freddiemac: our esteemed leades: he gets 19.8 million. What'w wrong with this pictur

[windsurf]

WTF:Freddie Mac CEO gets $19.8 million in '07 - Mortgage Mess - MSNBC.com

[al_bundy]

don't buy the stock if you don't want to pay him

[Tadpole]

I've never thought about the CEO's. Did they privatize these agencies so that the big guys could make big salaries? I've seen articles about lawyers, judges, and financial types screaming over their low federal salaries which are capped.

[Independent]

Quote:

Originally Posted by al_bundy don't buy the stock if you don't want to pay him

I'm concerned that the gov't is going to force me to buy the stock.

[Spanky]

CEOs are highly rewarded when their company stock prices skyrocket resulting from risk taking but hardly or never penalized when profits or stock prices plummet. Obviously their total compensation decline during the "bad" years but never in the negative territory. Over an extended period of time, say 10 years, the CEOs collect hugh compensation even though profitability may not have improved at all. No wonder so many people aspire to be CEOs.

[kcowan]

One of the problems is deferred compensation in the form of stock options. Options are only "in the money" when the price increases from the date of grant. These options ore good for multiple years then expire.

This leads to the recurring phenomenon that the CEO makes lots of moves to increase the business, then cashes in when these initiatives are winding down (i.e. stock prices increase slows or reverses).

It creates horroble optics but is unlikely to change. What makes it worse is when the board fires the CEO for the price slowdown and then he gets a big severance package AND has to cash in all his options.

[ladelfina]

There is never ANYthing that ever justifies reigning in a CEO salary (this opinion offered in not so many words by MBA sis with her concordant exec.-friendly conditioning).

If thing are going well, they must be highly compensated.

If things are going poorly, they must be even MORE highly compensated to ensure "retention".

Rinse, repeat, and keep ratcheting upward.

Bottom line: companies on the higher end of exec. compensation have been shown to tend to the lower end of performance. Chicken or egg, I cannot say.

[al_bundy]

Quote:

Originally Posted by kcowan One of the problems is deferred compensation in the form of stock options. Options are only "in the money" when the price increases from the date of grant. These options ore good for multiple years then expire. This leads to the recurring phenomenon that the CEO makes lots of moves to increase the business, then cashes in when these initiatives are winding down (i.e. stock prices increase slows or reverses). It creates horroble optics but is unlikely to change. What makes it worse is when the board fires the CEO for the price slowdown and then he gets a big severance package AND has to cash in all his options.

and the way the media reports these things you'd think the CEO was getting a check from the company

i don't follow these things that much, but it seems like most CEO's have options with strike prices at $.01 or some other low amount

[al_bundy]

Quote:

Originally Posted by Independent I'm concerned that the gov't is going to force me to buy the stock.

the plan i've heard was the government is going to buy a new class of preferred stock paying 10% divs just to give the companies some cash. not exactly a tax payer bailout

if its the debt you are worried about, anyone who has bought a home in t he last 40 years has benefitted from the implied bailout via lower interest rates

[Independent]

Quote:

Originally Posted by al_bundy the plan i've heard was the government is going to buy a new class of preferred stock paying 10% divs just to give the companies some cash. not exactly a tax payer bailout if its the debt you are worried about, anyone who has bought a home in t he last 40 years has benefitted from the implied bailout via lower interest rates

I hope you are right about the terms, and I hope Freddie can generate the profits to pay the dividend.

Like I said, I'm "concerned".