39 Responses to ** Are CEO’s too well paid? **

• 21. Katie_Scarlett October 8th 2008 - 14:49:53 |

  matt- Agreed.

  
  

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• 22. bradykp October 8th 2008 - 14:50:52 |

  9 wrote:

  I’m sure it’s not a black-and-white issue, but it’s still infuriating.

  yeah. i mean, i completely share your sentiments, but how do you answer the question of how to pay these people for the great risks they take on in some situations without rewarding them for driving the company into the ground? it’s tough to simply tie compensation to things like stock incentives, because if you talk to any auditor, they’ll tell you the risks associated with that. people will have a short sited view of the company to boost the value of their stock, but might not make better long term decisions for the companies because they know they won’t be around for it.

  it’s hard to offer incentives for people to just behave ethically. there’s some, but they are not always effective.

  it’s sickening when you read some of the things out there though in the news. i love the story about Costco’s CEO though. he makes like $400k/yr. he was interviewed by 20/20 or dateline a few years ago, and they asked him why he takes such a small salary compared to his counterparts. and his response was something like “how much does a family of 5 need to live at a high level of comfort anyways, what would i do with more money”. it was pretty amazing to hear a statement like that.

  
  

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• 23. Tama Murden October 8th 2008 - 14:53:49 |

  Re 16: True, Katie. But what happened to the responsibility (to the other employees, shareholders, etc.) to negotiate a performance-based contract?

  
  

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• 24. bradykp October 8th 2008 - 14:54:00 |

  matt_72 wrote:

  Katie_Scarlett wrote:

  CEO exit packages are most often agreed to at their hiring. I know that is when I’ve seen them (to review!!! I am not a CEO).

  The usually are guaranteed some level of severance (3-3 years worth of salary, some level of benefits, vesting of partially vested options, etc….). Exit packages aren’t tied to performance. It sucks that some get so much in exit packages, but blame the SEC for this one. If company’s weren’t required to disclose what they pay top execs, then maybe they would all stop competing to get the best pay package. I actually think the disclosure of executive pay inflates what these guys get paid b/c everyone looks at the outliers and thinks they are worth that much too.

  it’s true, but shouldn’t investors know this information when evaluating whether or not to buy a stock? this rule only applies to public companies right?

  
  

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• 25. bradykp October 8th 2008 - 14:56:26 |

  being in an audit firm, payroll lists have passed my eyeballs a few times, and some people’s compensation is just disgusting. when you meet these people, and find out you know more than them – and you’re much younger than them – it’s almost scary and entertaining at the same time. not that i meet that many people i think i know more than they do in my line of work – but it happens, and it really shouldn’t.

  
  

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• 26. matt_72 October 8th 2008 - 15:01:36 |

  bradykp wrote:

  matt_72 wrote:

  Katie_Scarlett wrote:

  CEO exit packages are most often agreed to at their hiring. I know that is when I’ve seen them (to review!!! I am not a CEO).

  The usually are guaranteed some level of severance (3-3 years worth of salary, some level of benefits, vesting of partially vested options, etc….). Exit packages aren’t tied to performance. It sucks that some get so much in exit packages, but blame the SEC for this one. If company’s weren’t required to disclose what they pay top execs, then maybe they would all stop competing to get the best pay package. I actually think the disclosure of executive pay inflates what these guys get paid b/c everyone looks at the outliers and thinks they are worth that much too.

  it’s true, but shouldn’t investors know this information when evaluating whether or not to buy a stock? this rule only applies to public companies right?

  Investors want to know, but they should also realize that by asking for all this disclosure it can bite them in the a**. If the information weren’t public, executive pay would probably be much more reasonable (so says a recruiter friend of mine).

  
  

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• 27. Katie_Scarlett October 8th 2008 - 15:11:46 |

  matt_72 wrote:

  Investors want to know, but they should also realize that by asking for all this disclosure it can bite them in the a**. If the information weren’t public, executive pay would probably be much more reasonable (so says a recruiter friend of mine).

  I had a tax law professor tell us the same thing. I believe it.

  
  

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• 28. bradykp October 8th 2008 - 15:31:12 |

  matt_72 wrote:

  bradykp wrote:

  matt_72 wrote:

  Katie_Scarlett wrote:

  CEO exit packages are most often agreed to at their hiring. I know that is when I’ve seen them (to review!!! I am not a CEO).

  The usually are guaranteed some level of severance (3-3 years worth of salary, some level of benefits, vesting of partially vested options, etc….). Exit packages aren’t tied to performance. It sucks that some get so much in exit packages, but blame the SEC for this one. If company’s weren’t required to disclose what they pay top execs, then maybe they would all stop competing to get the best pay package. I actually think the disclosure of executive pay inflates what these guys get paid b/c everyone looks at the outliers and thinks they are worth that much too.

  it’s true, but shouldn’t investors know this information when evaluating whether or not to buy a stock? this rule only applies to public companies right?

  Investors want to know, but they should also realize that by asking for all this disclosure it can bite them in the a**. If the information weren’t public, executive pay would probably be much more reasonable (so says a recruiter friend of mine).

  definitely a good point. it’s a pissing contest. here’s an example. the CEO of a pretty big IT company recently was reported to have installed a safe room in his office with a bathroom door that vaults close and can expel a gas if it is piped into the room. it also had like, 3 foot thick steel walls to prevent assassinations from the street. lots of other crazy things. a friend of mine worked on the construction project, and he said it’s all true. this guy did it because his CEO buddies had some lesser “features” in their offices. it’s one big pissing contest for sure. who’s yacht is bigger, who’s parachute is bigger. it’s all the same shizzle.

  
  

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• 29. ron mexico2 October 8th 2008 - 15:38:29 |

  Katie_Scarlett wrote:

  matt_72 wrote:

  Investors want to know, but they should also realize that by asking for all this disclosure it can bite them in the a**. If the information weren’t public, executive pay would probably be much more reasonable (so says a recruiter friend of mine).

  I had a tax law professor tell us the same thing. I believe it.

  What is the causality there?
  Wages rise to the highest common denominator?
  Non-privacy premium?

  
  

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• 30. willowres October 8th 2008 - 15:56:23 |

  Most CEO’s of international companies are forever in a jet travelling to or from meeting customers. If you’re a CEO you don’t get a home life so you can’t begrudge them decent pay.

  However Paulson’s pay was obscene – no amount of travelling justifies that.

  It does make me laugh that the people who fkd everything up will now be the ones to sort it out. Ironic (or jobs for the boys…)

  
  

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• 31. kBRADSHAW16 October 8th 2008 - 16:37:36 |

  HOW DO I GET TO BE A CEO OF A COMPANY LIKE THIS?

  I will take one balloon payment, and promise to never waste investors money again…

  20 million could certainly help with this months rent!

  
  

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• 32. Tama Murden October 8th 2008 - 17:09:17 |

  Re 16., 23., 27: Katie?

  
  

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• 33. matt_72 October 8th 2008 - 17:21:35 |

  Tama Murden wrote:

  Re 16: True, Katie. But what happened to the responsibility (to the other employees, shareholders, etc.) to negotiate a performance-based contract?

  If you read the financial filings, you will notice that most contracts have bonus structures tied to performance. They don’t tell you what the performance metrics are specificially, but they do loosely describe them. Severance is NOT tied to performance. The exit packages these execs have are largely either severance related or a buyout of stock options that were granted in previous years for meeting performance benchmarks set by the board in those years.

  By the way – much of the compensation listed up above was in the form of stock or stock options. I would be willing to bet that those guys lost much of the value embedded in that equity related compensation if they were dumb enough to hold on to their shares…….

  
  

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• 34. bradykp October 8th 2008 - 17:25:09 |

  matt_72 wrote:

  Tama Murden wrote:

  Re 16: True, Katie. But what happened to the responsibility (to the other employees, shareholders, etc.) to negotiate a performance-based contract?

  If you read the financial filings, you will notice that most contracts have bonus structures tied to performance. They don’t tell you what the performance metrics are specificially, but they do loosely describe them. Severance is NOT tied to performance. The exit packages these execs have are largely either severance related or a buyout of stock options that were granted in previous years for meeting performance benchmarks set by the board in those years.

  By the way – much of the compensation listed up above was in the form of stock or stock options. I would be willing to bet that those guys lost much of the value embedded in that equity related compensation if they were dumb enough to hold on to their shares…….

  i thought it said that it was take home pay and it defined that as including cashed out options. it doesn’t look like the numbers above include the uncashed options. unless i read it wrong.

  
  

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• 35. matt_72 October 8th 2008 - 17:33:23 |

  There is an etc…. at the end of that sentence. For example, I don’t think Fuld took that much cash out of Lehman. He sold a whole bunch of his shares for almost nothing soon after Lehman impladed. Mozillo did cash out a ton of his shares, not sure about the rest.

  
  

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• 36. bradykp October 8th 2008 - 20:03:39 |

  matt_72 wrote:

  There is an etc…. at the end of that sentence. For example, I don’t think Fuld took that much cash out of Lehman. He sold a whole bunch of his shares for almost nothing soon after Lehman impladed. Mozillo did cash out a ton of his shares, not sure about the rest.

  true. gotta hate the etc….

  oh well. fuld was compensated much more though if you include all his stocks. that’s why i thought it was lower.

  
  

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• 37. RadioIrish.Com October 9th 2008 - 18:26:43 |

  New York’s Only Irish Station RADIO IRISH has commented:

  http://www.youtube.com/watch?v=iSRrYM9KW1Q

  RADIOIRISH.COM
  http://www.RadioIrish.com

  
  

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• 38. Tama Murden October 10th 2008 - 00:21:02 |

  Re 37.: Ummm, no. RadioIrish hasn’t “commented.” RadioIrish has simply read 411 text aloud. That’s not commentary. But nice to give 411 so many on-air plugs.

  
  

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• 39. bradykp October 10th 2008 - 07:47:09 |

  Tama Murden wrote:

  Re 37.: Ummm, no. RadioIrish hasn’t “commented.” RadioIrish has simply read 411 text aloud. That’s not commentary. But nice to give 411 so many on-air plugs.

  lol
  that was terrible

  
  

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