Something liberals should really be mad about...
... and fiscally conscious Conservatives should as well
from 
JoeUser Forums
JoeUser Forums
MSN Money has a new article out, speaking about the 5 most overpayed CEOs and their compensation levels. For most of them, the compensation they received continued to be in the stratosphere while the companies they were leading saw much of their own value in serious decline. Workers lost jobs as the companies lost money, but the CEOs continued to rake in the bucks for fear they make take their failing act on the road to another organization.
On the one hand, having a CEO leave a company that is underperforming, or at least is not performing well in the market can be a very bad sign. It can spook investors, cause panic among employees that wonder in which direction the company will head under new leadership, and can cause massive turmoil if a new CEO comes in and totally changes the direction a company is headed. A CEO sets direction for a company, and their vision normally very much affects the culture of a company.
But, as a normally (despite what some may think of me here at Joeuser.com {smile}) reasonable individual, I'm left to wonder if, in many cases, it may have been a much smarter thing for these companies (and many others) to jump off the never-ending wheel over CEO over-compensation for under-performance, and instead jump over onto the tracks of fiscal responsibility and reasonableness.
During the go-go-go late 1990's, just about anyone could be the "winning" CEO of a company. The market was booming, and there was serious competition among companies trying to hire away the successful CEOs of other companies, or at least protect their own investment in their own CEOs by over-compensating them so they would not leave for greener pastures. The problem is that in many cases, the numbers that were being reported were either intentionally inflated and wrong, or just wrong because there was never time to do the actual accounting that was supposed to be done, and instead a bunch of overly optimistic estimates were done and used. (Not exactly what happened, but reasonably close enough to make my point).
In places like WorldCom, Enron and a host of others, this all became obvious in the succeeding years.
Anyway, the article below provides plenty for both sides (liberals and conservatives) to be mad about. On the one hand, liberals can be mad about the obscene amounts of money that are paid to these CEOs. In most cases, the compensation for the CEO is several times (as a multiple) the compensation of the average end worker. A CEO may get compensation in the $50 - $150 million range, while their average employee is raking in a whopping total of say $36,000 a year.
Further, of course, the liberals (or should I say social progressives) can and should be upset because the highly compensated CEO has the advantage of tax lawyers, accountants, and others to help shelter his (or her) income and winds up paying only a small percentage of their income off in taxes.
Fiscally conscious conservatives should be upset in just looking at the real numbers. Instead of having the stockholders rewarded, or having the company enrichining itself by reinvesting in R&D or other worthwhile areas, they instead see the company handing out large amounts of it's own income as salary and other compensation for these over-paid CEOs.
Anyway, the original article is well worth reading and discussing. Please feel free to smack me around from either side of the argument.
The 5 most outrageously overpaid CEOs
Here’s the pantheon of execs whose paychecks soar while their companies suffer. Also: 5 who produce stellar results for a comparative pittance.
By Michael Brush
All's fair, they say, in love and war. Not much is out of bounds when it comes to executive pay, either.
Consider Michael Ovitz. Although stockholders sued, the one-time Hollywood superagent gets to keep the $140 million he was paid for 14 months of work as president at Walt Disney (DIS, news, msgs). A Delaware judge ruled in mid-August that Disney's board didn't breach its responsibilities in awarding the huge severance package.
While the Ovitz payout may have been legal, it's the type of corporate behavior that costs investors millions of dollars every year. And it's not just a few spendthrift companies throwing good dollars after bad leaders. We scoured corporate regulatory filings and found plenty of examples of overpaid underachievers in executive suites. Ultimately, we came up with a list of the five most overpaid bad chief executives, and another of the five most underpaid good execs.
{snip}
Fat pay, thin performance
Rather than focus on single-year offenders, we rounded up -- with help from Standard & Poor's -- the worst performing stocks in the S&P 1,500 over the past several years.
{snip}
The worst offenders
The upshot: Some boards award breathtakingly large pay packages to CEOs even as the executives trash their shareholders’ investments. The worst:
“I feel nothing but contempt,” says Don Hodges, president of the Hodges Fund (HDPMX). “They pay themselves like they are rock stars.”
... much more at original article.... including several companies and CEOs who seem to be doing things right
On the one hand, having a CEO leave a company that is underperforming, or at least is not performing well in the market can be a very bad sign. It can spook investors, cause panic among employees that wonder in which direction the company will head under new leadership, and can cause massive turmoil if a new CEO comes in and totally changes the direction a company is headed. A CEO sets direction for a company, and their vision normally very much affects the culture of a company.
But, as a normally (despite what some may think of me here at Joeuser.com {smile}) reasonable individual, I'm left to wonder if, in many cases, it may have been a much smarter thing for these companies (and many others) to jump off the never-ending wheel over CEO over-compensation for under-performance, and instead jump over onto the tracks of fiscal responsibility and reasonableness.
During the go-go-go late 1990's, just about anyone could be the "winning" CEO of a company. The market was booming, and there was serious competition among companies trying to hire away the successful CEOs of other companies, or at least protect their own investment in their own CEOs by over-compensating them so they would not leave for greener pastures. The problem is that in many cases, the numbers that were being reported were either intentionally inflated and wrong, or just wrong because there was never time to do the actual accounting that was supposed to be done, and instead a bunch of overly optimistic estimates were done and used. (Not exactly what happened, but reasonably close enough to make my point).
In places like WorldCom, Enron and a host of others, this all became obvious in the succeeding years.
Anyway, the article below provides plenty for both sides (liberals and conservatives) to be mad about. On the one hand, liberals can be mad about the obscene amounts of money that are paid to these CEOs. In most cases, the compensation for the CEO is several times (as a multiple) the compensation of the average end worker. A CEO may get compensation in the $50 - $150 million range, while their average employee is raking in a whopping total of say $36,000 a year.
Further, of course, the liberals (or should I say social progressives) can and should be upset because the highly compensated CEO has the advantage of tax lawyers, accountants, and others to help shelter his (or her) income and winds up paying only a small percentage of their income off in taxes.
Fiscally conscious conservatives should be upset in just looking at the real numbers. Instead of having the stockholders rewarded, or having the company enrichining itself by reinvesting in R&D or other worthwhile areas, they instead see the company handing out large amounts of it's own income as salary and other compensation for these over-paid CEOs.
Anyway, the original article is well worth reading and discussing. Please feel free to smack me around from either side of the argument.
The 5 most outrageously overpaid CEOs
Here’s the pantheon of execs whose paychecks soar while their companies suffer. Also: 5 who produce stellar results for a comparative pittance.
By Michael Brush
All's fair, they say, in love and war. Not much is out of bounds when it comes to executive pay, either.
Consider Michael Ovitz. Although stockholders sued, the one-time Hollywood superagent gets to keep the $140 million he was paid for 14 months of work as president at Walt Disney (DIS, news, msgs). A Delaware judge ruled in mid-August that Disney's board didn't breach its responsibilities in awarding the huge severance package.
While the Ovitz payout may have been legal, it's the type of corporate behavior that costs investors millions of dollars every year. And it's not just a few spendthrift companies throwing good dollars after bad leaders. We scoured corporate regulatory filings and found plenty of examples of overpaid underachievers in executive suites. Ultimately, we came up with a list of the five most overpaid bad chief executives, and another of the five most underpaid good execs.
{snip}
Fat pay, thin performance
Rather than focus on single-year offenders, we rounded up -- with help from Standard & Poor's -- the worst performing stocks in the S&P 1,500 over the past several years.
{snip}
The worst offenders
The upshot: Some boards award breathtakingly large pay packages to CEOs even as the executives trash their shareholders’ investments. The worst:
- Top honors go to Gary Smith at Ciena (CIEN). His shareholders have been virtually wiped out -- losing 93% in the past four years. His compensation over that period: $41.2 million.
- Jure Sola, the CEO and chairman at Sanmina-SCI (SANM) collected $26.4 million during the past four years while Sanmina shares fell 78%. The bulk of Sola's pay came in the form of a performance bonus of $19.9 million, paid for hitting one recent quarter's targets.
- Sun Microsystems (SUNW) paid Scott McNealy, its CEO, chairman and founder, $13.1 million a year over the past four years, even as Sun's shareholders lost 76% of their money.
- Shares of supermarket chain Albertson's (ABS) fell 39% over the past four years. Despite this dismal record, Albertson’s CEO and Chairman Larry Johnston collected a total of $76.2 million in that time.
- Under CEO Peter Dolan’s watch at Bristol-Myers Squibb (BMY), shareholders have seen the stock decline by 48% over the past four years. Dolan took home $41 million.
“I feel nothing but contempt,” says Don Hodges, president of the Hodges Fund (HDPMX). “They pay themselves like they are rock stars.”
... much more at original article.... including several companies and CEOs who seem to be doing things right
