http://articles.moneycentral.msn.com/Inves...AverageJoe.aspx
It appears to me, that CEO salaries are not reflective of market demand or performance anymore- since actually being a complete and utter failure while being a CEO is still VERY lucrative
"And it's not clear that all of their CEOs were earning their keep. Take the top earner last year, then-Yahoo (YHOO, news, msgs) CEO Terry Semel. He got $71.7 million, chiefly in options grants. He also cashed in $19 million worth of options. That's a lot of loot. From a shareholder perspective, it's tough to argue that Semel earned it.
Yahoo's stock is lower now than it was at the start of 2004, while the Standard and Poor's 500 index ($INX)has advanced more than 30% in the same time period. Semel stepped down as CEO in June because of shareholder dissatisfaction with his company's performance. "
And this:
Why the gap?
Apologists for highly paid CEOs argue they are merely getting the pay they deserve for their talents. Their pay is determined freely by the laws of supply and demand in the marketplace. Right?
There might be more to it than that. For one thing, U.S. execs make three times as much as their European counterparts, even though these European bosses manage companies that are 40% bigger. (The top 20 highest-paid execs at U.S. public companies made $36.4 million on average last year, while the same group in Europe got just $12.5 million on average.)
Yet, presumably, companies on both continents draw from similar talent pools in terms of education, work experience and cultural background. If that's true, it's hard to accept the notion that rich pay in the U.S. is the result of a scarcity of talent.
Next, CEO pay in the U.S. has grown to become 364 times the average worker's pay. It was just 40 times the average pay in 1980. It's hard to imagine that top leadership skills have grown so much scarcer in the past 27 years.
Many pay analysts suspect the bloated pay packages for U.S. execs are more the result of a marketplace failure than the basic laws of supply and demand from Econ 101. Exorbitant pay packages are often awarded by board compensation committees that are too cozy with CEOs, believes Paul Hodgson, an executive-compensation expert at the Corporate Library. They also fail to link pay to performance, which makes it easier for pay to spiral higher, he says.
What that also means is this- even though they did a horrible job, lost millions, cost thousands of jobs, and was basically an all around loser- say the next CEO comes in, does a turnaround- then the loser CEO still gets a HUGE payday due to the stock options!
Normally in business, as far as capitalism, the biz fails big, you fail big- but not so at all with a "publically owned company".
So my questions are:
Are CEOs any product of a capitalist society, or are they a product of CEOs being able to have a hand in writing the laws that regulate them, due to long time lobbying and such?
Should there be a law allowing stock holders to easily retreive the money from poor performing CEOs?
Should there be a tax on CEO salaries when they perform badly, on thier benefits when they leave?
If no to any of the above- since thier salaries seem to operate outside the usual 'rules' of capitalism- what would you do to combat this, or does it even need to be fought in the first place?
Bonus Question- Is this wealth without risk?
It appears to me, that CEO salaries are not reflective of market demand or performance anymore- since actually being a complete and utter failure while being a CEO is still VERY lucrative
"And it's not clear that all of their CEOs were earning their keep. Take the top earner last year, then-Yahoo (YHOO, news, msgs) CEO Terry Semel. He got $71.7 million, chiefly in options grants. He also cashed in $19 million worth of options. That's a lot of loot. From a shareholder perspective, it's tough to argue that Semel earned it.
Yahoo's stock is lower now than it was at the start of 2004, while the Standard and Poor's 500 index ($INX)has advanced more than 30% in the same time period. Semel stepped down as CEO in June because of shareholder dissatisfaction with his company's performance. "
And this:
Why the gap?
Apologists for highly paid CEOs argue they are merely getting the pay they deserve for their talents. Their pay is determined freely by the laws of supply and demand in the marketplace. Right?
There might be more to it than that. For one thing, U.S. execs make three times as much as their European counterparts, even though these European bosses manage companies that are 40% bigger. (The top 20 highest-paid execs at U.S. public companies made $36.4 million on average last year, while the same group in Europe got just $12.5 million on average.)
Yet, presumably, companies on both continents draw from similar talent pools in terms of education, work experience and cultural background. If that's true, it's hard to accept the notion that rich pay in the U.S. is the result of a scarcity of talent.
Next, CEO pay in the U.S. has grown to become 364 times the average worker's pay. It was just 40 times the average pay in 1980. It's hard to imagine that top leadership skills have grown so much scarcer in the past 27 years.
Many pay analysts suspect the bloated pay packages for U.S. execs are more the result of a marketplace failure than the basic laws of supply and demand from Econ 101. Exorbitant pay packages are often awarded by board compensation committees that are too cozy with CEOs, believes Paul Hodgson, an executive-compensation expert at the Corporate Library. They also fail to link pay to performance, which makes it easier for pay to spiral higher, he says.
What that also means is this- even though they did a horrible job, lost millions, cost thousands of jobs, and was basically an all around loser- say the next CEO comes in, does a turnaround- then the loser CEO still gets a HUGE payday due to the stock options!
Normally in business, as far as capitalism, the biz fails big, you fail big- but not so at all with a "publically owned company".
So my questions are:
Are CEOs any product of a capitalist society, or are they a product of CEOs being able to have a hand in writing the laws that regulate them, due to long time lobbying and such?
Should there be a law allowing stock holders to easily retreive the money from poor performing CEOs?
Should there be a tax on CEO salaries when they perform badly, on thier benefits when they leave?
If no to any of the above- since thier salaries seem to operate outside the usual 'rules' of capitalism- what would you do to combat this, or does it even need to be fought in the first place?
Bonus Question- Is this wealth without risk?
QUOTE(CruisingRam @ Nov 9 2007, 11:39 PM) 
So my questions are:
Are CEOs any product of a capitalist society, or are they a product of CEOs being able to have a hand in writing the laws that regulate them, due to long time lobbying and such?
Should there be a law allowing stock holders to easily retreive the money from poor performing CEOs?
Should there be a tax on CEO salaries when they perform badly, on thier benefits when they leave?
If no to any of the above- since thier salaries seem to operate outside the usual 'rules' of capitalism- what would you do to combat this, or does it even need to be fought in the first place?
Bonus Question- Is this wealth without risk?
Are CEOs any product of a capitalist society, or are they a product of CEOs being able to have a hand in writing the laws that regulate them, due to long time lobbying and such?
Should there be a law allowing stock holders to easily retreive the money from poor performing CEOs?
Should there be a tax on CEO salaries when they perform badly, on thier benefits when they leave?
If no to any of the above- since thier salaries seem to operate outside the usual 'rules' of capitalism- what would you do to combat this, or does it even need to be fought in the first place?
Bonus Question- Is this wealth without risk?
I have no idea if its purely capitalism at work. Personally I don’t know how discrete one can get with that information. Do CEO's in Florida operate different from those in California?
I think soon as the bundle of variables gets to large the ability realistically control such becomes a horizon so much more difficult to reach, or the more attempts to do such have to work really. Personally I think if you can just get rid of corruption such as company public relation its a big win, the next being having companies perform environmentally sound business. That one might make it more or less in 250 years.
Well if the CEO is the original owner/founder or inventor. His or her pay should reflect basic freedom to pay him or herself whatever. Obviously this could mean crushing the economy, so as you ask if the company is public, I could only see such behavior as some aspect of corruption from all the involved liberty.
Again depends on the environment. I mean the reality for a place of 100 employees is going to be vastly different then some place that hires thousands upon thousands. This of course also reflects in whatever niche the company is occupying. Such as Wal Mart. I mean that company alone shows the real connectivity of such on the surroundings. I think though the reality is having boards of people charged via certain laws to conduct business in a certain fashion that’s healthy in many angles is something that could work. Whatever system though would still have to account or allow in large freedom for the company, I would still retain that idea.
I do think this is risky behavior, I mean my water stops boiling if I cant pay the pills, so why is this any different.
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