tag:blogger.com,1999:blog-20417751.post2399760995393339057..comments2024-01-22T18:22:29.391-08:00Comments on hedera's corner: Executive Payhederahttp://www.blogger.com/profile/01696592301686568456noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-20417751.post-20521508976444640022009-10-26T16:15:10.165-07:002009-10-26T16:15:10.165-07:00As I understand it, it's a "you scratch m...As I understand it, it's a "you scratch my back, I'll scratch yours" arrangement, instead of direct benefit. Executive A from company A is on the boards of companies B and C; executives from companies B and C are on company A's board also. When company A's board proposes executive A's compensation package, executives B and C vote for it; and vice versa.hederahttps://www.blogger.com/profile/01696592301686568456noreply@blogger.comtag:blogger.com,1999:blog-20417751.post-40011372359380238892009-10-26T00:24:46.882-07:002009-10-26T00:24:46.882-07:00I have a suspicion that the board of directors get...I have a suspicion that the board of directors get the chief executive to hire a lot of friends and relatives et al., or contract services from companies owned by the directors who in return approve the chief executive's bonus. What incentive would there be for the directors to approve the CEO's bonus, they're not getting any of it?RONWhttps://www.blogger.com/profile/10685861839372504999noreply@blogger.comtag:blogger.com,1999:blog-20417751.post-20572925200741748062009-10-23T10:44:43.631-07:002009-10-23T10:44:43.631-07:00The "wisdom" in corporate America is tha...The "wisdom" in corporate America is that an executive is worth what profits and growth he/she can generate. After all, if a company's stock doubles, or its income annually is, let's say, a billion dollars, then it may seem that 20 million dollars a year isn't "too much" to justify. <br /><br />The problem is that executive pay has become disconnected from performance. Company executives of many firms make big money even when the company may be performing poorly, or actually failing. <br /><br />The popular defense is that in this environment of excessive pay, a company can't "compete" for quality talent in the executive pool without ponying up unreasonably large pay packages. <br /><br />It's even begun to occur in colleges and universities, where college presidents can command several hundred thousands of dollars a year, just to make polite speeches and sit in on academic planning committees. <br /><br />It's gotten way out of hand. Privately held business and corporations--they can do what they want, assuming they aren't screwing their own employees or actively seeking to screw the country by exporting jobs or sheltering income overseas. But publicly held companies, in which shareholders supposedly have a say in major personnel decisions, or where the government has lent support in the form of TARP money, need to be held to a reasonable standard. <br /><br />It seems reasonable to imagine that no executive, no matter how hard they work or how talented they might be, could be worth over a million dollars a year from all sources of remuneration. The same should be true for professional entertainers and sports figures. Unfortunately, we have nothing to say about that. But with the TARP arrangements, these executives--who probably should have been fired, instead of rewarded with bonuses--should get a fraction of what they've been accustomed to.<br /><br />That's not socialism. It's common sense.Curtis Favillehttps://www.blogger.com/profile/06213075853354387634noreply@blogger.com