ceo payouts are an outrage?

[blackblade]

I also think it is sort of foolish that people claim the shareholders have a real choice over the direction of the company as generally (and I do mean generally) the board of directors, together, has enough stake in the company to assure that they remain the board of directors and they can hire whoever the fuck they want.

Not exactly. If the company goes in a direction that the general public deems unfavorable, shareholders will pull their stake faster than you can say "Market Crash."

While it isn't enough to bankrupt a company, that's $X that suddenly is no longer available to them, in addition to making a director's "stake" worth less. Worse yet, if you fuck up really bad, that money could find it's way into a competitor's hand.

It's true that they probably don't get much say up front, and they're not really going to be able to band together to make major changes to a company's structure. But they'll bail at the first sign of trouble, fo sho.

Ultimately, it's their money. If they want to pay a CEO an absurd amount of money to run the company, that's all there is to it. If it means they've gotta lay off staff to pay him, that just says volumes about the workplace to begin with.

[Deleted]

Small percentage?

You should probably be aware that most companies are owned, in large part, by institutional investors such as mutual funds and hedge funds whose job it is to make as much money for THEIR clients (You) as possible. So if a CEO is doing a shitty job there's a better than average chance the institutions will vote the guy out. Or they'll vote the board members that keep renewing his contract out.

And why on earth would or should you have any power over how a private corporation spends its money? What? You want to dictate a maximum salary? So a truly great CEO like Lee Iacocca would only be able to be paid the same amount as the guy who sank BAC? It's unbelievable what some lefties can mistake for "good ideas" sometimes.

Great there's a reason why things are how they are.That instantly makes everything fine I guess?
I like how you argue yourself.We're barely agreeing in this topic if the ceo payouts are too high or not and you're talking about specific ways to reduce their salaries?No one has talked about that.But there you go,it seems like you enjoy bashing the imaginary enemy you made up for yourself.

[yurano]

I also think it is sort of foolish that people claim the shareholders have a real choice over the direction of the company as generally (and I do mean generally) the board of directors, together, has enough stake in the company to assure that they remain the board of directors and they can hire whoever the fuck they want.

Not exactly. If the company goes in a direction that the general public deems unfavorable, shareholders will pull their stake faster than you can say "Market Crash."

Its more than that, a small shareholder can choose not to invest in the company at all. As a shareholder, its your money and there are plenty of companies in which you can invest in.

The big guns that chose the CEO also have the most at stake (absolute). If you as a shareholder, don't think the big guns and/or the CEO are doing a good job, you can choose to invest in another company.

[Rhyseh]

What the split should look like: 60% 30% 20%.

What it really looks like: 99%, 0.8% and 0.2%.

[obdigore]

Not exactly. If the company goes in a direction that the general public deems unfavorable, shareholders will pull their stake faster than you can say "Market Crash."

While it isn't enough to bankrupt a company, that's $X that suddenly is no longer available to them, in addition to making a director's "stake" worth less. Worse yet, if you fuck up really bad, that money could find it's way into a competitor's hand.

It's true that they probably don't get much say up front, and they're not really going to be able to band together to make major changes to a company's structure. But they'll bail at the first sign of trouble, fo sho.

Ultimately, it's their money. If they want to pay a CEO an absurd amount of money to run the company, that's all there is to it. If it means they've gotta lay off staff to pay him, that just says volumes about the workplace to begin with.

Do you think the 'general public' has any kind of share, or even knowledge, of what companies their Mutual Funds have stakes in? Especially the 'low-risk' funds that pretty much spread out and have a little bit of everything so they don't lose any money, and make little more than annual interest rate increases for the people who put their money in them?

And 'bailing' just has people sell to other people. You can't just magically unload stock if no one wants to buy it. Also, generally, CEO's have people who write bullshit for them to spew to try to calm investors until the company goes absolutely bankrupt. I would also speculate that a lot of stock prices are now based on private investors thoughts (day traders) instead of any actual worth in the company, but then I'll start bitching about the herd mentality of people.

[Rosse88]

Great there's a reason why things are how they are.That instantly makes everything fine I guess?
I like how you argue yourself.We're barely agreeing in this topic if the ceo payouts are too high or not and you're talking about specific ways to reduce their salaries?No one has talked about that.But there you go,it seems like you enjoy bashing the imaginary enemy you made up for yourself.

He didn't argue himself. He said that people with more knowledge on the situation have the ability to vote a failure of a CEO out. And it does happen. You, however, have no business making such a decision. And I do mean most people posting here. At the point in which stock becomes a large part of fiscal focus, they are often at or approaching the international scene. So many important factors abound.

And you really should clarify. If you have issues with publicly owned companies, buy upwards of 30% stock in a company to have ownership. Outside of that, you have no right to complain about it. And you certainly cannot complain about private companies.

Also, Rhyseh, your ideal breakdown means you're stealing 10% from even more people.

[Deleted]

What the split should look like: 60% 30% 20%.

What it really looks like: 99%, 0.8% and 0.2%.

Nice to see someone that has the courage to post their ratio.I have yet to see someone in the thread posting the latter example you gave.

[Rosse88]

Nice to see someone that has the courage to post their ratio.I have yet to see someone in the thread posting the latter example you gave.

Because that last example makes no sense. Do you honestly think all the money a company makes goes to a CEO? If it did, it would collapse in days (seriously). You have expansion, legal fees, R&D, healthfunds, maintenance, etc. Most of the money you have for salaries is the bottom 40% if that.

[Deleted]

He didn't argue himself. He said that people with more knowledge on the situation have the ability to vote a failure of a CEO out. And it does happen. You, however, have no business making such a decision. And I do mean most people posting here. At the point in which stock becomes a large part of fiscal focus, they are often at or approaching the international scene. So many important factors abound.

And you really should clarify. If you have issues with publicly owned companies, buy upwards of 30% stock in a company to have ownership. Outside of that, you have no right to complain about it. And you certainly cannot complain about private companies.

The thread is not about the voting out of a CEO.And he did argue himself in the 2nd part of his post.
First I'd like to know in what ratio you would divide the 100 000$ between the ceo,the doctor and the electrician.
Secondly me,so you mean the middle class have no right to complain about companies?
You are an hypocrite.You are enjoying a nice life because the government keeps the companies on a leash.
The places where the companies tend to ''not be complained at by people like me'' are situated in the third world.

[yurano]

Most of the money you have for salaries is the bottom 40% if that.

It depends on the business but Rosse88's right: a CEO getting paid big bucks is also managing an enormous pie.

For example, Yahoo!'s CEO makes roughly 25M/year, but she's in charge of a 5B/year revenue stream.

[Deleted]

Because that last example makes no sense. Do you honestly think all the money a company makes goes to a CEO? If it did, it would collapse in days (seriously). You have expansion, legal fees, R&D, healthfunds, maintenance, etc. Most of the money you have for salaries is the bottom 40% if that.

Did you properly read the main post?The ratio is not about what a company makes.

[yurano]

Did you properly read the main post?The ratio is not about what a company makes.

The main post doesn't talk about scenario. In particular, there are millionaire CEOs and there are sub-millionaire CEOs. There are even CEOs that don't break 6 digits (stocks and such included).

A person is paid as much as the hirer thinks they are worth. This is how it has always been and how it will always be.

[Deleted]

The main post doesn't talk about scenario. In particular, there are millionaire CEOs and there are sub-millionaire CEOs. There are even CEOs that don't break 6 digits (stocks and such included).

A person is paid as much as the hirer thinks they are worth. This is how it has always been and how it will always be.

Are we on the same page?Yes there is a scenario.The one I gave it's simple.You divide 100 000$ between ceo,doctor and electrician.
What are you ranting on?

[Rhyseh]

Because that last example makes no sense. Do you honestly think all the money a company makes goes to a CEO? If it did, it would collapse in days (seriously). You have expansion, legal fees, R&D, healthfunds, maintenance, etc. Most of the money you have for salaries is the bottom 40% if that.

The question didn't stipulate circumstance or where this $100,000 was coming from. Since it's talking about payouts, bonuses and salaries; it is logical to assume that this figure is simply dedicated as some kind of performance bonus or pay rise. Which in most cases will go to the CEO.

[Rosse88]

Did you properly read the main post?The ratio is not about what a company makes.

Im going to be honest, no, I didn't bother to read much of it as these threads are generally all the same. It goes along the lines of "unfair this, unfair that".

As for your CEO, doctor, electrician question, its entirely situational. I would need to know what stage the scenario was at, how talented each are, and so forth. But to add a small hitch that that argument, you have to pay a company for the electrician as all medium to large companies with employee counts are required to use a licensed/union electrician usually. So I would take the 100k and deal it about 50/30/20 in there about.

Also, Im entirely serious you have no right to complain about the company. If you don't like it, start your own. Everyone else did. It has taken me years to get to where I am currently with this company. I did the scrounging for cash, I found the talent, I did all the original products, all the patent fees, and the list goes on. When you have invested all of that, feel free to complain. Until then, if you work for me, you abide by my vision and action within the company. Same could be said for every company just about.

[Deleted]

The question didn't stipulate circumstance or where this $100,000 was coming from. Since it's talking about payouts, bonuses and salaries; it is logical to assume that this figure is simply dedicated as some kind of performance bonus or pay rise. Which in most cases will go to the CEO.

No it's no bonus it's no nothing.There's no logic.You just have 100 000$ and you divide it,no questions asked.
Not ranting you but I'm trying to prevent misunderstanding for others.

[yurano]

Are we on the same page?Yes there is a scenario.The one I gave it's simple.You divide 100 000$ between ceo,doctor and electrician.
What are you ranting on?

Here's the problem with your poorly detailed scenario:

CEO - what qualifications? how many people does he manage? what type of business does he manage? what is the revenue stream that the CEO manages?

Doctor - what type of doctor? surgeon? general practice? how many people does the doctor manage? how many doctors does this doctor manage? whats the revenue stream that this doctor manages?

Electrician - what qualifications? how many people does he manage? what is the revenue stream/importance of his job?

A CEO thats in charge of a 2 man start up might not even worth $1000 (USD) where as a doctor can be worth anywhere from 50k to millions (USD) depending on the type of doctor and capabilities (eg. legendary heart surgeon). The same logic goes for the electrician. Just because he's an electrician doesn't mean he can't make big bucks managing other electricians. It also doesn't mean he's necessarily worth a certain amount, especially if he's a terrible electrician.

What I'm going on about is the fact that arbitrarily assigning numbers based on very generalized occupational names makes absolutely no sense at all. Like I've said before, a person is paid as much as the hirer thinks the person is worth. This is heavily dependent on scenario which includes but is not limited to the following: qualifications, demonstrated capability, number of people managed, and size of revenue stream.

[Rosse88]

No it's no bonus it's no nothing.There's no logic.You just have 100 000$ and you divide it,no questions asked.
Not ranting you but I'm trying to prevent misunderstanding for others.

I should also bring up that preventing any logic in fact makes this debate pointless. People are paid by the worth of their action. You also picked odd professions. A CEO is judged by the results of a 1 to 2 fiscal years (upwards of 5 pending on the situation). A Doctor is paid based on the procedure. An electrician is paid on average a flat fee. So the electrician, while paid well, will be either second or last on the payout. The CEO would be highest as it a single payout, and the doctor will usually land up middle to last (always last if you include insurances or pro-bono work).

[Rhyseh]

No it's no bonus it's no nothing.There's no logic.You just have 100 000$ and you divide it,no questions asked.
Not ranting you but I'm trying to prevent misunderstanding for others.

You take away logic, reasoning and qualifying material and you will end up with a split of 33.33333333333333333333333333333333333333333333333% each. I don't understand what purpose such a question serves, seeing as the real world has logic, reasoning, qualifying material and risk. All of these (and many other factors) play a factor is distribution of wealth.

[Deleted]

Im going to be honest, no, I didn't bother to read much of it as these threads are generally all the same. It goes along the lines of "unfair this, unfair that".

As for your CEO, doctor, electrician question, its entirely situational. I would need to know what stage the scenario was at, how talented each are, and so forth. But to add a small hitch that that argument, you have to pay a company for the electrician as all medium to large companies with employee counts are required to use a licensed/union electrician usually. So I would take the 100k and deal it about 50/30/20 in there about.

Also, Im entirely serious you have no right to complain about the company. If you don't like it, start your own. Everyone else did. It has taken me years to get to where I am currently with this company. I did the scrounging for cash, I found the talent, I did all the original products, all the patent fees, and the list goes on. When you have invested all of that, feel free to complain. Until then, if you work for me, you abide by my vision and action within the company. Same could be said for every company just about.

''So I would take the 100k and deal it about 50/30/20 in there about.''
Following your own logic,paying a CEO millions compared to the other workforce is unreasonable.Yet you find it weird we're complaining?Hypocrite or I'm missing something?

Nobody has the right to complain about your company.Sure.Society didn't help you by maintaining a healthy economic climate into which you can run your company?
Police/military to provide safety for your business?
International trade agreements,economical agreements....
Economical policies to protect starting companies/citizens from the tons of dangers of pure capitalism.
Those actual patents,aren't you glad there's such a system?
A healthy working populace,who are educated and the building stone of any company?
Hell there are certainly hundreds of things out there your company can be grateful to towards society.With you alone your company would be nothing.
You succesfully used the tools society put at your disposal to create 'your' company.Gratz but your company shall abide to the rules of the nation.If you don't like it create your own little country and run your company from their alone.You'll have to take care of military issues,safety,environmental,provide for your own health care,theoretically do that then and I'll theoretically agree that I'd have no right to complain about your business.

---------- Post added 2013-03-12 at 06:16 AM ----------

You take away logic, reasoning and qualifying material and you will end up with a split of 33.33333333333333333333333333333333333333333333333% each. I don't understand what purpose such a question serves, seeing as the real world has logic, reasoning, qualifying material and risk. All of these (and many other factors) play a factor is distribution of wealth.

The purpose is to discover what we think should be the right ratio.