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The gap widens: CEO compensation 275 times the salary of average worker. (http://www.msnbc.msn.com/id/26963309/)

http://www.cleanmpg.com/photos/data/501/Outrageous_CEO_Pay.jpgEve Tahmincioglu - MSNBC – Oct. 1, 2008

To think we are bailing out these ******* :mad: -- Ed.

The guys who ran the recently collapsed Lehman Bros., Merrill Lynch, Bear Stearns, Fannie Mae and Freddie Mac all prove one thing.

You don’t always get what you pay for.

Big paychecks for jobs not well done

Merrill Lynch’s Stanley O’Neal, $46 million.
Bear Stearns' James Cayne, $40 million.
Lehman Bros.’ Richard Fuld, $40 million.
Freddie Mac’s Richard Syron, just shy of $20 million.
Fannie Mae’s Daniel Mudd, $12.2 million.

As the nation’s financial system was crumbling, the CEOs who were in charge of the most troubled financial firms pocketed fat paychecks during their final full year on the job — and that doesn’t include the golden parachutes they got when they walked away.

Public outrage over this disconnect has caused Congress to step in and try to do something about skyrocketing executive compensation. But history shows that government attempts have been weak, at best, when it comes to curtailing CEO riches.

Why? Because regulators never go far enough in giving shareholders a true voice. It’s difficult to break up entrenched boards of directors that make the decisions on executive compensation.

Even the $700 billion bailout package that is fighting for life on Capitol Hill doesn’t have the teeth to put a lid on these financial windfalls, experts say.

Over the past two decades, efforts by government officials to rein in the big payouts, including changes to the tax code and calls for more oversight, have actually contributed to the growth in CEO pay — now 275 times the salary of the average working stiff, according to the Economic Policy Institute… http://www.msnbc.msn.com/id/26963309/

Well... I think what would be fair is for salary caps on CEOs. The executives shouldn't be legally permitted to earn more than 100 times that of the lowest paid employee. I have always found it obscene that in major corporations a handfull of executives (who are useless) make more money than 30,000 front-line employees. That's not democracy and it's not capitalism; it's corporate feudalism.

@Indigo

Rather than 100 times the lowest, they should only get 100 times the average. There is no way that they would need more than 100 times the average.

IMO overpaid CEOs are just as bad if not worse than government waste. They're both an inefficient use of money.

Someone confirm....Japanese CEO benefits are tied to long-term success...no golden parachutes if something like this happened over there.

I beleive the American system is out of control and corrupt? H

@Indigo

Rather than 100 times the lowest, they should only get 100 times the average. There is no way that they would need more than 100 times the average.

IMO overpaid CEOs are just as bad if not worse than government waste. They're both an inefficient use of money.


You've got a good point there. Congressmen get a pretty gilded golden parachute too. And they waste money nearly as well as CEOs, and they're primarily millionaires as well. Fire the CEOs and fire the Congress. Fine by me!

1st page of this google search

japan ceo salary

did not indicate golden parachute in Japan.

DAS

Not only is our system out of control. The nuts at the top are driven by greed. Our country has become a "Corpocracy" (run by the corporations) the number of lobbyist in our country is rediculous and they usually get what they want from congress. Usually to the detriment of the tax payers. As I understand Freddie-Mac and Fannie-mae are quasi -governmental corporations. How did their salaries get to be 10 times more than the President of our country? The Postmaster General is in charge of a multi-Billion dollar operation and he makes less than the Pres.

Hi All,

I think the CEO's of the corporations the government bail's out should have a mandatory reduction of the last 10 years earnings with that company, to a level of personal worth no more than 2 million dollars. I mean, pirates have to give back the booty. What is the difference here ?

Appoint a board of lifestyle experts and determine how much each person should get regardless of how hard they worked to get to the position and then give them a paycheck based on that. Who really needs more than $100,000 a year? Give the rest to some charity or third-world country or something, or just dole it out evenly between every citizen.

Sounds like good incentive to work hard and secure a good position to me!

Now where did that site about fuel economy go???

CEO pay gouging is about stockholder apathy. Speculators and mutual funds (like those in most everybody's 401k's) rarely take an interest in corporate governance, but hold large ownership stakes in most large corporations. This allows fairly small ownership stakes controlled by management to control the board of directors (which often is largely composed of highly compensated senior executives of other firms) and management isn't shy about giving themselves raises. To me, CEO pay gouging makes the stock ownership system seem fictitious because the effective owners of the company appear to be the CEO's not the stockholders.

FWIW most CEO's don't spend long at the top of the heap. Some people have likened becoming CEO to winning first prize in a tournament based on decades of management drudgery. It would seem like better team building to pay the CEO less and spread the prize money around more.

What I recall reading about Japanese executive compensation is that the cash payouts are much smaller than in the US, but that Japanese executives receive lavish (even by US standards) company paid personal perks.

Things look messed up, but I have no clear solution to offer.

To think we are bailing out these ******* :mad: -- Ed.

This is CleanMPG?!

Hi Cfors:

___You should have read what I typed before I added the asterisks :D

___Good Luck

___Wayne

@Ratnose86 (http://www.cleanmpg.com/forums/member.php?u=5043)

You're right. The most important thing for productivity in this country is that the executives are paid 275 times more than their employees.

We should just pay the workers nothing at all, because they should be greatful just to have a place to work. Let the executives take all the money home because hording wealth is the best way to keep an economy working.

In fact why don't you give all your pay check to the ceo of whatever company you work for.

Some of you are going down the Marxist road with your thinking. Increased government regulation is not the answer, it's usually the problem. These "golden parachute" packages are obscene but not illegal. They are part of a legal binding contract between a private corporation and a private citizen. The last thing you want is the government telling private corporations what they can pay a private citizen, even if it's the CEO. Once the federal government gets it's toes in the water they usually begin to ease their way in all the way. We have to stop relying upon the government for all our problems. Think back to when people wanted to ban smoking. At first it was at office buildings and hospitals. Hardly anyone raised a fuss over that. Then they moved to restaurants. Oh that's great some people said while others began to raise a warning flag. Then they banned it in bars. More red flags went up. Now we have some cities that are trying to ban smoking in apartments, town houses, and homes that have children inside. They've even banned smoking on some public beaches and city parks. All that started with going to the government for something that was "for the greater good". You go to the government to deal with CEO pay and you're on a slippery slope downwards. It'll all be fine for you until they start adjusting your pay to help those who don't have a job (usually by choice thanks to a drug addiction). By then it'll be too late to do anything about it.

I've been to countries that were in the process of recovering from being ruled by the USSR. Trust me, you don't want to live under such high levels of government regulation and control.

Hi All,

Allot of you make valid points. But, if the company fails, and the US Government saves it, the US Government has allot of say in exactly what the company has to do to get the saving input from the government. And I think its just reasonable that what is essentially looted gains by top management be to returned the commonwealth of the company. And that the US Government demad that those moneys be returned, or NO DEAL.

Ouch, sounds like the red revolution around here. Big CEO paychecks, bad leaders, and bad decisions leads to failed companies, it is corporate natural selection. The problem comes when the government tries to make them not stupid (regulate them), or when they try to help the stupid (bail outs). Just let them die, let natural selection take care of the stupid companies, the smart and innovative ones will survive and prosper as long as you don't bail out the ones that should die.

Someone confirm....Japanese CEO benefits are tied to long-term success...no golden parachutes if something like this happened over there.

I'm sure it's not 100% any longer, but as a general rule of thumb, this is true.

They tie the pay of the President and top executives in the company to the pay of the lowest. Many top CEO's don't even make near 1 million because of this.

The only way to fight back is to hit them where it hurts! In the pocketbook. Don't buy anything from companies that overpay their CEOs!

Ironically, the last time someone tried to regulate this, is the same time things really went through the roof. Unintended consequences at their finest.

Some of you are going down the Marxist road with your thinking.


I noticed that, too. I was kinda afraid us bourgeousie would be rounded up and shot! :o

The "bailout" is a bailout in name only, and a poor choice for a label. The Great Depression happened when people leveraged their stock buys with margin accounts and got wiped out in an instant as soon as the market headed south. Then the banks failed when there were runs on the banks. Do we really want to go through that again? This "bailout mess" started with Fannie Mae and Freddie Mac doing the politically correct thing and loaning mortgage money to people who couldn't afford expensive houses. Blame Greenspan for feeding the real estate bubble with his stupid-low interest rates.

This morning Warren Buffett, the "Oracle of Omaha," and world's most successful investor, endorsed the government rescue plan. While its not perfect, it beats the hell out of doing nothing, to paraphrase Warren's words.

Our choice is a painful recession, with the rescue plan, or a brutal recession or even depression without it. What'll it be?

Stop all the commie whining... And remember, Freddie Mac and Fannie Mae were solidly Democrat institutions, run by Democrats, one of which is an Obama fiscal advisor... Efforts to clamp down on those two institutions were rejected by the Democrat Congress, so there is plenty of blame on both sides of the aisles in Washington.

Harry

This bailout crap is Marxist to its core, by facilitating a government takeover of institution after institution. Bear Stearns, Indymac, AIG, Lehman, Fannie and Freddie, on down the list.

Any senator who voted for this bailout package should be run out of office.

It includes $182 million in tax breaks for Puerto Rican rum-makers.

$6 million for wooden airplane makers.

And that's just the stuff I remember. So much for tackling earmarks.

If Warren Buffett is in favor of the bailout, so am I. He's much smarter than I am.

Hi Andrew:

___Mr. Buffett was also in favor of increased taxes on the upper income classes as he pays less in payroll taxes than the lady that empties his garbage can. That was a quote from the Charlie Rose interview last night.

___Good Luck

___Wayne

The good old dirty thirty's may be what the world needs? Clean-up time! H

Some of you are going down the Marxist road with your thinking. Increased government regulation is not the answer, it's usually the problem. These "golden parachute" packages are obscene but not illegal. They are part of a legal binding contract between a private corporation and a private citizen. The last thing you want is the government telling private corporations what they can pay a private citizen, even if it's the CEO. Once the federal government gets its toes in the water they usually begin to ease their way in all the way. We have to stop relying upon the government for all our problems. Think back to when people wanted to ban smoking. At first it was at office buildings and hospitals. Hardly anyone raised a fuss over that. Then they moved to restaurants. Oh that's great some people said while others began to raise a warning flag. Then they banned it in bars. More red flags went up. Now we have some cities that are trying to ban smoking in apartments, town houses, and homes that have children inside. They've even banned smoking on some public beaches and city parks. All that started with going to the government for something that was "for the greater good". You go to the government to deal with CEO pay and you're on a slippery slope downwards. It'll all be fine for you until they start adjusting your pay to help those who don't have a job (usually by choice thanks to a drug addiction). By then it'll be too late to do anything about it.

You're saying that government regulation is bad by comparing reregulating the financial markets to city municipalities trying to regulate smoking in restaurants?! Then you label those of us who want accountability, oversight and transparency Marxists?! When you have no reason or moral authority to your argument you resort to ad hominem attacks!? :rolleyes:

This is a colossal financial screw-up that is hurting everyone except the fat cats at the top. Then they want us to bail them out of their screw up with a staggering amount of money to the tune of $700 billion dollars. Then they justify this large scale mugging by telegraphing through the market, "Give us the money or the 401-K gets it!" So yeah you bet we're miffed.

It was the repeal of the Glass-Steagle amendment by Gramm-Leach-Bliley that led to this mess in the first place. Commercial banking and speculative investment firms were separated in 1933 due to this merger between banking and speculative investment firms. Glass-Steagle served the country well for 66 years until this bipartisan assault on the Glass-Steagle led to its repeal in 1999. Phil Gramm wanted it done and so did Bill Clinton through the advice of his former Treasury Secretary and former Goldman-Sachs investor Robert Rubin.

Then the economic God Alan Greenspan created a ballooning market in risky sub prime loans which were allowed to go unregulated to deeply penetrate into the financial sector and were traded back and forth with no oversight. Then the balloon popped and the reckless crew who are educated at the finest schools in the country like the Harvard business school and ought to know better and who constantly wag a finger at the rest of us about moral harm if we are bailed out from our stupid mistakes now want a bail out. Then they bluster about how they still don't want reregulation and any oversight, accountability and transparency on how the money is spent. It takes galaxy size hubris to try and foist these junk assets on the public and tell them by the way it’s going to hurt while they get their golden parachutes. The dirty secret is that this bailout doesn't have meaningful protections against golden parachutes and handouts and the best part is the ones who made the mess get to clean it up.

It failed back in the 1930's when Hoover created the Reconstruction Finance Corporation and this bailout similar in spirit to its 1930's cousin will fail too.

Socialism.. Democracy... Most ideas have good merit until their ideals are spoiled by greed. Government regulation never works as well as people respecting others enough to regulate themselves.

Y'know, a couple of normally abstaining friends, and my *mom*,
are feeling more pressure to vote this year. It still feels
like a token, meaningless gesture done under duress. Diebold
wins elections, people don't win elections. Money rules, the
people don't. And money is hardly immune to massive screwup.
.
_H*

This "bailout mess" started with Fannie Mae and Freddie Mac doing the politically correct thing and loaning mortgage money to people who couldn't afford expensive houses.

Harry


Not quite, Earthling. In 1998, Countrywide sued Fannie Mae because Fannie Mae was only taking the good loans and leaving the subprime loans for the third party lenders. As I recall, Fannie Mae won that suit, but shortly afterwards, the government forced them to reduce their loan requirements.

The government did the same things to the banks. They would be told by auditors that if they didn't make these subprime loans, they would lose their FDIC insurance.

Frankly, I think we should let the whole thing collapse. The fear of this will be so great, business will figure out the answer. Let the current loans mature while severely limiting future loans.

A bailout without curtailing the toxic loan habit is bound to fail anyway.

Gershon

Hi All,

While the bailout is socialist, not sure if its Marxist or not. I do not see a Felix Dzersinki like public official pulling any doeplegangers on anybody.

Any CEO walking out of a failing company with 10's of millions of dollars and does not try to use that money to help the company, from which the money came, is not living a moral existance. I mean, look at George Insul, in the 1930's. He walked out of Comonwealth Edison with a meager retirement, lost everything else. Yet, he was brought up on charges - charges that were dismissed because he did everything he could. But, this is not happening in this day and age. Somehow, these guys leave these companies without any reasonable effort to recapitalise. Its like they went into the companies with the sole purpose of taking the value of the company, and leaving.

The only time a CEO is worth this kinda of money, is when the company succeeds and continues.

While the bailout is socialist, not sure if its Marxist or not. I do not see a Felix Dzersinki like public official pulling any doeplegangers on anybody.

I have my doubts as to whether it's really that socialist. While the old CEOs will be leaving, the bailed out companies are slated to still be run privately by new CEOs, the money is being thrown at companies and the debt itself instead of helping people to pay their bad debt, and, most of all, this isn't being done out of some ideological reason, it's almost purely reactionary.

True, these companies are effectively nationalized, but that's about all it has in common with socialism. For those who believe that any hint of anything socialist means that something is purely socialist (you know, the pigeonholed "brand name" version of socialism), I can see how they will argue that, but diving deeper severely weakens that argument. As I've said before, in terms of economics, this is more akin to fascism than socialism.

The only time a CEO is worth this kinda of money, is when the company succeeds and continues.

Indeed.

Y'know, a couple of normally abstaining friends, and my *mom*,
are feeling more pressure to vote this year. It still feels
like a token, meaningless gesture done under duress. Diebold
wins elections, people don't win elections. Money rules, the
people don't. And money is hardly immune to massive screwup.
.
_H*

Hobbit

Everybody here is pissed about this. There will be a major shake up concerning the the senators and congress peeps.

The bill was bad enough. And then the pork the idiots tied on to it. I will be surprised if some of the folks involved in this aren't shot. I do not support assassination by no means! This is just flat out awful!