Well, just to be clear, I did state I think there should be a limit (my idea is for each company to set it's own limit). I have my reasons why.

You made a comment about the people who said so, I was one who said so. Then you stated "who are you to say...". Yes you did not use my screen name because I was one of several you were addressing. But you were addressing me. I replied and answered your question. You resorted to finely tuned expletives because you asked a question and I answered it.

Do you think CEOs should be paid 1/2 of the companies working capital? Just to be even more clear, in my scenario, only the executives who really pull the company together and turn it into a very high growth of very solid company, will stand to make a fortune. And they will have earned it, as opposed to someone coming in and making a few bad decisions and blaming it on the economy or the executive leadership (other than him/her self) and walking away with the capital of a small country.

Let's see who would still be rich by my standards, Bill Gates, Henry Ford, etc.... Because they built up the comapny and owned stock in it.

If a CEO walks in and makes 500k a year while the company is losing money and takes 250k and invests it in stocks, if the company moves back to WS average growth, they will make good money. If the company makes better growth, they will make better money. Also, if you can recall, I stated the income levels should rise too, when the profits do. So lets say the growth is at 2 times WS average and they are now investing 500k, or more annually.

Then, lets say the company does good, on level of 3M, Boeing, Coca-cola, HP, Intel, Merck, Motorola, Wall Mart, Walt Disney.... that is about 2.5 times the average market growth (over a long period of time). Theses are big name companies, and are decent at what they do. The CEO will make decent money and have sustained growth. Not fantastic growth, but steadily a little more than average. If they invest their money into stocks, by the time they retire they will be very wealthy.

Now lets say they do phenominal, and average about 8-10 times WS average growth. Like Fannie Mae, Gillette, Wells Fargo. In 10 years they will have tens of millions, and they will have earned it.

Instead of just paying every CEO as they walk in the door with bags of money, how about making them earn it? I am not saying only let them make 500k a year or only let them make 1m a year, let them make their millions on their own money, so they will have more of a reason to make the company do great.


But if you think it's just the American way to pay any schmuck who makes it to CEO level bucket loads of money, that's fine. I think they, more than anyone else should earn it for the fact that they have peoples retirement money riding on the company, peoples wages riding on the company, peoples lives riding on the companies future (not life and death usually but eating or not eating).

Does my suggestion in any way keep them from making tons of money? No. It just makes sure if they do, they will do it by making the company better, not by walking in the door.

 

I just figured that was next after the self promoting BS comment....

 

I would say it would be more than fair to base a CEO's salary on the performance of the company with some base minimum salary. That minimum would not be in the millions though. I just don't really believe in limiting CEO's salaries as a general practice though.

 

. I agree, it should be based on past sucess of his previous companies...BUT, it SHOULD hurt him if the company starts failing. I see cutting his salary in half, equal to grounding my kid in his room with his X-Box 360, his own stocked-fridge, and cell phone...he's like "go ahead, I don't care"...It HAS to cost them, or there'll be no URGENCY to turn things around.(IMHO)
So, he must take a good portion of compensation in company stock, and benefits...and those MUST reflect the company's health.

 

Don't ask.

At a point, folks should be rated on results and barring that, vision. Wagoner is a good sharp fellow, and what he makes doesn't change that.

Money is a report card and not a goal.

This reduction is what it is. Showbiz.

The showdown is Delphi and the UAW. Don't get wowed by theatrics.

The big drama is not what any CEO makes.

It's Delphi, organized labor and selling off GMAC to keep lending capital available.

 

If I misread the way it was intended - I apologize, but it's still kinda treading on thin ice as it was written.

No, salary caps is NOT socialistic. If anything, it is part of this "holy grail" you like to tout that gives a company the right to run themselves as they see fit... capitalism... free-enterpsise... what ever else you want to call it, but it's not socialism. Companys routinely set caps for levels of responsibility, job description, and seniority - maybe you have heard of "Hay Points" or "Salary Ranges" to poke a few out? If it's good enough for a company to set a policy that a Janitor's pay rate must be between $7.21 and $10.43/hour, then the same policy should apply to the CEO, CFO, CIO, and everyone else in the company. (FWIW, MY job has a salary range associated with it, and I am currently in the 70-80 percentile range, leaving me only a few tiny raises before they must reclassify me, promote me, or I stagnate.)
Be prepared - I'll argue this one 'til pigs fly because it affects ME, my STAFF, and everyone I know working in big companys. What's good for the goose is good for the gander.

I'm glad you can admit that people are THE issue.
I still disagree with your premise that (basically greed and the desire for material possessions) is what drives people to work hard, give things away, donate money, donate their time, and fight (to the death) for freedom and justice.

On a side note - my friends in Germany have their own business - $32-million last year in sales. Their goals are no different than mine. Same goes in Wigan England - those guys are doing the same thing. My wife and I have great friends in Costa Rica that are self-employed - their intent is the same, to earn a nice living, homes, and to provide foir their immediate and extended families. Most everything else goes into growing the company and/or profit-sharing with the employees.
How can you explain to me that their entrepreneurship is any different than a US person's, that their goals are any different, or that they are fighting/working any less than an American person? I don't think you can.
There is a special-something in American culture that causes people to do GREAT things on a daily basis, and it isn't greed.
American business just gets to reap some of the rewards that a culture like ours can bring - it's more unfortunate when greedy business operators take advantage of the tenacity of the American worker, and exploit them for no good cause... but I digress.

But I AM A SHAREHOLDER!!!
And I BOUGHT MY SHARES with hard-earned cash - they weren't given to me by the truckload as some kind of non-cash payment for services rendered, and I wasn't offered a chance to buy 99-million shares at 50% of market value with the company picking up the transaction fee and the other 50% of the price paid.

Is it so hard to see that those on top make policy and protect themselves so that they keep controlling interest and therefore decision-making capability? Have you never heard of "Golden Parachutes" or "Exit Strategies"? From the time they agree to be CEOs, the contracts and agreements start. If they don't slash and run, they in essence become "self-governing" and there are no checks and balances to allow the little-man (or people with less than 2.7-million shares of stock) to make any difference in policy. Crimony... Billionaire Kerkorian was only able to scrounge about 9% of GM stock, and all that bought him was a seat on the board.
This self-governing practice (of top-brass and financial insiders steering the ship as they see fit) is exactly what allowed Enron to go busted and drag down thousands of workers' retirement plans with them. I have been locked out of access to my 401k 3 times since 2000 due to various reasons, and I'm telling you I would personally be ready for an iron cage matchup with any CEO that excersized his stock options while I was locked out of mine for 2 weeks, and the bottom fell out because bad news broke while they had me locked out...

I'll make you a deal...
I won't use the "old boy's club" to rationalize my lack of success (meaning that I don't make $560,000 PER DAY) if you won't try to rationalize MAKING $560,000 PER DAY. Deal?

 

I generally agree with everything you wrote.

A question for us BOTH to ponder...
With all the cash GM has in the bank, why do they need to be concerned with borrowing in the first place?

If I had $10million in the bank, and needed $1-million to build a house at the beach... I wouldn't care if the bank wanted to loan me the noney or not. If a write-off of the interest is the only benefit, things can be arranged so that you pay yourself interest and still get that benefit... people do it all the time borrowing against their 401k plans.

So why the big deal about credit ratings and lending capital anyways?

 

Well, I'm not an accountant, so what would be my personel guess would be a notion that OPM, < other peoples money > is preferrable to using your own. Whether it's business or personal finances.

I would guess it's very counterproductive to lend money at a lower interest rate or, maybe better stated, tie money up doing one thing when you can be better off spending it to get a greater return than 3.9% or even 7+%.

I have no clue about GMAC and lending money and what's involved.

Maybe a bad anology I'm going to offer, but maybe it's somewhat on the mark.

I'm a solid citizen. Pay my bills, and have a very good credit score as a result. I can borrow money cheaply. I get 0% credit card offers on a rediculous frequency... IOW, I can borrow money for nothing. If lenders thought I wasn't trustworthy, I'd have to pay a lot to borrow money... < stay with me as this is an overboard example >

It makes more sense for me to buy something at a pace which "bottom lines" better than paying cash. I can invest or leave money in the "bank" rather than take it and lump sum spend it, which would essentially stop any investment potential my "own" money would have.
This kind of leeway works only if I'm considered a "golden" risk. If I have to spend too much to borrow money my options would be very limited. There's a point where the cost to "buy" money exceeds what the money could generate as an investment.

If I have $9 grand in an investment which will turn 8% in a quarter, and a $10k zero percent for a year credit card... I'd be foolish to take my $9k cash and buy something with it rather than using the great credit line an keeping my cash turning me a dollar.

Let's look at your $10 million in the bank/beach house purchase scenario... Let's say you can leave your $1 million in the bank and get 10% return by leaving it there...

Let's say you can borrow $1 million but you have to pay 3.5%... because you are a solid low risk perceived person. The beach house is meant to be a rental property to generate cash... and it's very likely it will net an ROI of 15% by buying the property.

I think it might boil down to buying money cheaply, turning a profit above the cost to "buy the money" and still remaining liquid where the $1 Million is making money in the process or able to be put to really lucrative widget invention is the preferred road to take..

+++No doubt I have made it abundantly clear I'm a "car" guy and not a "money" guy...

 

Well boys... chalk up another bunch of job losses and retirements washed away due to ONE DISHONEST CEO...


RadioShack to close up to 700 stores

"NEW YORK (Reuters) - RadioShack Corp. (NYSE:RSH - news), whose chief executive has admitted to lying on his resume, on Friday said quarterly profit fell 62 percent after a switch in wireless providers led to an inventory write-down, sending its shares to a nearly three-year low."

It's just one big company after another with these scandals at the top... hmmm.

BTW - David Edmonson is making $1.437-million in salary, and about $4.1-million in vested and non-vested stock options.
LINKY

Thank heavens for all the honest, upstanding, incorruptible people that are chosen to LEAD or companies and industries...

 

It's getting very hard for people to hide dishonest buisness practices...

the ever popular, "shrink into prosperity"...

 

GM isn't dishonest in my opinion. Let's not get unfocused and discuss electronics outlets which have nothing to do with cars... It's cars and the love of them that I'm concerned with.

 

No Doubt...

But the title of this thread contains "executive salaries", and their capacity to earn (or deserve) the rediculous salaries that some of them get is the main topic. And in all honesty (no pun intended), it's getting harder and harder to trust business leaders these days because of the crap they pull, like I just posted.

 

Here's the latest in the world of high finance...

GM top officials to get options


"GM gave Wagoner options to buy 400,000 GM shares at a price of $20.90, above Friday's closing price of $19.99 on the New York Stock Exchange."

Interesting approach... offer the stock option at a higher price than current trading...