anyone else bugged about CEO pay?

[FUEGO]

I don't begrudge them. They all made lots of sacrifices to get where they are. I don't begrudge friends/associates that are cardiologists, oncologists, techies, investment bankers, top tier lawyers etc all pulling in low-mid six figures now. If I put my mind to it, I could rise to the same level, but I'm not interested in the total package that comes with those jobs.

 

[Texas Proud]

I don't begrudge them. They all made lots of sacrifices to get where they are. I don't begrudge friends/associates that are cardiologists, oncologists, techies, investment bankers, top tier lawyers etc all pulling in low-mid six figures now. If I put my mind to it, I could rise to the same level, but I'm not interested in the total package that comes with those jobs.

I don't think many people are worried about the 6 figure incomes.... heck, that is less than $1 mill... but the 8 or 9 figure incomes is what I think the OP was talking about...

 

[FUEGO]

I don't think many people are worried about the 6 figure incomes.... heck, that is less than $1 mill... but the 8 or 9 figure incomes is what I think the OP was talking about...

These are people that are 30 and just barely out of school making 20-30+ times what a minimum wage earner makes. I'm sure plenty are outraged at the injustice of this, too. Probably not as many here, since plenty here are six figure earners.

I just don't think it is wrong for people to make a lot of money if they can.

 

[Independent]

I just don't think it is wrong for people to make a lot of money if they can.

I don't think anyone here has said it's "wrong" for people to make a lot of money if the labor market is working efficiently.
The "overpaid" part occurs only if this group is able to avoid normal market constraints.

 

[Orchidflower]

I'm just bugged cause I'm not a CEO myself.

 

[FUEGO]

I don't think anyone here has said it's "wrong" for people to make a lot of money if the labor market is working efficiently.
The "overpaid" part occurs only if this group is able to avoid normal market constraints.

Maybe this is semantics, but I equated the OP's "bugged about CEO pay" question to equate to "do you think it is wrong for CEO's to make a lot of money". I say no, and I extend that statement to highly paid professionals that make a fraction of CEO pay (but many multiples of minimum wage).

 

[ziggy29]

5) It's a cartel. You can't buy stock in a US company that's not impacted by the CEO compensation spiral, so you can't just opt out. Even if you find a company with a board that is serious about only paying "market" comp, the market is distorted by the actions of other boards.

Good point. And unless you take a direct ownership stake in a privately held company, you can't easily invest in a long term-oriented business more interested in thriving in the next decade instead of one obsessed with the necxt quarterly earnings reports where a "hit the numbers at all costs" mentality can result in making a lot of long-term suboptimal business decisions to appease Wall Street here and now.

 

[rescueme]

I'm just bugged cause I'm not a CEO myself.

Assuming you're retired, you have a higher position. You don't report to anybody ...

 

[Mulligan]

I am lucky--I HAVE a job with a decent middle-class salary. System-wide, we have had no raise in three years. It really bugged me to read that CEO pay rose 12% last year. Anyone else?

I would never suggest what is too much for a CEO, but whenever there were no raises for the "common" employee wherever I worked, I always admired the bosses above us who would not accept a raise if their employees didn't get one. At least it made us all feel we were in this together.

 

[jazz4cash]

Partially true, though many of these corporate BODs have a rather incestuous relationship with each other. Many of these executives sit on the boards of each other's businesses, and that creates the appearance of a "quid pro quo" ir mutual backscratching where each can rubber stamp each other's huge raises and bonuses (or worse, golden parachutes).

+1

 

[jazz4cash]

I don't begrudge them one bit, but it seems there is no performance-based risk for many of these positions. Phenomenal pay for phenomenal results is fine with me. Perhaps the exceptions get the headlines, but I recall the golden handshakes for failed CEO's and double digit bonuses for execs who ran the entire economy to the brink and then got bailed out, so the system looks broke to me. It bothers me because thier compensation is not aligned with any long term benefit to stakeholders and that affects all of us.

 

[NW-Bound]

Yes, I am bugged about some CEO's pays (not all of them, just some). Not as an employee, but as a share holder. I just wish there were a way to mobilize stock holders to fire their ass. Their cohort board of directors too!

And even when we are not a share holder, we can still be affected by the gummint's bail out as previous posters have noted.

 

[FreeAtLast]

It used to bother me, but as I am semi retired now I tend to think of other things.

 

[Ready-4-ER-at-14]

I was always bothered about excessive executive pay and perks when the CEO and board of directory were retaining all earnings and not sharing dividends with the shareholders.

My belief is a company should return profits unless the CEO has a better use for that money to achieve even greater profitability.

Buying a money losing sports team, or padding the CEO salary just never seemed fair or just to me especially when annual performance bonuses were already measured in the millions or tens of millions.

 

[Meadbh]

The way I see it, we are all the CEOs of our own lives. William Bridges used this concept in a book years ago:

Amazon.com: Creating You & Co.: Learn To Think Like The CEO Of Your Own Career (9780738200323): William Bridges: Books

Presuming we are endowed with a modicum of intelligence and physical ability, and are willing to work hard, all of us who are fortunate to live in a free market economy have the ability to achieve financial success. Only a few will achieve results above the 95th percentile, and in general, those people go the extra mile, working hard enough to compromize their family life, and take risks. I say "more power to them!"

 

[palomalou]

Meadbh, I wish I could agree with you. So far, I have found no pattern between hard work, contributions to society, and earnings. Sometimes there is a correlation, but equally often, there is a negative correlation. You are quite correct, however, that someone who is willing to do whatever will earn the most money, can earn more.

 

[haha]

I am amazed by all the cheerleaders for high CEO salaries and options and etc etc etc.

This is anything but a free market. Horrible CEOs who are wrecking the company get paid extremely well, as do good CEOs.

Why do so many of these characters only own stock if their corporations have provided the money to buy it?

Why are European CEOs willing to work for so much less. Do we still beleive that Americans do things better? I don't.

The salaries are suggested by salary consultants who are paid by the company that is controled by the CEO. These consultants often have a stake in getting compensation up, as do all other CEOs. The salary recommendations are approved by the board of directors who are usually pretty well controlled by the CEO. Prospective board memebers can't just show up, they have to be nominated. Being a board member is a prestigious usually well compensated job with lots of perqs, why bite the hand that feeds you, especially when CEO's handpicked consultants give you the board member a ready made excuse for approval?

Where are all the prople who feel that America is going to it's doom by not taxing "high earners" more heavily? Stop some of this at the root, not at the level of taxation which is a much less pointed focus.

Ha

 

[NW-Bound]

I am amazed by all the cheerleaders for high CEO salaries and options and etc etc etc.

+1

This is anything but a free market. Horrible CEOs who are wrecking the company get paid extremely well, as do good CEOs.

+1
Sometimes, the good CEOs pay themselves less than the evil CEOs. An example of the former is Jim Senegal, CEO of Costco. Note that I use the term "pay themselves" because these people have a lot of direct influence on their pay, unlike the lower workers. See below.

Why do so many of these characters only own stock if their corporations have provided the money to buy it?

Eh, it's "free money".

Why are European CEOs willing to work for so much less. Do we still believe that Americans do things better? I don't.

The entrepreneurial CEOs in America deserve more, as they are the creators of their business. The "hired help" CEOs in established US companies, not so much.

The salaries are suggested by salary consultants who are paid by the company that is controled by the CEO. These consultants often have a stake in getting compensation up, as do all other CEOs. The salary recommendations are approved by the board of directors who are usually pretty well controlled by the CEO. Prospective board memebers can't just show up, they have to be nominated. Being a board member is a prestigious usually well compensated job with lots of perqs, why bite the hand that feeds you, especially when CEO's handpicked consultants give you the board member a ready made excuse for approval?

+1

Where are all the prople who feel that America is going to it's doom by not taxing "high earners" more heavily? Stop some of this at the root, not at the level of taxation which is a much less pointed focus.

Yes, it is no good if we tax them more, which simply means they will find a way to rob their stock holders even more to compensate for their taxes. High taxation also means more money goes to the gummint's instead of staying with the share holders, the proper owners of the businesses.

Sadly, there is currently no easy way to force CEO's pay to their true performance. A rising economy lifts all stocks, and most CEOs just get free ride from a better economic condition and not their acumen.

 

[Beryl]

Well, I'll say it.

I'm bugged about my CEO's excessive pay. Before FIREing Feb 1, as a senior manager, I helped my MegaCorp's CEO off-shore IT jobs to less reliable and less competent resources in low cost countries. I released many talented US citizens to help boost our stock and fatten his pocket. Not only were there devastated employees and their families but our customers also suffered. I did everything I could to minimize the pain to both, however.

That pig of a CEO got a raise of almost 20% but allotted almost nothing to the remaining employees who had to pick up the pieces.


I'm glad to be retired after 10 years of downsizing.

 

[haha]

The entrepreneurial CEOs in America deserve more, as they are the creators of their business. The "hired help" CEOs in established US companies, not so much.

These guys who have been idea generating, risk taking company founders are full to the gills with stock. They don't need to be rewarded twice with higher salaries. Other than Steve Jobs, Gates, and maybe a few others, founders are usually fair to middling as managers anyway and often their early departure is a good thing. As a counter example- remember what happened to Apple when John Sculley came over from Pepsi to replace Jobs?

I can think of many ways to make top management's pay more sensitive to their results, but none of these things will ever happen on a wide scale as most of the biggest robbers would be disadvantaged by it.

Ha

 

[W2R]

Some CEO's may be paying themselves considerably more than they really earn, but it's not like I can snap my fingers and change that fact.

I think this is a good example of "Life Isn't Fair."

 

[Texas Proud]

I am amazed by all the cheerleaders for high CEO salaries and options and etc etc etc.

This is anything but a free market. Horrible CEOs who are wrecking the company get paid extremely well, as do good CEOs.

Why do so many of these characters only own stock if their corporations have provided the money to buy it?

Why are European CEOs willing to work for so much less. Do we still beleive that Americans do things better? I don't.

The salaries are suggested by salary consultants who are paid by the company that is controled by the CEO. These consultants often have a stake in getting compensation up, as do all other CEOs. The salary recommendations are approved by the board of directors who are usually pretty well controlled by the CEO. Prospective board memebers can't just show up, they have to be nominated. Being a board member is a prestigious usually well compensated job with lots of perqs, why bite the hand that feeds you, especially when CEO's handpicked consultants give you the board member a ready made excuse for approval?

Where are all the prople who feel that America is going to it's doom by not taxing "high earners" more heavily? Stop some of this at the root, not at the level of taxation which is a much less pointed focus.

Ha

One of the things that I will point out is that the vast majority of CEOs do NOT make that much money... it is the few in the Fortune 500 (maybe a few others here and there).... so it is a small group of people


As an example... when I worked for Mega... I worked in NY for a bit... there was an SVP who was paid close to $700K in total compensation... he had maybe 15 people that reported to him (for the life of me I still can not figure out how he got there... I am just reporting the facts).... Now, this guy ran what you might consider a small consulting group... and he wanted to get a job at another firm that was not in NY... well, he found out that almost all the companies he talked to had CEOs who did not have a salary as high as him....

This is a guy who is NOT that high in Mega, but got paid like a small firm CEO...


Sure, the CEOs pay themselves etc. etc..... and most do not do a great job... but it is the system we have and it is not changing anytime soon...

 

[Rambler]

We hear stories of the obscene buyouts and such, bit really, has anyone on here BEEN a CEO of a major company? I haven't either, but I don't think its all peaches and cream........

I'm considered to be CEO of a major division of our group (around $3B revenues under my purview). I'm not the group CEO. I will testify that it is not all peaches n cream, neither at my puny level of CEOship or at my boss's. We won't go into the details too much, but I see what he goes thru, and I don't think I would be willing to accept his CEO job even for the package he makes (very low 7 figures).

Someone here asked why CEOs were sometimes paid in stock rather than having them buy their own. The answer here is simple: diversification. One element of my pay is restricted stock. But I never keep more than 3-5%. It's not that I don't believe in the company. It's simply that I cannot have my career and the bulk of my "fortune" in the same basket. One of my former CEOs told me to watch out for that. So I keep a few percent of my holdings in the company and the rest is diversified.

From my vantage point, I will say that most CEOs who make low millions and are producing good value for their companies would be in a respectable pay range, given what they have to do. When their pay goes into 9-10 figures, that is a different story.

R

 

[haha]

Someone here asked why CEOs were sometimes paid in stock rather than having them buy their own. The answer here is simple: diversification. One element of my pay is restricted stock. But I never keep more than 3-5%. It's not that I don't believe in the company. It's simply that I cannot have my career and the bulk of my "fortune" in the same basket. One of my former CEOs told me to watch out for that. So I keep a few percent of my holdings in the company and the rest is diversified.
R

I understand your point, but as an investor I find it unconvincing when applied to a CEO who controls his company. If he cannot keep a large portion of his net worth in the company that he controls, I don't want to keep any of mine in it. (Except in the case of some high ROE blue chips where management is rarely entrepreneurial.) Indexers are in a very different position. They figure they will be buying jewels and garbage, but none of it in large enough portions to hurt them.

I need to avoid the garbage, so I want a CEO who will not just make good money if things work (options) but will be meaningfully hurt if they don't go well (large fully paid stock positions).

Ha

 

[Rambler]

I understand your point, but as an investor I find it unconvincing when applied to a CEO who controls his company. If he cannot keep a large portion of his net worth in the company that he controls, I don't want to keep any of mine in it. (Except in the case of some high ROE blue chips where management is rarely entrepreneurial.) Indexers are in a very different position. They figure they will be buying jewels and garbage, but none of it in large enough portions to hurt them.

I need to avoid the garbage, so I want a CEO who will not just make good money if things work (options) but will be meaningfully hurt if they don't go well (large fully paid stock positions).

Ha

Yeah, I understand that point and it's a good one. In our company, we have one major shareholder (an individual, not the CEO) with around 30-35% of the shares. The rest is pretty free float. He is quite fickle, and the guys in the CEO level and CEO-1 level can be and have been fired simply because the major shareholder no longer likes him/her, regardless of the value they have brought and still bring to the organization. So this is really where I'm coming from.

R