Warren Buffett is becoming a pain in the rear end.

[tomdavis]

Then fire the guy. And fire the board, too. That doesn't change the fact that there is only one thing a CEO can do that matters: increase the the value of the company. If he/she doesn't do that they should be fired.

If you only invest in companies where the CEO compensation matches the performance of the company it won't be an issue for you. That's one of my criteria in my long-term portfolio. If the CEO is overpaid relative to performance I take my investment dollars elsewhere.

Quote from atticus:

Ed Whitacre earned $30MM a year while his company languished in a bull market. So what's your point exactly? There (presently) is zero correlation between CEO pay and corporate performance. How many examples would you like...? I have hundreds.

 

[clacy]

Quote from failed_trad3r:

does a ceo who earn 1 mill+ really work 10 times as hard as a ceo who makes 100k? I don't think so. If the first Ceo works 50 hours per week the second CEO must work 500 hours per week.

Jesus, with logic like that you'll be "failed_xxxx" for the rest of your life, regardless of profession. LOL

 

[clacy]

Exactly. I don't understand why Buffett doesn't walk the walk. No one is stopping him from transferring most of his assets to the government or setting up charitable foundations that transfer wealth.

 

[bigarrow]

Quote from tomdavis:

Then fire the guy. And fire the board, too. ... If he/she doesn't do that they should be fired.

In a half way functional corporate world that is what should happen but it doesn't happen and won't happen.

 

[tomdavis]

If people stop investing in companies with overpaid CEOs things will change. Until then, it creates investment opportunities for those who are smart enough to invest in companies with CEOs whose compensation matches their performance (value). The information is publicly available. It's easy to do.

Quote from bigarrow:

In a half way functional corporate world that is what should happen but it doesn't happen and won't happen.

 

[Lucrum]

Quote from clacy:

Jesus, with logic like that you'll be "failed_xxxx" for the rest of your life, regardless of profession. LOL

Maybe failed_logic would be a more appropriate nick.

 

[Lucrum]

Here is the post I mentioned earlier that gave me pause.

Quote from AAAintheBeltway:
09-01-11 11:02 AM
Sorry, but I have to side with the socialists on this one. OK, I'll make an exception for a company that is losing money, but I don't think any of these fall into that category. And anyway, a company losing money should not be shelling out $15 mill for a CEO.

I understand that taxable profit may be manipulated by accounting tricks and legal tax minimization techniques. I also appreciate that executive compensation is a matter for the board. Of course, that is the same board appointed by the CEO and full of his cronies and lackeys. A lot of them are CEOs themselves and have a huge conflict in deciding pay levels.

The issue here is one of perception. There are two problems. One, huge companies with billions in revenues that somehow manage to avoid paying much in the way of taxes. Good for them, bad for the system and for the perception of fairness. The other problem is the sheer level of executive compensation. It surpassed obscene years ago and is now almost beyond pejorative description. How do you tell workers to take a pay or benefits cut when they see the CEO taking home $20 mill? How do you hold the line on tax increases when these hogs make more in a week than 10 schoolteachers or policemen?

I don't want the government deciding pay levels for business, but the model that the board makes decisions in the best interests of the business and shareholders is clearly broken. That system is as corrupt as our political system, maybe more so. Pols at least have to answer to voters. These guys only answer to each other, and since they all have their hands in the shareholders pockets, no one is going to criticize anyone else.

I'm sure I'll hear about the extraordinary skills, etc they bring and how you have to pay for that. Well, every one of these guys is going to die and I'llwager the compnay goes on just fine. If Apple can scrape by without Steve Jobs, I really doubt any of these hogs is so essential anyone would notice if they were gone. I will make one exception, Aubry McClendon. He is such a notorious hog that Cheseapeake stock would soar if something happened to him.

 

[noddyboy]

Quote from wildshoe:

he's a shill, without getting too conspiratorial, lets take note of the ground we are dealing with here and get our footing...

this guy makes billions, he made 350m in one day on a bank of america bet and then lost it the next...

he probably has all of his assets tucked away in rockefeller charity "funds/havens" or in swiss banks or what have you

his tax rates are extremely low, sure...

but he wants to tax 1m+ earners? what's next when everyone moves their money offshore, 500k? maybe 250k?

let's be real, he won't take a hit on this, and all the hard working execs and business owners who make 1m a year will get hurt baddddd...



everyone knows that military spending, not taxes are the issue, but the military spending is necessary to prop up GDP SO...


they need more taxes, and they need them quick, and who else to sell a tax on the wealthy but the oracle from omaha.


he's an absolute shill

I don't see how the new tax proposal, which is short on the details and long on the sensationalism, will affect Buffet. He still has no tax, because he does not sell the shares in his company. He gifts them to his trusts and charities. Why are we dividing the country when we should be united?

If you want the rich to pay more, just limit deductions period. Why complicate the tax code anymore? How many man hours do we waste on doing our taxes?

 

[athlonmank8]

Quote from tomdavis:

CEOs don't get paid for "working hard." They get paid for increasing the value of the company. Period.

Whether they work 5 minutes a week or 100 hours a weeks is irrelevant.

They get paid to ship jobs overseas too. Because if they don't do it, someone else will. That was his reasoning and he was right.

It all stems from the shareholders. Works up to the BOD and then the CEO.

The whole process is unsustainable IMO. Especially when you have a 20% unemployment rate.

The playing field would have been much more even had we not been focused on profits ahead of jobs. Now we suffer the consequences.

For some reason people find it hard to blame themselves for their problems. Could be the reason why so many fail at trading as well.

 

[tomdavis]

Who would invest in a company that focuses on jobs ahead of profits? Value is created by the expection (and realization) of higher future earnings (cash flows) that can either be passed on to investors as dividends or re-invested to create growth in future earnings. (Read Warren Buffet's letters to his shareholders. This is exactly what he says year-in and year-out --it's all about future earnings growth.)

Imagine a press conference -- The CEO of a Fortune 500 company announces that his company is going to put job creation ahead of profits. What do you think will happen?.... Every mutual fund and investor with an IQ above sea level will dump the stock. Why? Because the CEO has just announced to the world that his future earnings (cash flows, dividends and growth investment) are going to be lower than if he didn't put job creation first.

If CEOs thought they could make the share price (value) of their companies go up by putting jobs creation ahead of profits, they'd all be doing it. Warren Buffet would be at the head of the line. Instead, Buffet's companies laid people off in 2008-2009 just like all the other Fortune 500 companies.

Quote from athlonmank8:

They get paid to ship jobs overseas too. Because if they don't do it, someone else will. That was his reasoning and he was right.

It all stems from the shareholders. Works up to the BOD and then the CEO.

The whole process is unsustainable IMO. Especially when you have a 20% unemployment rate.

The playing field would have been much more even had we not been focused on profits ahead of jobs. Now we suffer the consequences.

For some reason people find it hard to blame themselves for their problems. Could be the reason why so many fail at trading as well.