The only foreign CEO I know that gets paid the amount the US CEOs make is the Silvio Berlusconi, Prime Minister of Italy. He is a billionaire and owns tv networks, banks, etc.
Bostonian_Queer_in_Dallas
· 11 months ago
Many years ago I taught English for Berlitz in Germany. One day per week I went to a large corporation to teach a small class of top execs a "brush up" class to keep their spoken English pure and without mistakes...i.e. they were advanced students. We got to chatting one day about American corporate salary levels. I was shocked at how low their salaries were and how MUCH profit from this German firm went back into workers' salaries, benefits, etc and how well they treated their employees. They had no need for unions. The longevity at that firm was unreal...people worked there entire lives and their kids and grandkids as well. These gentlemen told me that they thought American executives were nothing but greedy...oh..and not all that sharp, either. Whenever they interacted with our execs they would giggle at how fucking stupid they were and idiotic in terms of decision making.
Dan Cobb
· 11 months ago
Chris, while the issue of "compensation committees" for CEOs is important... it is just a part of the picture. In the last few years the Communist economic model failed, and now the Capitalistic economic model has failed. The only remaining economic model is Socialism. Here's why Capitalism was doomed to fail: The idea of capitalism is to get rich off labor. The problem, however, was that the workers were treated as expendable when demand slowed, so the workers became less and less devoted to the company. Over the decades of the 20th century, workers lived through the experience of be devoted to the company only to be filed, laid off or RIFfed whenever the company thought it could save money by ending your job. Soon, worker loyalty to the company tanked. Workers would leave a job in a heart beat if they thought their prospects might be better elsewhere. The company was just a paycheck. In the last two decades we have seen this attitude bubble up to the CEOs (and their Boards and compensation committees). For modern-day CEOs, the company they run is just a means to the end of making themselves very wealthy, company be damned! Dick Cheney is perhaps the poster child of this mentality when he, as CEO of Halliburton, acquired Dresser Industries. His contract with Halliburton required Hallburton to pay him up to $40,000,000.00 if he acquired a company with the profile of Dresser Industries. Well, Cheney got his money, and Halliburton was saddled with Dresser, a company that had billions and billions of dollars in asbestos liability. Wall Street Journal called it the worst acquisition of the century. Luckily for Halliburton Cheney became the V.P. and was able to make good by steering billions of dollars of no-bid U.S. Iraq war government contracts to Halliburton... The excessive compensation of CEOs is simply the last, failing stage of Capitalism.
Arthur
· 11 months ago
Now all these honchos are cutting payrolls, so they can keep their pay. With the stock market owned by funds, not voting stock, we 401k, mutual fund investors, have no voice. Ownership society, yeah, right.
Dan Cobb
· 11 months ago
Over the last several decades, companies became increasingly unconcerned about the welfare of their employees. Workers were just a means to make increasing profits. Worker's took notice and realized that their loyalty to the company counted for less and less as years went on. Soon workers started seeing employers as nothing more than a way to get a paycheck. There was no more employee loyalty. This attitude bubbled up to the CEOs. Through the last few decades CEOs became more and more concerned with their compensation packages (and the compliant "compensation boards" that approved these wildly crazy packages) and less and less concerned with the success of the companies they were running. For CEOs, running a company became nothing more than a way for them to become personally rich --to extract wealth from the company for their personal advantage. Today in the USA, the CEO class cannot imagine anything less than 8 and 9 figure salaries, regardless of how poorly their companies are doing. They have brought capitalism to it's logical end: EVERYONE is out for themselves and to make huge $$ for themselves, not matter the consequences to others or to the companies they are running. This is the essential flaw of the Capitalist system and why it was doomed to die just as the Communist system died.
Older_Wiser
· 11 months ago
Yet, stockholders at Bank of America yesterday voted to make it the largest bank in the US in spite of the recent financial blowup (which could still affect the bank).
They don't seem to mind how much Ken Lewis makes, either. Oh, or that 30,000 employees could be laid off due to this merger. Screw the shareholders, too.
Cpeterka
· 11 months ago
"At a party given by a billionaire on Shelter Island, Kurt Vonnegut informs his pal, Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel "Catch-22" over its whole history. Heller responds, ' Yes, but I have something he will never have... enough.' " - Opening introduction to Jack Bogle's latest book, "Enough - True Measures of Money, Business, and Life."
Older_Wiser
· 11 months ago
Remember that BofA bought Countryside for $4 billion with all its crappy paper--no word on how much crappy paper BofA has in its own mortgage division, though...and paid $50 billion for Merrill Lynch, taking John Thain with the deal. I'm sure Merrill had lots of CDOs (and probably BofA did in its own investment division), so my question is, why aren't mortgage entities taken away from institutions that deal in CDOs? It would seem there would be nothing but profit taking from taking the money from people with mortgages and the same bank selling those mortgages sliced and diced. It smells to high heaven.
In 2006, compensation for the top 7 execs at BofA totalled $82 million; in 2007, it was $57 million. Stocks closed on BofA yesterday at $15.24, up not quite 2 pts. Cuomo has already asked for current 2008 compensation for these execs in his probe of BofA.
And didn't BofA get $25 billion from the TARP without asking. Gawd, the rotten fish smell is getting worse.
Rich! I remember 1981 in NYC where I resided for a short 3 months (making $12k at the NYU Business School of Management as an adm. asst) and all the talk was about Ivy Leaguers, fresh on Wall St. with the ink still wet on their MBAs, starting at $80K/yr. Frankly, no 22 or 23 yr old is worth that, are they? These are probably the same wankers who are now running things up there...
cosanostradamus
· 11 months ago
. I really don't care what the newbies take home. Some of them earn it. It's their Lords & Masters of the Universe that need to be hung from lamp-posts for what they have done to our pension funds, college funds, health-care funds, etc.
Most of those young kids have prob'ly died of heart attacks by now. Young arbitragers, and there are no old arbitragers, could make seven figures in their first year, trading pennies for yen, yen for lira, lira for pennies, and back again, every day, all day, hundreds and hundreds of times. They had to make their dough before they hit 30, which is when the pressure usually led to a coronary or a nervous breakdown, and a second career in something soothing.
It's all a game, a casino, a huge crap shoot with our money, our labor, our lives, our families. It has to stop. But with Ochangey appointing the Usual Gang Of Idiots to his economic team, it can only get worse.
I used to live on Maiden Lane, and I had friends attending the NYU B-school in the early 80's. Excellent strip clubs down there back then! Cheers! .
Rab
· 11 months ago
I don't think any of them are worth more than 5 million a year and that goes for athletes, actors, or any other high priced talent. Think about all the doctors, researchers of diseases, etc. that don't even make half that in a year.
ThingsComeUndone
· 11 months ago
20 times what the lowest paid employee makes? Stock options should go they give CEOs a reason to inflate the price.
Indigo
· 11 months ago
The world of business decisions is in the hands of profiteers whose decisions are based on the bottom line rather than the good of all the people involved. "The stock holders" is the usual incantation used to justify that approach. It excludes the producers, the labor, even the consumers with its narrow focus. Setting aside issues of human decency or even morality, money-making a la amércaine isn't about nurturing good people, it's about pushing aside as many as possible in order to increase the Wealth of the Few. Real change is going to require a profound paradigm shift, so profound that it could be mistaken for a revolution. ¡Hacia la victoria siempre!
iggy
· 11 months ago
Many years ago, I worked for Ogilvy & Mather, the advertising agency. The Creative Director, Norman Berry, was the highest paid salaried employee in advertising. He made $457,000 a year.
jcgraham77
· 11 months ago
I had a friend tell me not too long ago that the US has to have corporations--otherwise there is no where to put all the money/wealth. Well, I think the CEO's thought he was referring to them personally.
GaryG
· 11 months ago
I think a truly PRIVATE corporation should be able to pay their CEO as much as they want. Period!
The CEO of a PUBLIC company should be limited to a [small] percentage of the company's honest PROFIT averaged over several years. Limiting it to the same amount as the US President would be useful. It would at least provide a cap! That would provide that he would always work to maximize LONG-TERM profit as a smal quarterly burst would have little overall impact and really, really screrwing up would be a big negative to him.
Of course, this would be a moot point if the OWNERS [ie stockholders] actually cared what happened to THEIR money. And after all, the salary of the CEO is the stockholders money. He works for them! And anything he doesn't get goes into their pockets, R&D, or employee salaries.
brian
· 11 months ago
I agree. I have tried to bring this up at several stock holder meetings for the companies I own stock in. I suggested that executives in the companies make no more than 25x the lowest paid full time employee and they get no bonuses if the company does not make a profit. Needless to say, I was laughed out of the halls.
Their reasoning is that the need highly skilled CEOs and there are not many out there. So how come the CEO of the company I work for gets a bonus when we do not make a profit, but I get nothing, only the threat of being laidoff with no compensation?
foxy
· 11 months ago
Is that the same as asking what is the value of a baseball player or football player?
katiec
· 11 months ago
It is absolutely ridiculous the salarys and perks these CEO's are getting. Performance does not even enter into this equation. They are led by greed and corruption. They have become so top heavy do not know how they keep from topping over. Hmm, guess they have. Why is our government not demanding change???
Rebecca
· 11 months ago
Unfortunately, most people here don't understand the workings of most businesses. I would love for poster Dan Cobb to post any sort of relevant sources regarding his accusations. The biggest rule in business is that executives are beholden to their shareholders... not themselves, not their employees, and not their consumers. This isn't just by practice, this is by law. We all must take a step back when talking about "CEOs" in general and remember that not every company is B of A. These vast generalizations come off as extremely uniformed and ignorant.
Happy_Housewife
· 11 months ago
My dad was an insurance lawyer (I know what your're thinking, but he wasn't like that) He retired in 1987 after 30 years, and never made more than 80k. The CEO of the company was there for 50 years and made something on the order of 350k. Today, the lawyers start at 150k and I don't even want to guess what the CEO makes.
But here's the thing: Dad's pension was a good one, and the medical benefits are awesome. Dad died of lung cancer a few years back, and mom had lymphoma (in remission, thankfully) but neither illnesses cost us anything.
When mom goes, the pension ends, and there's really no money to speak of in the estate, but I don't care. Dad may not have been a millionaire, or even a brilliant lawyer, but he and mom took care of us kids, gave us a good home, put us through college, and provided for themselves in their old age. That's more than enough for me.
MC_Haiku
· 11 months ago
What is the proper value of a CEO, for, say, an appliance company that builds a simple gas stove that stops working within a couple years? When old stoves from the forties and fifties are still working fine? I'd say that CEO owes the nation money. He might have made some dough for Wall Street, but FUCK these guys.
woodroad34
· 11 months ago
I used to work for Korn/Ferry in the 80's (Richard Ferry was a minor attache and forced everyone to call him 'Ambassador'); it was one of the more successful top executive headhunting firms in the world. It was amazing to see convicted felons (white collar crimes, drug arrests, etc) come in and get employed by other companies and get salaries from 50% to 200% their former company's salary. They were fired because of either the above-mentioned crimes or just bad performance, but they never really lost anything. They just kept making money. It was outrageous. All the while I was going from one laid-off position to another and having to start at the bottom again (I was laid off from there as well due to bad economic timesj). Of course, this was during the Reagan years of the rich getting richer, etc.
scarlet slipper
· 11 months ago
I remember reading a couple of years ago about the CEO of Costco and his salary and employee philosophy. Unusual, honorable and successful. Seems like a good business plan to me.
Among the many troubling facets of all the bailouts, one thing that's not been mentioned is how many of these companies are getting such enormous influxes of cash and still laying off thousands and thousands of workers.
I've heard the talking heads and politicians yammering about the auto bailout and whether it will do any good if people still aren't going to buy a car and how that's related to the fact that the banks, who now have the taxpayer billions sitting in the vaults, think Americans aren't a good credit risk, so aren't lending, etc. I'm not sure why nobody takes it one logical step farther to note that one (and I realize it's not the only one) of the reasons Americans are afraid to take out a car loan or are in credit card trouble is, in part, because they've either lost their jobs or are worried about losing them.
Seems to me that retaining your workforce should be part of receiving taxpayer money. It's a little beyond ironic to think that every one of the 1.5 million laid off workers this year is still on the hook for $2000 to fund the bailout.
pat
· 11 months ago
What is the proper value of a CEO?
Essentially, it's the same question, what is the Proper value of any worker.
now we have a problem in that we normally price workers based upon the market for their services, so consequently the Price vs the Value is a little disjointed.
What's the Value of a good Third Grade Teacher? The market says 30-50K/year, the value can be priceless if they mentor an Einstein.
The inverse is in CEO's because there is no market setting prices.
We can reasonably state there is a market for Construction, welders, union workers, etc but in special skills or in areas where market forces break down, there is no market.
What's the market price for a brain surgeon? Essentialy whatever you can pay. What is the market price for a CEO, whatever they can grab.
Consequently, the only ay to settle this is by letting the shareholders vote on CEO pay or by requireing senior executives pay come out earnings, not out of expenses.
This is the key to halting runwaway compensation,
aibi
· 11 months ago
We have a minimum wage so why not a maximum wage? Or how about going back to the Constitution and not tax money that people actually work for, which is quite different from the "compensation" in the higher reaches of the corporate world.
High Crimes & Misdemeanors
· 11 months ago
$1 dollar.
And then they have to pay back that dollar and all the over-payment they received. If the company goes in the tank or has negative profits, then they get the same about as the lowest paid employee.
There is no CEO worth a million dollars, NONE!!! That goes the same with sports players.
Rebecca
· 11 months ago
maximum wage? i am absolutely disgusted by the assumption that executives don't work. apparently only blue collar members of society "work" and everyone else just devised a way to counterfeit money because OBVIOUSLY they don't work. the attitude and ignorance on this page is exactly why "liberal" has been turned into a dirty word.
MNUSA
· 11 months ago
Tie CEO salaries to that of the lowest-paid worker for the corporation. If the lowest paid worker gets $8/hour ($16,640 per year) the CEO would get say 25 times that or $200/hour including bonuses and perks ($416,000 per year). Delay performance bonuses for five years so they aren't tempted to play with the books to get their annual bonus and then bail when the ship sinks. CEOs should get exactly the same benefits as the rest of the staff - no souped up benefits so he/she doesn't understand what the lives of employees are like. CEOs aren't usually entrepreneurs who risked it all to start a corporation or who had a brilliant idea and parlayed it into a successful business. They are employees like the rest of the staff. Profits go to the owners, the shareholders not management. That'll help beef up the 401K plans that have tanked the past couple of months.
mcolley73
· 11 months ago
I think they should tie CEO pay to the average salary of employees. There should be a multiple... say, 50x. A CEO can't make more than 50x what an employee makes, and a CEO severance and/or retirement package can never be greater than 100x the same amount. So, 50 times 50k = 2.5 million.
The exact multiple isn't important. What's important is that a CEO shouldn't be able to thrive off of underpaid workers.
mcolley73
· 11 months ago
.... not be able to make more than 50x what the AVERAGE employee makes... I should have proofread.
All Comments
Here's why Capitalism was doomed to fail:
The idea of capitalism is to get rich off labor. The problem, however, was that the workers were treated as expendable when demand slowed, so the workers became less and less devoted to the company. Over the decades of the 20th century, workers lived through the experience of be devoted to the company only to be filed, laid off or RIFfed whenever the company thought it could save money by ending your job. Soon, worker loyalty to the company tanked. Workers would leave a job in a heart beat if they thought their prospects might be better elsewhere. The company was just a paycheck. In the last two decades we have seen this attitude bubble up to the CEOs (and their Boards and compensation committees). For modern-day CEOs, the company they run is just a means to the end of making themselves very wealthy, company be damned! Dick Cheney is perhaps the poster child of this mentality when he, as CEO of Halliburton, acquired Dresser Industries. His contract with Halliburton required Hallburton to pay him up to $40,000,000.00 if he acquired a company with the profile of Dresser Industries. Well, Cheney got his money, and Halliburton was saddled with Dresser, a company that had billions and billions of dollars in asbestos liability. Wall Street Journal called it the worst acquisition of the century.
Luckily for Halliburton Cheney became the V.P. and was able to make good by steering billions of dollars of no-bid U.S. Iraq war government contracts to Halliburton... The excessive compensation of CEOs is simply the last, failing stage of Capitalism.
They don't seem to mind how much Ken Lewis makes, either. Oh, or that 30,000 employees could be laid off due to this merger. Screw the shareholders, too.
Heller responds, ' Yes, but I have something he will never have... enough.' "
- Opening introduction to Jack Bogle's latest book, "Enough - True Measures of Money, Business, and Life."
In 2006, compensation for the top 7 execs at BofA totalled $82 million; in 2007, it was $57 million. Stocks closed on BofA yesterday at $15.24, up not quite 2 pts. Cuomo has already asked for current 2008 compensation for these execs in his probe of BofA.
And didn't BofA get $25 billion from the TARP without asking. Gawd, the rotten fish smell is getting worse.
"Bushession Hits Ivy League Hard.
.
I really don't care what the newbies take home. Some of them earn it. It's their Lords & Masters of the Universe that need to be hung from lamp-posts for what they have done to our pension funds, college funds, health-care funds, etc.
Most of those young kids have prob'ly died of heart attacks by now. Young arbitragers, and there are no old arbitragers, could make seven figures in their first year, trading pennies for yen, yen for lira, lira for pennies, and back again, every day, all day, hundreds and hundreds of times. They had to make their dough before they hit 30, which is when the pressure usually led to a coronary or a nervous breakdown, and a second career in something soothing.
It's all a game, a casino, a huge crap shoot with our money, our labor, our lives, our families. It has to stop. But with Ochangey appointing the Usual Gang Of Idiots to his economic team, it can only get worse.
I used to live on Maiden Lane, and I had friends attending the NYU B-school in the early 80's. Excellent strip clubs down there back then! Cheers!
.
¡Hacia la victoria siempre!
The CEO of a PUBLIC company should be limited to a [small] percentage of the company's honest PROFIT averaged over several years. Limiting it to the same amount as the US President would be useful. It would at least provide a cap! That would provide that he would always work to maximize LONG-TERM profit as a smal quarterly burst would have little overall impact and really, really screrwing up would be a big negative to him.
Of course, this would be a moot point if the OWNERS [ie stockholders] actually cared what happened to THEIR money. And after all, the salary of the CEO is the stockholders money. He works for them! And anything he doesn't get goes into their pockets, R&D, or employee salaries.
Their reasoning is that the need highly skilled CEOs and there are not many out there. So how come the CEO of the company I work for gets a bonus when we do not make a profit, but I get nothing, only the threat of being laidoff with no compensation?
guess they have.
Why is our government not demanding change???
But here's the thing: Dad's pension was a good one, and the medical benefits are awesome. Dad died of lung cancer a few years back, and mom had lymphoma (in remission, thankfully) but neither illnesses cost us anything.
When mom goes, the pension ends, and there's really no money to speak of in the estate, but I don't care. Dad may not have been a millionaire, or even a brilliant lawyer, but he and mom took care of us kids, gave us a good home, put us through college, and provided for themselves in their old age. That's more than enough for me.
Among the many troubling facets of all the bailouts, one thing that's not been mentioned is how many of these companies are getting such enormous influxes of cash and still laying off thousands and thousands of workers.
I've heard the talking heads and politicians yammering about the auto bailout and whether it will do any good if people still aren't going to buy a car and how that's related to the fact that the banks, who now have the taxpayer billions sitting in the vaults, think Americans aren't a good credit risk, so aren't lending, etc. I'm not sure why nobody takes it one logical step farther to note that one (and I realize it's not the only one) of the reasons Americans are afraid to take out a car loan or are in credit card trouble is, in part, because they've either lost their jobs or are worried about losing them.
Seems to me that retaining your workforce should be part of receiving taxpayer money. It's a little beyond ironic to think that every one of the 1.5 million laid off workers this year is still on the hook for $2000 to fund the bailout.
Essentially, it's the same question, what is the Proper value of any worker.
now we have a problem in that we normally price workers based upon the market for their services, so consequently
the Price vs the Value is a little disjointed.
What's the Value of a good Third Grade Teacher? The market says 30-50K/year, the value can be priceless if they mentor an Einstein.
The inverse is in CEO's because there is no market setting prices.
We can reasonably state there is a market for Construction, welders, union workers, etc but in special skills or in areas where market forces
break down, there is no market.
What's the market price for a brain surgeon? Essentialy whatever you can pay.
What is the market price for a CEO, whatever they can grab.
Consequently, the only ay to settle this is by letting the shareholders vote on CEO pay or by requireing senior executives pay
come out earnings, not out of expenses.
This is the key to halting runwaway compensation,
And then they have to pay back that dollar and all the over-payment they received. If the company goes in the tank or has negative profits, then they get the same about as the lowest paid employee.
There is no CEO worth a million dollars, NONE!!! That goes the same with sports players.
The exact multiple isn't important. What's important is that a CEO shouldn't be able to thrive off of underpaid workers.