WaMu Exec gets huge exit bonus

[dukebound85]

:mad:
http://blogs.moneycentral.msn.com/topstocks/archive/2008/09/30/the-best-temp-gig-in-history.aspx

this is exactly what should NOT be happening

[Peace]

That's sick.

[TheAnswer]

I'm all for severance packages for these guys.

I'd like said packages to contain their heads.

[yg17]

I'm all for severance packages for these guys.

I'd like said packages to contain their heads.


I'd rather it contain their balls instead. Then they have to live with their mistake.

[joepunk]

Creditors in Washington Mutual Inc.'s bankruptcy could go after a $16.5 million cash severance payment promised to ousted CEO Kerry Killinger, experts said. Link (http://seattletimes.nwsource.com/html/businesstechnology/2008217710_wamu01.html)

[dukebound85]

Link (http://seattletimes.nwsource.com/html/businesstechnology/2008217710_wamu01.html)

thats good and all but what about the current ceo, Alan Fishman, getting his mega buy-out?

[marbles]

:mad:
http://blogs.moneycentral.msn.com/topstocks/archive/2008/09/30/the-best-temp-gig-in-history.aspx

this is exactly what should NOT be happening


What you expect ? , nothing changes ..will always be ' jobs for the boys' and the 'boys' always get paid , regardless.

[TheAnswer]

I'd rather it contain their balls instead. Then they have to live with their mistake.

Yeah, they should change severance package to package severance.

[ucfgrad93]

This is outrageous. These "golden parachutes" need to be outlawed.

If that wasn't outrageous enough, consider this: Fishman started the job three weeks ago. I never saw the employment ad Fishman answered, but it must have read something like this:

WANTED: Top executive for train-wreck bank about to be seized by federal regulators. Must be able to look busy while FDIC sells business from under you. Previous experience with angry shareholders sitting on worthless stock a plus. Perks: $7.5 million hiring bonus and $11.6 million cash severance.

Fishman got the best temp gig in history. He gets to keep the bonus and severance pay, though he must stay on the job while JPMorgan Chase completes its purchase of WaMu's banking assets.

To be fair, Fishman wasn't the one that took WaMu down a path lined with toxic mortgages and other bad assets. No, that role belonged to former CEO Kerry Killinger, who received $54 million over five years before leaving earlier this month. He's eligible for around $20 million in severance pay.

[Don't panic]

This is outrageous. These "golden parachutes" need to be outlawed.

communist!
:D

[mactastic]

:mad:
http://blogs.moneycentral.msn.com/topstocks/archive/2008/09/30/the-best-temp-gig-in-history.aspx

this is exactly what should NOT be happening

This is outrageous. These "golden parachutes" need to be outlawed.
Why all this hatred towards the rich? Aren't companies allowed to compensate their executives as they see fit? This is the free market in action, why would you conservative leaning folks want to interfere with it?

Isn't outlawing this practice the antithesis of the free market? And wouldn't that presume that the government knows better than shareholders how to spend shareholder monies? :confused:

[dukebound85]

Why all this hatred towards the rich? Aren't companies allowed to compensate their executives as they see fit? This is the free market in action, why would you conservative leaning folks want to interfere with it?

Isn't outlawing this practice the antithesis of the free market? And wouldn't that presume that the government knows better than shareholders how to spend shareholder monies? :confused:

well seeing how WaMu just failed and that taxpayer money is about to be used to save these banks, it is a little sickening to think that after 3 weeks and the failure of the bank, that the CEO will be rewarded handsomely


yes i have no problem with free markets doing as they wish, including giving mega bonuses to these guys. HOWEVER, it is not "free markets" when the government is steeping in to rescue failed institution using taxpayer money and yet the failed institution still gives out these mega bonuses funded by you and me

i like your sig as its true. now if the profits AND losses are privatized, i have no problem with these bonuses as they are reaping their rewards and distributing them as they see fit

[marbles]

Why all this hatred towards the rich? Aren't companies allowed to compensate their executives as they see fit? This is the free market in action, why would you conservative leaning folks want to interfere with it?

Isn't outlawing this practice the antithesis of the free market? And wouldn't that presume that the government knows better than shareholders how to spend shareholder monies? :confused:

No hatred toward the rich ....more displeasure at the state of affairs that are affecting men women & children worldwide because of the action of the few ......and the few are still getting paid ..regardless.

"The free market" ...meh.


Sometimes a government needs to actually govern ....... you know , to stop this kind of thing from going on .....it's a joke !.

[nanofrog]

$19M for 3 weeks of work.
Why can't I find jobs like that? :D :p

On a serious note, this is just insane. Especially the former CEO getting $74M for running WaMu into the ground. :mad:

[ucfgrad93]

well seeing how WaMu just failed and that taxpayer money is about to be used to save these banks, it is a little sickening to think that after 3 weeks and the failure of the bank, that the CEO will be rewarded handsomely


yes i have no problem with free markets doing as they wish, including giving mega bonuses to these guys. HOWEVER, it is not "free markets" when the government is steeping in to rescue failed institution using taxpayer money and yet the failed institution still gives out these mega bonuses funded by you and me

i like your sig as its true. now if the profits AND losses are privatized, i have no problem with these bonuses as they are reaping their rewards and distributing them as they see fit

Agreed.

[it5five]

Please correct me if I'm wrong, but WaMu didn't get any government money for a bailout. They were bought by JP Morgan Chase. So if I have my facts straight, you free-marketers still have no room to speak about exit bonuses.

[freeny]

$19M for 3 weeks of work.
Why can't I find jobs like that? :D :p

On a serious note, this is just insane. Especially the former CEO getting $74M for running WaMu into the ground. :mad:

Thats $1256.61 per minute assuming they worked 24 hours a day for those three weeks.

[nanofrog]

Thats $1256.61 per minute assuming they worked 24 hours a day for those three weeks.
Not bad, especially for just signing a few pages here and there and answering phones. ;) :p

Of course, if the person on the other end of the phone was a major shareholder and highly pissed, the stress levels would have been through the roof. ;)

[Unspeaked]

Please correct me if I'm wrong, but WaMu didn't get any government money for a bailout. They were bought by JP Morgan Chase. So if I have my facts straight, you free-marketers still have no room to speak about exit bonuses.

I'm guessing the chance to pawn off some of the bad MBS WaMu held to the US government might have had something to with their purchase.

[takao]

This is outrageous. These "golden parachutes" need to be outlawed.

something which is actually considered in france after a few similiar (though less outrageous cases)

surprisingly for once i agree with Sarkozy

[mactastic]

well seeing how WaMu just failed and that taxpayer money is about to be used to save these banks, it is a little sickening to think that after 3 weeks and the failure of the bank, that the CEO will be rewarded handsomely
I agree. I just have a hard time believing all these new converts to government oversight. ;)


yes i have no problem with free markets doing as they wish, including giving mega bonuses to these guys. HOWEVER, it is not "free markets" when the government is steeping in to rescue failed institution using taxpayer money and yet the failed institution still gives out these mega bonuses funded by you and me
Vee are all socialists today, komrade...

i like your sig as its true. now if the profits AND losses are privatized, i have no problem with these bonuses as they are reaping their rewards and distributing them as they see fit
If they'd accept the risks of their actions, I wouldn't have a problem either. But we've seen this pattern over and over. The fat cats that can buy access to power never seem to have to suffer the consequences of their bad decisions. They are more than happy to keep all the profits (and scream bloody murder about jackboots and stealing from them at the point of a gun if you even so much as consider taxing them a little more); yet will gladly pass the bill for the disaster they caused on to the American taxpayer.

I'd also be a little more sympathetic if we didn't just enact stricter bankruptcy laws because you just can't trust the little guys to take personal responsibility for their decisions. The major banks were largely in favor of this new bankruptcy law at the time. Now they want what they would not provide to the little guy.

[dukebound85]

I agree. I just have a hard time believing all these new converts to government oversight. ;)



well im still not a convert to government oversight, but that is especially the reality at the moment and as such, it should be handled appropriately

If they'd accept the risks of their actions, I wouldn't have a problem either. But we've seen this pattern over and over. The fat cats that can buy access to power never seem to have to suffer the consequences of their bad decisions. They are more than happy to keep all the profits (and scream bloody murder about jackboots and stealing from them at the point of a gun if you even so much as consider taxing them a little more); yet will gladly pass the bill for the disaster they caused on to the American taxpayer.

I'd also be a little more sympathetic if we didn't just enact stricter bankruptcy laws because you just can't trust the little guys to take personal responsibility for their decisions. The major banks were largely in favor of this new bankruptcy law at the time. Now they want what they would not provide to the little guy.

i agree

[OutThere]

I'd rather it contain their balls instead. Then they have to live with their mistake.

Yeah, they should change severance package to package severance.

Here in France we had a good visual rendition of this situation hit the newsstands today:

http://www.sinehebdo.eu/images/une-sine-hebdo-4.jpg

Roughly "That they hang from their golden balls."

http://www.sinehebdo.eu/ 140,000 copies everywhere in france.

[iShater]

* must refrain ... from screaming ...* :eek: :mad: :eek:

[mactastic]

well im still not a convert to government oversight, but that is especially the reality at the moment and as such, it should be handled appropriately
Which makes me wonder why people such as yourself (and you are far from alone in this) are openly advocating government oversight in this situation. Is it political expediency, so as not to wind up on the wrong side of public opinion on the matter? Is it a change in your views, in that there are some situations so extreme that government intervention is the only solution? Or something else entirely?

I'm curious why THIS situation in particular has so many free-marketeers not just accepting government oversight as a fait accompli, but openly advocating for it.

The mining disasters we've seen over the last few years can be, at least in part, traced back to weakened government oversight. The fake "energy crisis" we had in California a few years back is directly tied to deregulation. The airlines were deregulated years ago, and have had to come back for handout after handout, while still not managing to get themselves on solid financial footing.

And yet the "deregulation express" has chugged onward.

This isn't necessarily directed at you in particular...

[.Andy]

well seeing how WaMu just failed and that taxpayer money is about to be used to save these banks, it is a little sickening to think that after 3 weeks and the failure of the bank, that the CEO will be rewarded handsomely


yes i have no problem with free markets doing as they wish, including giving mega bonuses to these guys. HOWEVER, it is not "free markets" when the government is steeping in to rescue failed institution using taxpayer money and yet the failed institution still gives out these mega bonuses funded by you and me
So as long as the public doesn't step in, you're happy with CEOs being handed large severance packages when their companies collapse? It's only that there is the possibility of a public bailout in this case that has you up in arms?

[dukebound85]

So as long as the public doesn't step in, you're happy with CEOs being handed large severance packages when their companies collapse? It's only that there is the possibility of a public bailout in this case that has you up in arms?

im not happy but it is more justifiable imo

a bank thats collapsing and has no public bail out ideally in my mind wouldnt offer such high packages automatically since it would be trying to salvage itself. i realize there's contracts and the purpose of the ceos is to generate profits for the bank which is what makes the packages justifiable at the time. talent doesnt come cheap. but i think to solve it, there should be a provision to negate the severance pay if the bank fails or reduce it greatly


im not going to argue with you but i dont think that ceo's should be rewarded extravagantly while the bank fails and receiving a bail out from the american taxpayer. if the bank fails and the losses are privatized, then they should be bound by the contracts they gave the ceos. it wouldnt take too many bank failures for the bank to stop offering such high packages if the ceo didnt improve the banks buisness. i think it was the ecomonic boom during the 90's that gave rise to such packages in the first place when bank failures were relatively uncommon. ill have to look it up to see if thats a correct assumption

[leekohler]

it wouldnt take too many bank failures for the bank to stop offering such high packages if the ceo didnt improve the banks buisness.

How many banks have failed? And how many golden parachutes have been given? Seems that so far, failure hasn't put an end to this ridiculous stuff.

[LethalWolfe]

The mining disasters we've seen over the last few years can be, at least in part, traced back to weakened government oversight. The fake "energy crisis" we had in California a few years back is directly tied to deregulation. The airlines were deregulated years ago, and have had to come back for handout after handout, while still not managing to get themselves on solid financial footing.

And yet the "deregulation express" has chugged onward.

Add the cable industry and media ownership (TV stations, newspapers, radio stations, etc.,) to the list of deregulation failures. IMO government doesn't need to be all in control or anything like that, but government should have enough regulatory power to keep people from 'working the system' to the detriment of everyone else. Never underestimate the power of greed.


Lethal

[Rodimus Prime]

The mining disasters we've seen over the last few years can be, at least in part, traced back to weakened government oversight. The fake "energy crisis" we had in California a few years back is directly tied to deregulation. The airlines were deregulated years ago, and have had to come back for handout after handout, while still not managing to get themselves on solid financial footing.

And yet the "deregulation express" has chugged onward.

This isn't necessarily directed at you in particular...

California engery crisis was not just because of deregulation. It was a mixture of things. One of the things is California payed dearly for the fact they refuse to let power stations be built in the state so they where required to buy all the power for the state on the open market.
2nd power that year was in short supply. There just was not as much on the open market to buy. In other states the power companies where having to buy power on the open market to meet the demand for a great price than they could sell if for.

Like it or not deregulation was not the cause of the problem it just was the final straw. Mind you I expect the bit I put up there to go completely ingoried and people refusing to accept that it was a lot more than deregulation.

I bet even with out deregulation the problem would of happen there. Less power on the open market for the state to buy.... and a state the refuses to let much needed power plants be built. Just a warning to everyone in califorina It is going to happen again when states like Texas which sells quite a bit of power there is starting to run short on supply as well........

[mactastic]

California engery crisis was not just because of deregulation. It was a mixture of things. One of the things is California payed dearly for the fact they refuse to let power stations be built in the state so they where required to buy all the power for the state on the open market.
2nd power that year was in short supply. There just was not as much on the open market to buy. In other states the power companies where having to buy power on the open market to meet the demand for a great price than they could sell if for.

Like it or not deregulation was not the cause of the problem it just was the final straw. Mind you I expect the bit I put up there to go completely ingoried and people refusing to accept that it was a lot more than deregulation.

I bet even with out deregulation the problem would of happen there. Less power on the open market for the state to buy.... and a state the refuses to let much needed power plants be built. Just a warning to everyone in califorina It is going to happen again when states like Texas which sells quite a bit of power there is starting to run short on supply as well........
Because of the deregulation laws passed, power companies were forced to divest their generation capabilities. These generating plants were purchased by companies that then manipulated the newly-deregulated market. Lawmakers expected that the cost of electricity would go down due to the purported effects of deregulation - namely increased competition. They capped the price of power at pre-deregulation amounts, and also mandated that if power was scarce, that it be purchased on the spot market. Companies like Enron, Reliant, and Duke who were the ones who had bought up the generating capacity that was forced under the deregulation laws, began to manipulate the production of energy to force California to purchase large quantities of power on the spot market at greatly inflated prices.

Had deregulation not occurred, there would not have been a fake "power crisis". Because the lobbyists who helped legislators craft the law structured it the way they did, it provided a disincentive to increase generating capacity. It wasn't, as is often claimed, because the DFHs in California refused to allow new power plants, it was because the law that was written capped prices, and thus there was no incentive for any company to invest in new plants. There was more money to be made by restricting the supply and profiting off the spot market.

Had we just left things well enough alone, power generation capacity would have increased as it was doing prior to deregulation, and more than likely would have managed to keep pace with the increasing demand.

[Rodimus Prime]

Because of the deregulation laws passed, power companies were forced to divest their generation capabilities. These generating plants were purchased by companies that then manipulated the newly-deregulated market. Lawmakers expected that the cost of electricity would go down due to the purported effects of deregulation - namely increased competition. They capped the price of power at pre-deregulation amounts, and also mandated that if power was scarce, that it be purchased on the spot market. Companies like Enron, Reliant, and Duke who were the ones who had bought up the generating capacity that was forced under the deregulation laws, began to manipulate the production of energy to force California to purchase large quantities of power on the spot market at greatly inflated prices.

Had deregulation not occurred, there would not have been a fake "power crisis". Because the lobbyists who helped legislators craft the law structured it the way they did, it provided a disincentive to increase generating capacity. It wasn't, as is often claimed, because the DFHs in California refused to allow new power plants, it was because the law that was written capped prices, and thus there was no incentive for any company to invest in new plants. There was more money to be made by restricting the supply and profiting off the spot market.

Had we just left things well enough alone, power generation capacity would have increased as it was doing prior to deregulation, and more than likely would have managed to keep pace with the increasing demand.

ummm then you care to tell me why there are where only 6 power plants in the entire state. Califorina was short on power plants long before they deregulated....

If you read articles about it not just about the one state with rolling black out you would of saw that multiple states where struggling to get enough power.

California still has very few power plants. Made worse that the power plants that power the state are all in other states. Still are to this day. Reason for this is California laws make it very difficult to build anything like that in the state. No other state has check points to stop you from bring in fruits from OTHER STATES. one thing at a boarder crossing but come on they are stopping you from bring them in from other states. Sorry but California rolling power problems where brought on by a lot more than just deregulation. There is a reason it is called the republic of California....

[Ugg]

ummm then you care to tell me why there are where only 6 power plants in the entire state. Califorina was short on power plants long before they deregulated....

If you read articles about it not just about the one state with rolling black out you would of saw that multiple states where struggling to get enough power.

California still has very few power plants. Made worse that the power plants that power the state are all in other states. Still are to this day. Reason for this is California laws make it very difficult to build anything like that in the state. No other state has check points to stop you from bring in fruits from OTHER STATES. one thing at a boarder crossing but come on they are stopping you from bring them in from other states. Sorry but California rolling power problems where brought on by a lot more than just deregulation. There is a reason it is called the republic of California....

Here's a little map for you. (http://www.energy.ca.gov/maps/power_plant.html) I'd count them, but it might take an hour or so, so you'll have to just accept that there are more than 6 power plants in the state.

California does make it difficult to build for a couple of reasons.

1. Seismic
2. 33 million people.

Without California's Central Valley, you'd be eating canned food 9 months of the year. California's border restrictions are hardly unprecedented. Florida recently destroyed thousands of orange trees on private property to protect the orange crop. It was a forced taking that is absolutely unheard of out here.

[takao]

and it goes on ... now the EU commission is thinking about discussing limits/caps to manager salary limits again .. after their 2004 recommendation to tie manager salaries more dependent on actual success, by law, wasn't really implemented

[atszyman]

I'll stop complaining about executive contracts when it becomes an option for everyone. When an engineer (like myself) can negotiate a signing bonus thats somewhere between 2-7x my annual salary and manage to put in a golden parachute for even more that would kick in if I were fired, quit, or the company went bankrupt.

It does bother me that top tier management makes so much more (I don't have a problem with superiors making more, but it is a bit ridiculous at this point) than the people at the bottom, but I can almost forgive that, it's when the bonuses and parachutes are handed out even though the company performs poorly. The first thing to get cut when the company doesn't do well are workers on the low end, and many times the top tier bonuses remain untouched despite the fact that just one $1 million bonus could keep 33 people in #30,000/year jobs for a year.

[Rodimus Prime]

Here's a little map for you. (http://www.energy.ca.gov/maps/power_plant.html) I'd count them, but it might take an hour or so, so you'll have to just accept that there are more than 6 power plants in the state.

California does make it difficult to build for a couple of reasons.

1. Seismic
2. 33 million people.

Without California's Central Valley, you'd be eating canned food 9 months of the year. California's border restrictions are hardly unprecedented. Florida recently destroyed thousands of orange trees on private property to protect the orange crop. It was a forced taking that is absolutely unheard of out here.

It could of been some where else I heard that 6 (could be built) but enviromental laws in California are among the strictest in the nation.

My understanding is California does not produce enough power as it is to meet its own needs.

Fact still stands that summer the spot market nation wide was painful and very expensive. It was not the only state hurting. My main point is the entire power criss was not just brought on by deregulation. It helped but it was just among other factors as well. One of which is the state can not produce enough power to meet demand.

[Rodimus Prime]

I'll stop complaining about executive contracts when it becomes an option for everyone. When an engineer (like myself) can negotiate a signing bonus thats somewhere between 2-7x my annual salary and manage to put in a golden parachute for even more that would kick in if I were fired, quit, or the company went bankrupt.

It does bother me that top tier management makes so much more (I don't have a problem with superiors making more, but it is a bit ridiculous at this point) than the people at the bottom, but I can almost forgive that, it's when the bonuses and parachutes are handed out even though the company performs poorly. The first thing to get cut when the company doesn't do well are workers on the low end, and many times the top tier bonuses remain untouched despite the fact that just one $1 million bonus could keep 33 people in #30,000/year jobs for a year.


First minor correction is the 1 million could only keep maybe 23 people employed at 30k a year. Do not fix burden on top of salary (benefits, SS, unemployment ect) but yeah still a lot of people. The WAMU getting that bonus with very little work I going to guess the contract was set up that way just no one expect them company to go under so quickly either.

I agree the golden parachutes are insane. It annoys me that when cuts come they will go after the middle mangers but god forbid that the CEO take a slight pay cut and get paid more reasonable wages. Something just wrong when they are making well over a 100 times a year what average person makes.

[mactastic]

ummm then you care to tell me why there are where only 6 power plants in the entire state. Califorina was short on power plants long before they deregulated....
LOL! Six plants in the entire state? Inform yourself before you spout such nonsense, would you please?

If you read articles about it not just about the one state with rolling black out you would of saw that multiple states where struggling to get enough power.
Huh? Can you please re-write this so it makes some kind of sense?

California still has very few power plants. Made worse that the power plants that power the state are all in other states.
Huh, what? The power plants that power the state are all in other states? You clearly do not know what you are talking about. There are two major power plants within 30 minutes of my location. You need to stop getting your talking points from the John Birch Society, or whoever is feeding you this nonsense.

Still are to this day. Reason for this is California laws make it very difficult to build anything like that in the state. No other state has check points to stop you from bring in fruits from OTHER STATES. one thing at a boarder crossing but come on they are stopping you from bring them in from other states. Sorry but California rolling power problems where brought on by a lot more than just deregulation. There is a reason it is called the republic of California....
Get it right... it's the Republic of Colly-fornia.

What fruit has to do with power plants I don't know, but since you asked, California is a little protective of it's agricultural industry. Which is in your best interest of course. We grow a lot of things here (more than 6 types of crops even!), and if something bad were to happen it could be devastating well beyond California. But that still doesn't explain why you're raising fruit to talk about energy. :confused:

Fact still stands that summer the spot market nation wide was painful and very expensive. It was not the only state hurting. My main point is the entire power criss was not just brought on by deregulation. It helped but it was just among other factors as well. One of which is the state can not produce enough power to meet demand.
Reading comprehension is your friend. If you go back and actually read what I said, instead of projecting your own biases onto my posts, you'll see that I said the fake energy crisis was DIRECTLY TIED TO deregulation. I did not claim that deregulation was the sole cause of the problem.

Because of the way deregulation laws were written (with the help of industry lobbyists) there were no financial incentives to build new supply. The financial incentives were to REDUCE supply. Power providers were required by law to divest their generating capabilities. Thus they were left at the mercy of the suppliers, who simply manipulated the markets to make it appear as if there was an energy shortage. Funny thing is, we've not had widespread rolling blackouts since. And new power plants are being built, despite the regulations you say are so punitive.

[joepunk]

WaMu CEO refuses $11.6 million severance package.

Link (http://seattletimes.nwsource.com/html/businesstechnology/2008221171_fishman02.html)

[Unspeaked]

I'll stop complaining about executive contracts when it becomes an option for everyone. When an engineer (like myself) can negotiate a signing bonus thats somewhere between 2-7x my annual salary and manage to put in a golden parachute for even more that would kick in if I were fired, quit, or the company went bankrupt.

It does bother me that top tier management makes so much more (I don't have a problem with superiors making more, but it is a bit ridiculous at this point) than the people at the bottom, but I can almost forgive that, it's when the bonuses and parachutes are handed out even though the company performs poorly. The first thing to get cut when the company doesn't do well are workers on the low end, and many times the top tier bonuses remain untouched despite the fact that just one $1 million bonus could keep 33 people in #30,000/year jobs for a year.

I don't think this is still their policy since they were sold to some conglomerate, but when Ben and Jerry's ice cream was still owned by Ben and Jerry, they had this wonderful policy that stipulated the highest paid employee (who happened to be the CEO) could make no more than 10 times the lowest paid employee's salary (who happened to be a mail clerk).

[takao]

I don't think this is still their policy since they were sold to some conglomerate, but when Ben and Jerry's ice cream was still owned by Ben and Jerry, they had this wonderful policy that stipulated the highest paid employee (who happened to be the CEO) could make no more than 10 times the lowest paid employee's salary (who happened to be a mail clerk).

well such policies makes sense to me ... after i read that in some companies the current ratio is 1:500 (after the ratio in the same company was 1:50 just 15 years ago)

[Unspeaked]

well such policies makes sense to me ... after i read that in some companies the current ratio is 1:500 (after the ratio in the same company was 1:50 just 15 years ago)

Totally.

If you pay your lowest paid employee a decent living wage - say, $35,000 - then the CEO can make $350,000, which is still a pretty good chunk of change.

I'd say the 10 to 1 rule should be passed into law, but I fear being called a Euro-socialist by some of the "less compassionate" posters here!

[Ugg]

Totally.

If you pay your lowest paid employee a decent living wage - say, $35,000 - then the CEO can make $350,000, which is still a pretty good chunk of change.

I'd say the 10 to 1 rule should be passed into law, but I fear being called a Euro-socialist by some of the "less compassionate" posters here!

I think that's fairly reasonable.

Much of the CEO overcompensation problem is rooted in a lack of effective corporate governance laws. Shareholders should have the right to vote on executive compensation.

[diamond.g]

Totally.

If you pay your lowest paid employee a decent living wage - say, $35,000 - then the CEO can make $350,000, which is still a pretty good chunk of change.

I'd say the 10 to 1 rule should be passed into law, but I fear being called a Euro-socialist by some of the "less compassionate" posters here!

I would think companies would just "outsource" all the "lower" paying jobs to get around that.

[heehee]

One of the reasons why I like my boss so much. He's the largest shareholder of the company and he doesn't take a salary or stock options.

[dukebound85]

WaMu CEO refuses $11.6 million severance package.

Link (http://seattletimes.nwsource.com/html/businesstechnology/2008221171_fishman02.html)

thats suprising in a good way

[iShater]

thats suprising in a good way

The report is not complete, but it sounds like he wouldn't be eligible for the severance anyway.

[balamw]

I don't think this is still their policy since they were sold to some conglomerate, but when Ben and Jerry's ice cream was still owned by Ben and Jerry, they had this wonderful policy that stipulated the highest paid employee (who happened to be the CEO) could make no more than 10 times the lowest paid employee's salary (who happened to be a mail clerk).

Just FWIW, it was originally 5X i.e. the lowest paid employee could make no less than 20% of the highest employee made, they upped it to 10X later. http://harvardbusinessonline.hbsp.harvard.edu/b02/en/common/item_detail.jhtml?id=392025 and then ultimately eliminated it when they got bought out by Unilever.

B

[LethalWolfe]

While I do think top executive salaries are way out of whack w/reality, I don't think government should come in and make a hard cap on how much they can earn. That just feels a little too heavy handed to me. Like another poster said though, maybe the stock holders should be able to vote on it.


Lethal

[dukebound85]

While I do think top executive salaries are way out of whack w/reality, I don't think government should come in and make a hard cap on how much they can earn. That just feels a little too heavy handed to me. Like another poster said though, maybe the stock holders should be able to vote on it.


Lethal

if you limit compensation, than other companies not in the US will be able to offer much more for talent

same with athletes. ive heard similar arguments how we should limit thier salaries and yet look what happens, european clubs can offer nba players comparable amounts if not more

[mactastic]

Fat lot of good the high-priced "talent" did in this case, eh?

I don't like the idea of government artificially capping compensation either. I wish more companies would take a responsible approach to executive compensation though.

[iShater]

While I do think top executive salaries are way out of whack w/reality, I don't think government should come in and make a hard cap on how much they can earn. That just feels a little too heavy handed to me. Like another poster said though, maybe the stock holders should be able to vote on it.


Lethal

Except that stock holder votes are worth nothing these days, and in many cases are non-binding.

if you limit compensation, than other companies not in the US will be able to offer much more for talent

same with athletes. ive heard similar arguments how we should limit thier salaries and yet look what happens, european clubs can offer nba players comparable amounts if not more
The problem is that this is not talent. Yes there are many visionary CEOs who do great things for their companies, but they are protected so that when they screw up they still walk away with millions. Even if they just hack and slash in a company, thus cutting "expenses", they get rewarded handsomely.

You are comparing athletes (workers) to CEOs? I think CEOs are more like club managers.

[balamw]

I think CEOs are more like club managers.
Lest we forget, being a club manager worked out pretty well for this guy http://en.wikipedia.org/wiki/Texas_Rangers_(baseball)#George_W._Bush_becomes_Managing_General_Partner. Largely on the backs of the taxpayers who footed the bill for the new stadium.

B

[LethalWolfe]

if you limit compensation, than other companies not in the US will be able to offer much more for talent
The average exec salary in the US already far out strips the average in the rest of the world so I wouldn't worry too much of execs jumping ship left and right. Also, Europe is looking to rein in 'runaway' exec salaries as well so a 'grass is greener' situation is unlikely.


same with athletes. ive heard similar arguments how we should limit thier salaries and yet look what happens, european clubs can offer nba players comparable amounts if not more
And eventually the non-US clubs will run into the same runaway spending problem that the US sports are trying to deal with. IMO CEOs and star athletes need to get less guaranteed money and more performance based incentives. If you can turn a team or company from zero to hero, yeah, you should get a fat paycheck. But if you are a bust you shouldn't get a multimillion dollar check on your way out the door and a rookie who's never played a down in the NFL shouldn't get more money than a veteran player who's been to the ProBowl a few times. Also, honestly, how many top shelf pro athletes want to compete outside of the NFL, NBA, MLB, or NHL? MLS is the only major league sport in the US that I can think of that has trouble attracting top tier talent.

Except that stock holder votes are worth nothing these days, and in many cases are non-binding.

Talking about new ways of doing things usually implies that current ways of doing things will have to change. ;)


Lethal

[atszyman]

Totally.

If you pay your lowest paid employee a decent living wage - say, $35,000 - then the CEO can make $350,000, which is still a pretty good chunk of change.


This would also keep them out of that pesky top tax bracket that punishes so many people for making too much money. We'd be saving them the punishment on paying $0.02 more on every dollar that they earn above $357,700. It's all for their own good, since we've been told many times how the progressive tax scale just punishes those at the top. We should keep those masochists from having to endure that punishment, they might hurt themselves.

[nanofrog]

This would also keep them out of that pesky top tax bracket that punishes so many people for making too much money. We'd be saving them the punishment on paying $0.02 more on every dollar that they earn above $357,700. It's all for their own good, since we've been told many times how the progressive tax scale just punishes those at the top. We should keep those masochists from having to endure that punishment, they might hurt themselves.
Nice! :D

[dukebound85]

Also, honestly, how many top shelf pro athletes want to compete outside of the NFL, NBA, MLB, or NHL? MLS is the only major league sport in the US that I can think of that has trouble attracting top tier talent.


the nba is starting to feel that effect moreso than they have in the past

http://sports.espn.go.com/nba/news/story?id=3501488

http://www.guardian.co.uk/sport/2008/aug/08/olympicsbasketball.olympics2008

http://sports.espn.go.com/ncb/news/story?id=3491998

[gotzero]

Their exit packages are being withheld.

[LethalWolfe]

the nba is starting to feel that effect moreso than they have in the past

http://sports.espn.go.com/nba/news/story?id=3501488

http://www.guardian.co.uk/sport/2008/aug/08/olympicsbasketball.olympics2008

http://sports.espn.go.com/ncb/news/story?id=3491998
Childress is a bench player and Jennings is too young for the NBA draft and wasn't sure if he'd get accepted into Arizona so he decided to play in Europe until he's eligible for the NBA instead of going to college. If LeBron gets his $50mil/yr wish then I hope the Euro leagues have some super deep pockets because that's going to be the standard that all the other A-list NBA stars are going to want for their services.

I don't follow basketball very much but the Euro teams seem to be in the same spot that the MLS is in the US. Lots of growing pains and willing to throw big money around to try to attract not quite top tier talent from better known leagues around the world. But that big money contract isn't sustainable. If MLS offered up tons of deals like the one Beckham got (250mil/5ys) could they attract more international talent? Of course. But that would bankrupt the league in no time (the MLS only allows 1 'super contract' per team). There is a reason so many pro leagues around the world have salary cap rules.

The problem w/rigidly following the 'what the market will bear' philosophy is the market will naturally be pushed to the point of failure and once it fails you might not be able to fix it. The North American Soccer League (http://en.wikipedia.org/wiki/North_American_Soccer_League) is an example of how *not* to run a pro sports league.


Lethal

[solvs]

but i dont think that ceo's should be rewarded extravagantly while the bank fails and receiving a bail out from the american taxpayer.
Well, the market isn't going regulate itself. If only there was some kind of, I don't know, governing body to provide some sort of oversight by using already existing regulations. Nah, that would never work. We should just give them money and let them do whatever they want when they collect the money and want the market to regulate themselves. Until they want more money. ;)

Our company that serves a very large client (that's totally screwing us out of money, but are notorious for doing so, so it's not like the company should have been surprised) just laid off 3 people. 5 if you count the 2 who were hired, but told not to show up after all 30 minutes after receiving e-mails with info on when they start and to where they report. Something our bosses knew, but couldn't tell us for a week until the year end was over. Even after we met goal. They're trying to load us with even more work, even though we were busting out butts as it was, and obviously falling behind as we already needed more people and haven't replaced others who've left. We don't care though. Our jobs can go at any time, which they constantly remind us, and more "massive layoffs" are coming. But they could have easily let one of the execs go, have all 5 of those people (and then some) back, and still have money left over. I often wonder how anything gets done in this country. Based on what I've seen in my many jobs (used to temp because my industry is very unstable) I don't think much does.

Good job executives, we're slowly becoming Mexico. :rolleyes:

[LethalWolfe]

Our company that serves a very large client (that's totally screwing us out of money, but are notorious for doing so, so it's not like the company should have been surprised) just laid off 3 people. 5 if you count the 2 who were hired, but told not to show up after all 30 minutes after receiving e-mails with info on when they start and to where they report. Something our bosses knew, but couldn't tell us for a week until the year end was over. Even after we met goal. They're trying to load us with even more work, even though we were busting out butts as it was, and obviously falling behind as we already needed more people and haven't replaced others who've left. We don't care though. Our jobs can go at any time, which they constantly remind us, and more "massive layoffs" are coming. But they could have easily let one of the execs go, have all 5 of those people (and then some) back, and still have money left over. I often wonder how anything gets done in this country. Based on what I've seen in my many jobs (used to temp because my industry is very unstable) I don't think much does.

In a related rant, why should the airlines cut back on executive pay when they can just nickel and dime their customers to death by charging for things that used to be free...


Lethal

[nanofrog]

What?!? Execs take a pay cut to keep their business competitive?
Never! :p

Possible excerpt from an Executive Board Meeting...
Lay off the lower level employees, cut all R&D, Quality Control, and nickle and dime the customers. Yeah, that'll do it. ;)

I swear, this has become the Executive Mantra. :rolleyes:

[solvs]

In a related rant, why should the airlines cut back on executive pay when they can just nickel and dime their customers to death by charging for things that used to be free...

Because people will begrudgingly pay it, and if they don't, the airlines can just ask for another bailout.