A "real world salary cap" would never work though.... if the CEO for the medium size Happy Joe Soap Corporation maxes out at that $500k per year... why should the CEO of a super giant company, for example, General Motors, make the same as him when his job is so much more difficult, public, involved etc...

Add to that, what do you do if you have a very successful company? If the CEO is capped at $500k, and everyone under him makes a scaled wage under that.... what do you do with all the huge profits of a successful business? You wouldn't be able to give the CEO more for a job well done... and you wouldn't be able to give more to anyone else, either without blowing your scaled system out of the water.





I guess the owners or stockholders would be pretty happy...

 

Oh, I just meant for GM, right now as is. It is not a profitable company.

If they could turn the company profitable then very profitable and sustain growth, or a large market share, then I would say 1m for the CEO would be fine, but the tens and hundreds of millions used today, no need for it. If I was paid 500k to be the CEO, I would take at least half of it and invest it at times when WS would drop the value becasue I was making decisions to realign the company to get it on the same track. It would happen, always does. By the tim ethe company started getting to the point of where I would think I needed to be replaced, The money I invested would be worth many times what I spent.

 

Not to come across as antagonistic or anything, but in my HUMBLE opinion, these bastages that are running the company now have presided over it for a while, and are the ones responsible for it being in the sh1++er in the first place. I DON'T WANT them to stay... there's no reason to think they can make it better just because we pay them more.

And as for replacing them... look no further than the bulletin board in the break room.
I'll bet you a crate engine against a coffee cup that there are SEVERAL well-qualified MBAs, degreed engineers, CPAs, and such that are stuck in lower-middle management (because they do not "know somebody" or they are not "related to so-and-so") that would LOVE to have a chance to put some non-political common sense to work in a position of authority. AND, they will do it for MUCH less than the goobers who are there now. Offer a shift manager making $50k/year a job as plant manager making a mere $100k/year, and see what he does. (Plant managers make LOTS more than $100k/year too, so you would be getting a discount on that salary to boot.)

I see your point, and I appreciate a company's situation with regards to keeping talent - especially when they are process-experts. But at the level of management in this example - those guys don't know squat about the daily activities or the technical goings-on on a plant floor. They only see P&L sheets and vote the way their advisors and coucil tell them to vote... unless they are conspiring to do something they shouldn't... like them Enron boys... Tyco boys... AOL/Time boys, etc.

Sorry... Not in a bad mood or anything, I'm just tired of fighting bureaucracy.

 

Absolutely. They have the decision-making ability. They have the authority to change things. If they have no confidence in their own decisions, they should be gone. Otherwise, they're just there to smash and grab, take while the taking is good.

As far as replacing them, it wouldn't be hard. Lots of smart, extremely motivated YOUNGER PEOPLE out there. I meet lots of them every year.

 

I see your point, and I agree with the catch-22... paying the people who got you in this situation in the first place seems rather stupid... but I think stepping back and looking at the whole picture, you can at leats see the reason for it.

Again, I really doubt the CEO and/or super-senior management will be the ones getting this money... more the lower/middle level guys, etc... I think we are talking about, and agreeing on, the same group of people.


Nothing to apologize for... makes for interesting conversation.

 

Just a comment in general...

Why does the American public want to kick-@ss and fight when an injustice is done to a homeless man, a battered woman, the elderly are scammed, or a child is neglected, but then these same people turn their heads when an injustice is done to thousands of hard-working people with a PENCIL?

It amazes me that people still have cause to defend Ken Lay and Dennis Kozlowski despite printed emails, taped phone convesations, and even the admission of their intent to deceive shareholders and workers.

Likewise, there are people in this world who actually think that a CEO deserves $50 to 100-million to sit in an office and sign corporate policy papers that lawyers, CPAs, PhD's, and technically skilled people below him studied, drafted, and implemented.

Look at this slideshow of CEOs ranked best by Forbes... Look who they are (you won't recognize the names) and look what they are making (in $millions), then look at how there companies are performing. (Harley-Davidson's CEO is in this list)... LINKY

Now look at this group of highest paid CEOs... LINKY

I'm sorry, but nobody deserves $148-million in one year for any job in a publicly-held company.
Do you know how many people this man could feed, house, or help and STILL live beyond his means? Do you know how many plant-floor jobs taht could be for working people? I can tell you REAL FAST how Colgate-Palmolive can add $100-million to their bottom line next year... money that could go to worker health care plans, to buy new tooling and increase productivity, money that could be distributed straight to the shareholders. To his credit though - at least Mark has been in his office for 20 years - and THAT shows he is committed to the company... and it appears to be benefitting from his devotion too.

I dunno... as I said earlier - I don't begrudge any man who becomes wealthy through hard work and effort, but I can't stand to see people making gross amounts of money for adding little to nothing to a company's product or their bottom line - ESPECIALLY when that person has alterior motives (a.k.a. cut-and-run) or unethical intentions (a.k.a. fleecing the company like Ken Lay or Ross Johnson).

BTW - did ANYBODY in this forum ever look into the book/movie I suggested with James Garner called "Barbarians at the Gate"? True story about how Ross Johnson took over at RJReynolds Tobacco Company and acted from the inside to have it bought out - costing the employees and investors hundreds of millions in losses, but he came out $49-million ahead and with a new deal waiting when he left RJR. He ruined tens-of-thousands of lives, and never got a charge against him or a fine imposed for anything... it's just not right.

 

So, what's your point?

JK, I agree. tens of millions of dollars, for what? A lot of them do it soley for the money. This is they person that is making decisions that affect hundreds of thousands of lives, in some cases, and they are bribed to do their job with tons of money.

is 500k too little for anyone to live on?

 

..welcome to my world...
Ya know, they have those b@$tard$ from Enron on tape, "laughing" at the poor people they were gonna rip off...
(I can't say unions are perfect, but we can't say they aren't necessary either...see why I get a little Poed sometimes.)
But sometimes you have to do what FDR said; "When you get to the end of your rope, tie a knot in it and HANG ON!"..

 

 

well.....lotsa interesting points in this thread.

My dimes: (I never limit anything to 2 cents!)

When the company is in trouble, everyone must make some sacrifices. It's that simple.

I think that some CEOs and top managers get a bad name from the ridiculous amounts of money that some other CEOs make......Lucent comes to mind....as does some of the airlines....U.S. Airways being one of them.....Kmart another......Enron......

See....the problem is that there ARE some CEOs and top execs making too much money.

I personally don't think Bob Lutz and Rick Wagoner make that much money.

Here's what most people don't realize: these guys are 'programmed' from the time they get up in the morning (Dark O'Clock A.M.)...until they go to bed at night. I've seen their schedules.....it's unreal and I really don't know how they do it. Every minute is booked.....any free time is spent going thru piles of paperwork...emails...etc. Further, the pressure they're under is intense to say the least.

now.....someone said, I believe, that there is not a shortage of executives out there.........that's a scary thought. We only need to go back a few years when Mr. Zarella (I hate even typing his name) brought 'outside' executives into GM....the result was disaster. Now.....I gotta tell you...most of these people were not 'bad' people.....but they had little, if any, understanding of the inner workings of a company like GM........and while some of them were fast learners, there's a sense of urgency here like never before........we do not have time for outsiders to 'learn the ropes.'

Just my loose change................

 

Couldn't agree more. I think you'll notice that I always indicate looking inside for the talent that could be move up the ladder.

It has been my experience that someone who has worked his way up from a floor sweeper to become a plant manager is often the best guy for the job. We've all heard these Cinderella-type stories where a guy started sweeping the floors as a part-timer, worked himself through school, ran machines with a trade skill, became a group leader, then a shift manager, then became production manager while going to night school for a BS or MBA degree, then getting the promotion to plant manager or corporate officer. We had one of these situations at a plant in Shelby NC - this guy just retired last year (again... they bought him out of retirement to help us restructure3 years ago). He started out as a machine operator, and in 20 years had worked and earned himself Plant Manager position. EVERYBODY loved this guy... the operators saw him as "one of them that made it", and he would go out in the plant and talk/associate with them instead of looking down his nose at them. Likewise, he was honest and straight-shooting, so he was "easy to control" from executive management at our headquarters. I don't think there's any way they would ever make him a Director or Corporate Officer though... he was incorruptible and refused to throw his coworkers out in the cold. He found ways to make things work out instead of "cut and slash".

The plant ran excellent for 8 or 9 years under his watch. Personally, I'd have voted him onto our BOD in a heartbeat.

It's also keen to see that some of the best-rated CEOs (and companys too FTM) seem to have many years of service with the same company. Better yet, they seem to be the people who FOUNDED their own company and are staying in it to make it work. It just goes to show you that when a talented individual truely has the company's best interest - and the employees that make it run - at heart, great things can happen. But when they don't have a vested interest, or quite frankly just don't care, it can negatively affect everyone involved with said company. Problem is - the good ol' boy club doesn't discern between those who care and those who are just greedy - they pick and choose based on golf scores, family trees, and favors.

 

Good points, and I'm happy to hear that GM execs have your support.

However . . .

If they are "programmed" as you say, I'm even more scared about their decision-making abilities. You cannot make your best decisions in the off-minutes between pressure-filled meetings and assorted crises. And, if their schedules are so full, this is their choice. They have the power and authority to change this. I may be missing many factors that play into it, but run-ragged top execs, playing the schedule-crunch game, doesn't seem like a great environment for sound, reasoned decision-making.

And yes, I'm the one who said there's no shortage of talent. NOT executives, but brilliant and motivated people who may come from inside the industry or outside. As far as them "learning the ropes," I think there's ample evidence that fundamental change is what is needed, rather than propping up a failed system (ongoing huge lead times for car development, continued really dumb decisions like the Z06 brakes and the 3800 in the Lucerne, a seeming inability to use media to effectively change the perception of GM) . . .

I wish you nothing more than success, both personally and as a corporation, but I have to speak out. We're entering a new era—and I would like to see GM come out on top!

 

Ricks salary cut took him down 50%, that's still over 1m. For a company that is losing money, that IS too much.

The pressure is completely different if you like your job. They are paying way too much money if these guys don't like their jobs, and still too much, if they do.

Pressure is part of the deal of being a CEO. The best CEOs and Execs face pressure and thrive. I've yet to see Wagoner make any big decisions that will alter the (bad) course that GM is on.

CEO's face the dilema of when things go bad, it's their fault. Well, yes kind of, because they obviously didn't show the right leadership skills. If it was decisions made by others, then he had the wrong people making decisions.

I agree about bringing outsiders in. However, Bringing in the right CEO from the outside even, would step down if he thought a better suited replacement was ready to take over, for the good of the company. In a time where CEO's often sabotage or do not talk to successors, this is a quality that will speak volumes about a CEO's intent. The right CEO could come from the production lines or from the Board room (However viewing the board room, there is no GREAT CEO's there either).

You are looking for a CEO period. Someone who can cope with the pressure and make decisions period. I think they should look for someone who Wants the company to succeed first and foremost, then who wants to be there. Even if it is an outsider, he will not be making the key decisions on his own, he will need to get the entire leadership team (all levels) on the same page.

A CEO who comes in to a company (or is moved up to CEO) that does not first get all the right leaders in the right seats, is not a great CEO, but just someone keeping the seat warm until the next one gets there.

A company is a team of people playing the same game, a CEO is the Coach, if the coach fails to put the right people in their best positions, the team will not be as good as it can be.

When you read about CEO's firing family members and moving people up from inside and bringing in people from the outside and shifting things around, when they get it right, you see dramatic results. Not overnight, but in years, but it is not up, then down, it is usually up and up and up.

It's kind of like this, take a young kid who can do Calculus, then ask him to do a Mathmaticians job. If he can just barely do the problems, then it will be stressful hard frustrating and full of long days. On the other hand if you have someone who is completely capable in the problems AND loves doing it, it will not be stressful, it will not be hard, and they will love their work. Both people can do it, but which would you rather have doing it, if you depended on them?

 

Some of what I’ve read here has made good points but frankly, I’m appalled by some of the comments submitted in this thread.

Many of the comments seem to be rooted in envy, jealously, and a disheartening lack of understanding of the principles that made the United States the preeminent economic power in the world. Suggesting such things as salary caps or making statements that certain executives “make too much” are simply asinine.

Private ownership (rather than government ownership), competition and the opportunity to make ANYTHING of your life that you want is what has made America strong and the only things that will keep it strong if, in fact, it can be saved from those who’s policies would make the United States a socialistic state were those policies enacted.

Who are any of YOU to decide how much an executive of a major corporation should make?

Who are any of YOU do decide it isn’t “fair” for a CEO to make $X.XMillion/year while Joe Worker makes $15/hour?

Blaming your situation on “old boys club” rules and suggestions that high-income earners are there only by accident of birth or luck are simply rationalizations for your own lack of accomplishment.

Only the owners of a company (stockholders) have the right to decide how much they can and should pay their employees (from CEO to janitor) and if they make bad choices they will pay the price. We as consumers certainly have a voice by virtue of our purchasing decisions but we have no right to dictate because we aren’t taking the risks of ownership.

Are there bad and/or “overpaid” CEOs – of course there are. Do some people have an automatic advantage because of the family they are born into you – sure they do.

So what?

If you want to make more money or be more successful (by whatever standard you measure success) then the only person standing in your way is the man or woman you see in the mirror.

 

I see them(ours) sometimes being lead through our plant by a group of execs, almost at a run...I know what you mean. That can be bad, as the impressions they develop from their 'limited' exposure to their work environment, can lead them to the wrong conclusions and make bad decisions. Especially if they rely too much on supporting execs to give them a true picture of what they are deciding.

Then there's the "politcally correct" pressure, (I assume) for them to make decisions that correspond to what the rest of the industry's doing...often a good CEO who has the courage to break tradition, can become an icon, and set a better trend for an industry...but if they're playing "catch-up" all the time, there's little time for forethought.

You bring up a good point about a CEO or top exec needing to know his company...but how many company's have a setting to grow up, or 'groom' upper management???
Most seem to come from the, "It's not what you know, but WHO you know", school of thought and training. I've seen, at our company, GOOD management people and engineers, get passed up for a higher 'degree' holder, with little knowledge of the inner workings of ANY company...and usually lost out on some really good, talented people. So yeah, I see your point too.