Do you think many of these executives are worth over 500,000 in compensation. If they were not in the position they were in would the company be worth millions less? Is there no one who could adequately do the job they do for much less? I just can’t comprehend how anyone is irreplaceable and worth millions a year. What can one individual do that brings in that much revenue. (I’m talking about executives…not the position traders.)
the effort part of the equation is hard to determine but they definitely put in mountains of time that COULD justify being paid more. If they truly are experts in that industry and put in the time, I think they could easily be worth somewhere in the millions per year assuming their company is successful during those periods.
I think it’s often times less a question of “What did Mr. X do to deserve $XYZ per year?” and more an issue of incentive. Not to Mr. X, necessarily, but to all the people underneath him. From the bottom up, it often seems to be a situation where you see your boss making twice as much as you, and maybe even working fewer hours. So you bust your ass trying to get promoted to the next level, so you can have that. And then you see that if you bust your ass some more, you can double your compensation, again. But if you’re making 10x as much as your boss, would you really want to bust your ass? You wouldn’t have the same incentive to work as hard - you’d merely be doing whatever it took to sustain your position. So from the company’s perspective, they’re investing $20 million in a CEO, and that investment is paying off in the extra ambition (work ethic) displayed by the 10,000 people below him.
i dont see any executive in the auto industry or the banking industry who deserves more than 200K a year all in. our society is an entitlement society. this is how it works: guy is a tobacco farmer. he becomes rich. his son goes to harvard. then his son goes to harvard only because dad went there. this has nothing to do with intellect or talent. he greaudates from harvard and gets a job. kisses ass like its going out of fashion. get promoted. promotes with him a group of incompetent butt-kissing fools. uses lots of gel and wears italian suits. appears to be from a ‘respectable’ background. knows shit. becomes executive and gets a remote control ass wiper. john thains of the world would not even make minimum wage if it werent for the entitlemnt society.
Garbage. Just a “feel-good, were punishing wall street, make us look like we are in-control” stunt by washington. The pay to the CEO should be up the BOD. Shareholders elect the BOD. IF they don’t like it then vote for BOD that will change it. Go ahead cap the compensation at 500k… You don’t get to be the CEO, executive or what not making that kind of money without superb connections. These guys will simply go where the pay is higher and will more than likely be hired. Washington is simply just outgunned in this situation. The only thing they can do now is whine and point fingers at “Greedy” wall st. Govt. is just as bad. Ex/ there were such limited provisions in the TARP funds what did you expect? For everyone to do “the right thing?” Geez… I can’t wait to see the fingerpointing when the Stimulus plan fails. Bunch of morons!
needhelp Wrote: ------------------------------------------------------- > i dont see any executive in the auto industry or > the banking industry who deserves more than 200K a > year all in. > > our society is an entitlement society. this is how > it works: > > guy is a tobacco farmer. he becomes rich. his son > goes to harvard. then his son goes to harvard only > because dad went there. this has nothing to do > with intellect or talent. he greaudates from > harvard and gets a job. kisses ass like its going > out of fashion. get promoted. promotes with him a > group of incompetent butt-kissing fools. uses lots > of gel and wears italian suits. appears to be from > a ‘respectable’ background. knows shit. becomes > executive and gets a remote control ass wiper. > > john thains of the world would not even make > minimum wage if it werent for the entitlemnt > society. the situation got a lot worse when the barbarians gobbled up the white shoe firms in the 70s and 80s. in those days wall street aristocrats were a lot more respectable than what we have today. now there are way too many first generation players who don’t understand the responsibility they’ve been given.
I think everyone should get paid a flat salary of 80K for existing.
UndergradCFA Wrote: ------------------------------------------------------- > I think it’s often times less a question of “What > did Mr. X do to deserve $XYZ per year?” and more > an issue of incentive. Not to Mr. X, necessarily, > but to all the people underneath him. > > From the bottom up, it often seems to be a > situation where you see your boss making twice as > much as you, and maybe even working fewer hours. > So you bust your ass trying to get promoted to the > next level, so you can have that. And then you > see that if you bust your ass some more, you can > double your compensation, again. > > But if you’re making 10x as much as your boss, > would you really want to bust your ass? You > wouldn’t have the same incentive to work as hard - > you’d merely be doing whatever it took to sustain > your position. > > So from the company’s perspective, they’re > investing $20 million in a CEO, and that > investment is paying off in the extra ambition > (work ethic) displayed by the 10,000 people below > him. Never thought about it this way. Good observation.
Compensation is a huge topic for the media. Unfortunately, it seems form the whole bonus debate, the average journalist is at least as incompetent as the average politician. I support UndergradCFAs position. But apart from the $20mil, the same guy should get his ass kicked for good if he fails to deliver. Everything else would be really bad for peoples motivation. Compensation is always only one side of the story, the other is punishment. And punishment, taking true responsibility, has somehow been unevenly distributed: A few entitled individuals never have to face the consequences of their actions, and a sea of other people are getting beaten up for just the slightest glitch. I personally experienced how hard it is in Europe to raise capital once you ran one unsuccessful venture before… For that matter, I think limiting pay to what ever arbitrary number is bull sh1t. People will find ways around it. Equally bad is the whole regulation debate without introducing individual accountability. As a charter-holder I would be personally accountable for my actions, there really is not way to hide behind the back of my boss or firm. This is good and this ethical position is part of what draws me to the CFAI. I somehow feel, that same ethical principle should apply to managers in general. YMMV.