them an expense account, etc. If the corporation has any money left at the end of the year they have to pay huge taxes on it. It’s far better to disperse it than to give it to the government so they can waste it. Yea, I am sure that concept made a few socialist heads spin.
@EastToMidwest – “Now, I would like you and this greg fellow to find ONE place in the comments posted by those to whom you replied where anyone makes a statement about salary caps for CEOs.”
Everyone against the high CEO pay is for caps. You are stating such when you state they make TOO MUCH MONEY. Tell me what the dollar amount is, and I mean give me an EXACT number, that these people should be allowed to make?
@EastToMidwest – “And lastly, I and some other posters are not “disconnected” because we aren’t CEOs. Although, if we were disconnected for that reason, then it would follow that CEOs are disconnected from the effects of their actions on everyday people.
No the real disconnect from reality is that YOU actually think you can be one of these guys. You can’t. You won’t. And they will fuck you over any way they can and you’ll take it with a smile. And that’s sad.”
That is a ridiculous statement. You have already fucked yourself and they didn’t even have to lift a finger. If CEO’s were not concerned about the effects on people the company would not survive, hence they would not be able to steal all of that money. It is not in their best interest to destroy a company or run it into the ground as they are killing their own job, and income, too. In fact, their doing so is much worse than the common worker. If they destroy a company they are less likely to be able to move on to another.
The real disconnect from reality is that you actually think you can not achieve more than what you have already done. You have created your own glass ceiling and probably don’t even realize it. I can, and will, do it and you can not tell me I can not. I may never make it, sure, but I won’t give up as you already have, without even trying.
@Tiber – “Once again, the issue is the fact that the system allows the CEO to have such enormous influence on their own paycheck.”
What is your take on our elected government officials doing the same thing? The fact is, our elected officials really DO NOT NEED any income. Everything in their life is paid for and taken care of by tax payer dollars. CEO’s and large, evil profit-making companies at least actually produce something.
This whole discussion is actually pointless. We have, from what I see, two sides here. There is the side of people who know they are capable of more and strive to achieve that, without forcing other people pay for it. If you don’t understand that then I can’t explain it to you. Then there is the side where some want other people to suffer like them in some ridiculous attempt to bring everyone down to their level so they feel better about not achieving anything on their own.
I will work to achieve what I want and take care of myself and my family. I will not work to give money to someone else so they can sit on their ass and watch American Idol on their big screen and not lift a finger to take care of their self.
Greg-USA
@Greg-USA: Okay, this is going to be my last comment as well. Debates are fun and all, but there comes a point when they just become an exercise in masochism. I’ll still check in if you’d like to respond though.
“I am continually amazed at these pro-socialist comments.”
That’s because your imagining them. I may have some socialist leanings (mainly health care), but I don’t want your money (and I don’t even like American Idol). My philosophy on government is like hiring someone to do a job. I’d rather pay twice as much for someone useful than pay half as much for someone useless.
“@EastToMidwest – “Now, I would like you and this greg fellow to find ONE place in the comments posted by those to whom you replied where anyone makes a statement about salary caps for CEOs.”
Everyone against the high CEO pay is for caps. You are stating such when you state they make TOO MUCH MONEY. Tell me what the dollar amount is, and I mean give me an EXACT number, that these people should be allowed to make?”
You failed to provide a quote, so I’ll do it for you. A simple Ctrl-F reveals that the first mention of “salary cap” is actually EastToMidwest’s comment above! No one ever said they wanted caps at all! Saying that they think someone is over-payed is not the same as wanting caps. It’s like saying, “when does a product cost too much?” It depends on what the product is, it’s quality, usefulness, ease-of-use, etc. There’s no hard limit; you simply call it when you see it.
“I have yet to receive a reply from any of you people against CEO’s whether or not you have ever been in any upper management capacity or owned your own business.”
I already said what my income is; I think it can be inferred that I haven’t. In my defense, I’m still young and doing pretty well considering, so I’ve got my whole life ahead of me if I choose to go that route.
“Should the majority stock holders listen to a few small people and do their bidding when the majority wants something else? No.”
The issue is excessive CEO pay even in the face of failure. It’s been in the news and a great many people are against it. Many companies are reacting and switching to more performance-based pay. You make it sound like a fringe issue and it’s not. I’m actually happy to see that progress is being made.
“It’s also amusing to me when people try to use their education levels and degrees to prop up their position as if they know better than others.”
It’s official. You’ve gone completely insane. No one EVER claimed to do such a thing.
“If CEO’s were not concerned about the effects on people the company would not survive, hence they would not be able to steal all of that money. It is not in their best interest to destroy a company or run it into the ground as they are.”
Comcast has incredibly low customer satisfaction ratings, yet they’re the largest cable provider in the country. Why, because if you want high speed internet, in many areas it’s Comcast or dial-up. I can say with absolute certainty that they’d lose at least $70 a month if I had a comparable alternative.
“If they destroy a company they are less likely to be able to move on to another.”
True, although in the largest companies just their golden parachutes provide enough money that they’re set for life as long as they can take a small hit in their quality of life.
“You have created your own glass ceiling and probably don’t even realize it. I can, and will, do it and you can not tell me I can not. I may never make it, sure, but I won’t give up as you already have, without even trying.”
Did it ever occur to you that it may not be a matter of self-confidence? There are some people who have such a negative view of the corporate world that they wouldn’t take such a job if someone gave it to them.
“What is your take on our elected government officials doing the same thing? … CEO’s and large, evil profit-making companies at least actually produce something.”
I’ve already said that I’m against that too. You really don’t like government do you? I guess police, roads, an army, emergency rescuers, city planners, etc. are all completely useless then?
“This whole discussion is actually pointless. We have, from what I see, two sides here. There is the side of people who know they are capable of more and strive to achieve that, without forcing other people pay for it. If you don’t understand that then I can’t explain it to you. Then there is the side where some want other people to suffer like them in some ridiculous attempt to bring everyone down to their level so they feel better about not achieving anything on their own.”
I know I am capable of more and I try to achieve it, and I don’t want others to pay for it. So I must be on your side then? This is the part where you completely misinterpret everything. If that is what you see, then I recommend an optometrist. It’s like the words are all blurring together, and you have to try and guess what sentence they make, like some sort of Rorshach Test. Only this time there is a correct answer, and your completely missing it.
The issue as I see it, is that CEO’s are taking money out of companies that they shouldn’t be. I don’t think the money needs to be redistributed to workers, I think it should stay in the company’s bank account (what do you know, my agenda isn’t pro-socialist at all!). If an accountant thinks they deserve a cut of the money they count, that’s embezzlement. A CEO is able to take advantage of their authority to do something similar in a legal way. It may not violate the law, but just because something is legal does not make it ethical. If CEO’s were supposed to determine their own pay they would have the authority themselves. Instead they bring in their buddies and take advantage of the system, much like the government does. Do you find it acceptable when the government does? Then why is it acceptable when companies do?
@Tiber – “That’s because your imagining them. I may have some socialist leanings (mainly health care), but I don’t want your money…”
This is my last post. Do you see the contradiction here? I am imagining them, and then you say you have some socialist leanings. Nationwide Healthcare IS socialist. You say you don’t want my money, but who do you think is going to pay for all of this health care? Everyone, whether they want to or not. It’s no different than going to your neighbor’s house and asking them for their money.
“No one ever said they wanted caps at all! Saying that they think someone is over-payed is not the same as wanting caps.”
When people make wide-sweeping all-inclusive statement that CEO’s are paid too much it implies a cap. No one has yet to state the exact amount someone should be allowed to earn. You do realize the company and CEO negotiate pay and incentives, including what will happen if they need to leave the company. It’s not like the CEO makes it up along the way and does as they please while in that position. They have to answer to their board.
“I already said what my income is; I think it can be inferred that I haven’t. In my defense, I’m still young and doing pretty well considering, so I’ve got my whole life ahead of me if I choose to go that route.”
I hope you exceed your own expectation. I truly do. I can guarantee if you get to that level you will see things differently. I also hope when someone tries to take your money away, Nationwide Healthcare for example, that you fight to keep what you earned. I also hope when someone else tells you that you made too much money, and it will happen, that you realize you made the money and they have no right to tell you what you are allowed to make or do with it.
“The issue is excessive CEO pay even in the face of failure. It’s been in the news and a great many people are against it. Many companies are reacting and switching to more performance-based pay. You make it sound like a fringe issue and it’s not. I’m actually happy to see that progress is being made.”
See what I stated above about pay being negotiated before they take office. I am all for performance-based pay but I have no right to tell any company, except my own, how to pay employees. If it causes the company to increase profits that is great, and I will probably buy stock in that company.
“It’s official. You’ve gone completely insane. No one EVER claimed to do such a thing.”
I am not sure who it was, but somewhere in the comments someone eluded to their education and why they understood things we didn’t. My last reply was more general about some of the comments.
“Comcast has incredibly low customer satisfaction ratings, yet they’re the largest cable provider in the country. Why, because if you want high speed internet, in many areas it’s Comcast or dial-up. I can say with absolute certainty that they’d lose at least $70 a month if I had a comparable alternative.”
DSL, satellite, or wireless cards for your laptop. We have many options where I live. I also travel a lot and have many options wherever I go. Maybe your area doesn’t have these yet. Still, some of these companies, like you mention above, will not do anything to improve their performance until they have a threat in their area. That would be the market correcting the problem.
“True, although in the largest companies just their golden parachutes provide enough money that they’re set for life as long as they can take a small hit in their quality of life.”
I would say they have no interest or desire in reducing their quality of life. It makes no sense that they would purposefully ruin a company. There are also things that can affect the profitability of the company that they can not control, such as the market.
“Did it ever occur to you that it may not be a matter of self-confidence? There are some people who have such a negative view of the corporate world that they wouldn’t take such a job if someone gave it to them.”
It absolutely did occur to me. I was in the corporate world for a few years and hated it. I decided to do my own thing so I can decide for myself. Still, none of us have the right to tell these companies how to run their business. If you don’t like them don’t buy from them.
“I’ve already said that I’m against that too. You really don’t like government do you? I guess police, roads, an army, emergency rescuers, city planners, etc. are all completely useless then?”
You are getting things a little mixed up here. I don’t like Big Government and them putting their noses where it doesn’t belong. We need less government control, not more. Socialists think the answer to any problem is government intervention, raise taxes and take away from the rich and give to the poor. There is a reason businesses are not run like the government – it would fail.
Police, army, emergency rescuers and city planners are needed. However, they do not, and should not, tell our citizens how they should live. These two things are completely different.
“I know I am capable of more and I try to achieve it, and I don’t want others to pay for it. So I must be on your side then?”
I hope so. We will all be better off without socialism. Socialism fails every time it is tried yet some think it just hasn’t been done correctly. If you don’t want others to pay for it then you can not be for Nationwide Healthcare.
“The issue as I see it, is that CEO’s are taking money out of companies that they shouldn’t be.”
They can’t just take money out of a company. They can, however, take money out of the company based on the agreement they have with the company.
“I don’t think the money needs to be redistributed to workers, I think it should stay in the company’s bank account…”
If they leave the money in the company’s bank account they get hit with huge taxes. The goal is to NOT have any money in their account at the end of the year. This is why at the end of the year lots of companies spend money to buy stuff they need for the business. If they don’t spend it they will lose it due to taxes.
“Do you find it acceptable when the government does? Then why is it acceptable when companies do?”
These are two completely different things. You need to separate business and government. I do not find it acceptable when government does this. Government, however, does not produce ANYTHING.
Greg-USA
@Greg-USA:
Interestingly, Warren Buffet is possibly the greatest capitalist success story of the 20th century, is CEO of one of the (if not the) most successful holding companies in the world, and has stated many times that most CEO compensation plans are broken.
His solid financial and leadership decisions helped earn the company $118bn in gross revenue last year, and yet his pay is still $100,000/year. He lives in a small house. He does not take out “loans” from the company, and does not utilize company funds for any of his personal business.
He does not have a “golden parachute” or a “golden coffin.” If the company fails, he earns nothing, and he loses a majority of his fortune. Yet, somehow, he has managed to do his job, and extraordinarily well, for nearly 40 years. For a decade prior to that, he managed to make large amounts of money for both himself and others while working for far less.
———-
With regard to corporate finance, it is only in a company’s SHORT-TERM interest to empty the accounts at the end of the fiscal year. I’m not even going to bother explaining this beyond the basics: The more flexibility your company has, the more customers you are capable of retaining.
———-
Governments have one product, and only one… but it is important: Order. That’s the entire purpose of any government, to provide order for the citizens. Situations like this, where everything is out of balance and shows little promise of correction, are precisely the government’s purvey. Is it possible for the government to overstep its bounds and over-regulate? Certainly. It is supposed to be our job to ensure that this does not happen, and that corrections are made to ensure that the government stays within its bounds.