I'd agree entertainers/athletes are making outrageous incomes, but it's an apples to oranges comparison. Nobody is losing their job because Oprah makes a 100 million a year, whereas plenty of people are losing jobs just so execs can keep theirs. The salary/bonus/benefit increases of corporate honchos have come directly on the back, and at the expense, of the common worker.
Corporate Greed Undermines System
- Thread starter AAAintheBeltway
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I'd agree entertainers/athletes are making outrageous incomes, but it's an apples to oranges comparison. Nobody is losing their job because Oprah makes a 100 million a year, whereas plenty of people are losing jobs just so execs can keep theirs. The salary/bonus/benefit increases of corporate honchos have come directly on the back, and at the expense, of the common worker.
captain said: " plenty of people are losing jobs just so execs can keep theirs"
So the better thing for execs' to do would be to employ more workers and lose their own jobs?
Does the business need more workers? Is that a consideration? Is outsourcing cruel? It is axiomatic in economics that outsourcing is beneficial to society. Is society cruel?
The point is that running a business efficiently and exec compensation are two different issues. A business should be run efficiently no matter what the exec compensation is. Your argument seems to imply that these business' are being run much less optimally than they could if they had more workers. I don't buy that argument. And who says Oprah couldn't employ more people? Of course she could if she wanted to. Nobody's stopping her.
So the better thing for execs' to do would be to employ more workers and lose their own jobs?
Does the business need more workers? Is that a consideration? Is outsourcing cruel? It is axiomatic in economics that outsourcing is beneficial to society. Is society cruel?
The point is that running a business efficiently and exec compensation are two different issues. A business should be run efficiently no matter what the exec compensation is. Your argument seems to imply that these business' are being run much less optimally than they could if they had more workers. I don't buy that argument. And who says Oprah couldn't employ more people? Of course she could if she wanted to. Nobody's stopping her.
No! What I'm saying is the exec making 10 million a year while laying off 20 people is greed, pure and simple. Say those 20 people had a total overhead cost of 50K apiece. The exec can't get by making 9 million?
The point I'm making is salary overhead is overhead regardless of the position that it is expensed to. Why are workers being laid off while exec compensation not only remains high, it goes up?
And yes, business could be run more optimally with more people in many cases, especially in manufacturing. Manufacturing is nowhere near its optimal productivity as a result of work that goes undone. The guy who now does the work of three while seeing his wage reduced does not perform at the same level as they used too. I know! I'm one of those guys. There are plenty of things I could be doing other than watching the market and posting on ET all day. That shit won't get done because I am grossly under paid compared to the wage I made 30 years ago for doing the same god damn thing. The equipment breaks down...Oh Well, looks like some more O.T. for the weekend. Believe me, the shit you read about increased productivity is just that, shit. Could be astronomically higher if we were paid a 21st century wage. You'll probably argue my attitude is the problem. I'd argue that my attitude is the result of the problem. Wasn't always this way.
You don't much like market based principals of economics, do you? It is obvious from your writing. Deciding to employ more people because there is more money in the company till? Paying people what they used to get regardless of the current market environment and competion? Hiring more people at higher wages to increase productivity? They all sound good at a union meeting, but when they are tried in practice, they destroy companies. Companies like GM aren't going down the tubes because of exec compensation, they are going down because unions with your philosophy got them to implement these very ideas. Now they're in deep do-do.
No matter how hard you try, you just can't force people to pay more for products, more for labor, and expect it to go on forever. I'm really not open to arguments about how it's everyone elses fault why these companies go down. They are paying too much for labor and benefits, period. The very things on your wish list.
You might be surprised I'd agree with you to a point. GM is a good example of how unions run amuck can destroy a workforce. That is only part of GM's story. Piss poor design, horrible marketing and a management stuck in the 60's have played a large part in their continuing demise.
As you stated, people will not continue to just pay more and more for labor, or anything else for that matter. Everything has its tipping point. Bt that same token, you can't expect people to work for less and less either, especially when the job description continues to broaden. Somethings gotta' give and those at the top have the most to give back. My belt is as tight as it's gonna' get.
Gotta' go! I think they'll draw the line at paying me O.T. to surf the net.
An entertainer can perhaps justify their compensation by the fact that their name translates into viewers. They are not setting their own pay either. Some hard-headed businessmen are making a calculated decision that it is worth it. In some cases, perhaps Opra, they are right. In others, eg Katie Couric, they were horribly wrong.
CEO's and top exec's however live in a different world, one in which they or their cronies calculate not what they are worth, but what they can get away with taking. Of course they use all kinds of objective sounding metrics to justify it, but then they change the justification when it suits them. One year, it is stock price, but if the general market is down, then that is obviously unfair so they turn to profits or revenues or meeting some benchmarks that they themselves set.
The "oversight" by boards is a total joke. Ask any hard questions and you will be invited to leave the board. If Bill Perkins of Kleiner Perkins can get the shaft because he objected to blatantly unlawful corporate spying, who would dare ask questions about the CEO's pay? Certainly not other CEO's, bankers or lawyers who depend on him for business or the professional boardmember types who don't want to screw up a cushy jig.
I'm sick of it. The corporate governance model is irretrievably broken. Most shares are held by fund managers, insurance companies or banks who don't want to risk losing their pension business or other corporate business by rocking the boat. Individual, non-conflicted shareholders are a minority of most companies, particularly since CEO's learned they could get away with handing themselves huge slices of stock through options. Have to keep them "incentivized" in the lingo, since apparently a mere 20 or 30 million in cash isn't enough to get them out of the sack in the morning. That must make the guys on the shop floor, in the warehouses, doing the actual work feel good.
I'd love to see the new Democrat congress do something about it, but I'm not holding my breath. As another poster wrote, a lot of these hogs are Democrats. The dirty little secret of the "party of the working man" is that they are far more dependent on fat cat donations than Republicans.
Apologists like Cramer always say, get over it, look how much money they "made" for the shareholders because the stock went up. Big f***ing deal. Most of the time, you could put the average high school teacher in the CEO's chair and the results would not be too different. If these guys are so absolutely irreplaceable, how come the companies don't just go to pieces when they die, retire or change jobs?
I don't have anything against people getting rich. Just don't tell me some corporate politician who finally finagles his way to the corner office has somehow magically "created" so much wealth, he "deserves" to get $100 million a year. Larry Kudlow may believe it, but everyone else knows it is BS.
CEO's and top exec's however live in a different world, one in which they or their cronies calculate not what they are worth, but what they can get away with taking. Of course they use all kinds of objective sounding metrics to justify it, but then they change the justification when it suits them. One year, it is stock price, but if the general market is down, then that is obviously unfair so they turn to profits or revenues or meeting some benchmarks that they themselves set.
The "oversight" by boards is a total joke. Ask any hard questions and you will be invited to leave the board. If Bill Perkins of Kleiner Perkins can get the shaft because he objected to blatantly unlawful corporate spying, who would dare ask questions about the CEO's pay? Certainly not other CEO's, bankers or lawyers who depend on him for business or the professional boardmember types who don't want to screw up a cushy jig.
I'm sick of it. The corporate governance model is irretrievably broken. Most shares are held by fund managers, insurance companies or banks who don't want to risk losing their pension business or other corporate business by rocking the boat. Individual, non-conflicted shareholders are a minority of most companies, particularly since CEO's learned they could get away with handing themselves huge slices of stock through options. Have to keep them "incentivized" in the lingo, since apparently a mere 20 or 30 million in cash isn't enough to get them out of the sack in the morning. That must make the guys on the shop floor, in the warehouses, doing the actual work feel good.
I'd love to see the new Democrat congress do something about it, but I'm not holding my breath. As another poster wrote, a lot of these hogs are Democrats. The dirty little secret of the "party of the working man" is that they are far more dependent on fat cat donations than Republicans.
Apologists like Cramer always say, get over it, look how much money they "made" for the shareholders because the stock went up. Big f***ing deal. Most of the time, you could put the average high school teacher in the CEO's chair and the results would not be too different. If these guys are so absolutely irreplaceable, how come the companies don't just go to pieces when they die, retire or change jobs?
I don't have anything against people getting rich. Just don't tell me some corporate politician who finally finagles his way to the corner office has somehow magically "created" so much wealth, he "deserves" to get $100 million a year. Larry Kudlow may believe it, but everyone else knows it is BS.