Senator proposes cap on Wall street Idiots

[Dont Hurt Me]

Senator Claire McCaskill of Missouri proposes that if you accept the govt bailout, handout, give away;) you shouldnt make more $$$ then the president of the United States who's salery is $400,000 a year. She has my vote!

http://www.cnn.com/2009/POLITICS/01/30/executive.pay/index.html

[yg17]

Excellent idea! I love my senator :D

She had my vote in 2006 and she'll have my vote for as long as she wants it.

[Schtumple]

Sounds like a plan right there, good way to save companies, take the cushion from the executives for once, instead of laying off all the people that actually work hard... Still, even $400,000 is alot, surely after $250,000 a year there isn't that much you can spend it all on... (before you get to the frivolous stage...)

[jonbravo77]

Wish CEO's could be like Howard Schultz CEO of Starbucks. He is going from $1.2 mil a year down to $10,000 a year.

The company also said it was limiting executive compensation. In addition to eliminating 2008 bonuses for senior executives and holding their base salaries steady in 2009, Howard Schultz cut his own annual salary from $1.2 million in 2008 to under $10,000 a year in 2009. Meanwhile, the company said it would aim to sell all but one of its private planes.

But, he has made a buttload of money before this so.... you know... Nice gesture

Link (http://www.businessweek.com/the_thread/brandnewday/archives/2009/01/starbucks_cuts.html?chan=top+news_top+news+index+-+temp_news+%2B+analysis)

[mgguy]

Is this suppsed to make us feel good about giving away government money to private businesses? If so, I'm not feeling it. Did she vote for the bailout legislation?

[Thomas Veil]

As long as that means total compensation, including bonuses, stock, etc. ABC just did a story on the "other side" -- how Wall Street m/billionaire CEOs feel they're being unfairly portrayed. The prevailing opinion seemed to be, sure, we're taking home money by the planeload while everyone else is losing their incomes, but if you compare us to other m/billionaire CEOs, our compensation really isn't that outrageous.

That, my friends, is how far divorced they are from reality. They're not worried about comparing themselves to anybody other than other megawealthy people.

I tell ya, I just shakes my head about how those poor CEOs in the '50s, '60s and '70s were forced to survive on only a few hundred thousand a year. How ever did they manage to do it? It really is to weep. :rolleyes:

[Sun Baked]

Sounds nice, but it is shooting yourself in the foot.

As they say using the AIG example with the $1 billion retention bonus pool under fire, without enough pay and bonuses at the struggling companies to retain these employees ... it is a HUGE gift to the competition while severely handicapping the management talent pool responsible for creating the billions needed to repay the government.

The competition isn't even poaching these employees and scalping them from the companies with their headhunters, they are bailing out for more green across the street.

[MacNut]

I want to know why they didn't do this when they first approved the bailout. That should have been a stipulation from the start. Everyone was happy to write blank checks but nobody wanted to be held accountable.

Why doesn't Obama just make this an executive order?

[Ugg]

Sounds nice, but it is shooting yourself in the foot.

As they say using the AIG example with the $1 billion retention bonus pool under fire, without enough pay and bonuses at the struggling companies to retain these employees ... it is a HUGE gift to the competition while severely handicapping the management talent pool responsible for creating the billions needed to repay the government.

The competition isn't even poaching these employees and scalping them from the companies with their headhunters, they are bailing out for more green across the street.

Can you point out which financial companies are hiring? Much less those that are offering outrageous bonus packages?

Are you also inferring that the government shouldn't have any say in the businesses that they've bought into?

I hope that one thing that comes out of this nightmare is the rights of shareholders to approve of executive compensation. Shareholders have been shafted in favor of prima donna CEOs and boards.

[Sun Baked]

Zurich Financial, they've poached 100 AIG employees since the govt bailout, there also a bunch of other companies that have been hiring top talent and also been flooded by resumes from the lower level management.

But if you are going to limit salaries, bonuses, threaten employees with clawback provisions, etc. they will walk.

Other poaching employees that walk in looking for jobs are Ace Limited, New York-based Allianz Aviation Managers, Ironshore, etc. were also mentioned.

The retention bonuses were originally for the top 133 execs, and have been increased to cover 4200 people as they started walking away.

It'll take awhile to recover from the hefty bonus packages aimed at keeping people from going to the hedge funds, but if there is a bigger $ sign job out there people will jump.

A $400k job with threats of criminal charges if you screw up will have people looking at the $25 million paycheck. There is a reason people take a private job over a govt. job and if they basically say you must earn a govt wage because the govt is invested in the company ... it will hurt the company.

[Sedulous]

Zurich Financial, they've poached 100 AIG employees since the govt bailout, there also a bunch of other companies that have been hiring top talent and also been flooded by resumes from the lower level management.

But if you are going to limit salaries, bonuses, threaten employees with clawback provisions, etc. they will walk.

Other poaching employees that walk in looking for jobs are Ace Limited, New York-based Allianz Aviation Managers, Ironshore, etc. were also mentioned.

The retention bonuses were originally for the top 133 execs, and have been increased to cover 4200 people as they started walking away.

It'll take awhile to recover from the hefty bonus packages aimed at keeping people from going to the hedge funds, but if there is a bigger $ sign job out there people will jump.

A $400k job with threats of criminal charges if you screw up will have people looking at the $25 million paycheck. There is a reason people take a private job over a govt. job and if they basically say you must earn a govt wage because the govt is invested in the company ... it will hurt the company.

All true, but this is a bizarre reasoning for compensating the people that have failed so miserably. If their work is so great why have they failed so badly? I'm all for performance based compensation, but these corrupt greedy jerks twisted it to the point of plain old fashion thievery. If you hired a plumber and his work floods your house with sewage, do you pay him a bonus? These guys were giving themselves outrageous compensation even while their shoddy work sunk the economy. Screw ups like that have no place at the top.

[Badandy]

This is awful. The reason these companies fell isn't because some executives made a million a year instead of four hundred thousand.

Still, even $400,000 is alot, surely after $250,000 a year there isn't that much you can spend it all on... (before you get to the frivolous stage...)

You must not live in California. And you shouldn't decide what is enough. These executives oftentimes got there for good reason: they worked 16 hour days for 20 years and showed exceptional intelligence and all that good stuff. Just because some people think $5 million per year is excessive doesn't mean that a) it is or that b) it's any of your business. In the case of the bailout, you can make a case for the second one considering that the businesses will get tax money, but I feel a lot of people just say "damn all executives" and don't actually realize that they deserve more than a WalMart employee makes.

I'm all for performance based compensation, but these corrupt greedy jerks twisted it to the point of plain old fashion thievery.

A lot of people don't realize that what companies classify as executives often don't make strategic decisions for the course of the company. They're not all to blame.



As other people have said, bonuses are a way to retain top level employees. In many cases, incoming analysts make 60,000 per year starting salary and then another 50-60 thousand in end of the year bonus. You take that away you're basically stripping these companies of their talent and making them even more worthless.

A big cause of this whole meltdown was Sarbanes Oxley which declared that derivatives be valued at market value. The only problem was that they had to declare the value of them at ZERO which, while technically impossible (because they did have some value), forced companies to write down these as huge losses and they ran into cash flow problems. They couldn't operate with no cash and had to declare bankruptcy. Over-regulation at its finest.

Also not helping the case were federal laws that *encouraged* banks to lend to people with little hope of repaying. Let's also not forget the people who actually agreed to these mortgages. No matter what the mortgage houses said, these people had to know that the sums of money they were borrowing, on adjustable APR no less, could not be supported forever. Hell, as a college student, even *I* knew that. It just didn't make sense. A family making $50,000 per year shouldn't be buying an expensive house on an adjustable rate mortgage. When the rates went up, people defaulted on their mortgages which triggered the whole Sarbanes Oxley fiasco with the write downs.

[Sedulous]

This is awful. The reason these companies fell isn't because some executives made a million a year instead of four hundred thousand.



You must not live in California. And you shouldn't decide what is enough. These executives oftentimes got there for good reason: they worked 16 hour days for 20 years and showed exceptional intelligence and all that good stuff. Just because some people think $5 million per year is excessive doesn't mean that a) it is or that b) it's any of your business. In the case of the bailout, you can make a case for the second one considering that the businesses will get tax money, but I feel a lot of people just say "damn all executives" and don't actually realize that they deserve more than a WalMart employee makes.



A lot of people don't realize that what companies classify as executives often don't make strategic decisions for the course of the company. They're not all to blame.



As other people have said, bonuses are a way to retain top level employees. In many cases, incoming analysts make 60,000 per year starting salary and then another 50-60 thousand in end of the year bonus. You take that away you're basically stripping these companies of their talent and making them even more worthless.

A big cause of this whole meltdown was Sarbanes Oxley which declared that derivatives be valued at market value. The only problem was that they had to declare the value of them at ZERO which, while technically impossible (because they did have some value), forced companies to write down these as huge losses and they ran into cash flow problems. They couldn't operate with no cash and had to declare bankruptcy. Over-regulation at its finest.

Also not helping the case were federal laws that *encouraged* banks to lend to people with little hope of repaying. Let's also not forget the people who actually agreed to these mortgages. No matter what the mortgage houses said, these people had to know that the sums of money they were borrowing, on adjustable APR no less, could not be supported forever. Hell, as a college student, even *I* knew that. It just didn't make sense. A family making $50,000 per year shouldn't be buying an expensive house on an adjustable rate mortgage. When the rates went up, people defaulted on their mortgages which triggered the whole Sarbanes Oxley fiasco with the write downs.

The point is that A: People were being rewarded even when they performed poorly and B: They were not doing their jobs. Even as you said "A family making $50,000 per year shouldn't be buying an expensive house on an adjustable rate mortgage." It doesn't take the best and brightest banker to figure that out.

Look, part of the problem (particularly in the U.S.) is that executive salary became disproportionate to the actual value of their work. Last time I looked, in the U.S. the average CEO made 4000x the average salary while in Europe it was around 250x. In order to sustain that disparity, these guys started to cut corners everywhere possible. Offshoring of jobs was just the start. Banks never should have been allowed to sell real estate (nobody saw that conflict of interest?). And the feds should have kept their eye on the ball instead of being complicit in this whole debacle.

[Badandy]

I agree with most of your post except the end. I think it was too much government legislation that caused this. I know it's an unpopular opinion on this forum, but among the accounting world many people realize that the Sarbanes Oxley was a piece of bad legislation that would cause massive economic trouble.

[Sun Baked]

I agree with the performance issue with one caveat...

Some of the companies that have tied their CEOs performance to pay have really been mismanaged worse than the companies without it.

Don't forget the "managed" targets that were met and it turned out there was a really strong incentive to manipulate the numbers to meet the targets.

Heck even Chainsaw Al got paid for performance and he went in and literally destroyed Scott Paper and Coleman -- plus he manipulated the hell out of Coleman before he was caught. But he did meet quite a few the numbers while he was there.

[CalBoy]

I think it was too much government legislation that caused this.

So you'd still like to sound the trumpet of deregulation?

How's your peanut butter been lately?

Sarbanes Oxley may have increased the cost of compliance for companies, and it may not be the best way to achieve the end result of more transparent corporate accounting, but it can't be blamed for our current problems. Our current economic mess traces itself squarely to unqualified people seeking home loans and banks granting said loans.

If anything, reduced government standards in the areas of credit caused our current problems. Of course the same was true in 1929, except that the issue wasn't homes, it was stocks.

[Dont Hurt Me]

Most of these CEO's are bean counters, with a lot of them that couldnt even do that but still got wheelbarrows full of beans while taking beans away from the workers, the people that make it happen. The CEO's are overpaid and have been for years.
If we the tax payer have to take over your companys burden because of lack of performance and greed then you should be limited in your compensations because its clear you are way overpaid.

Obama needs to make this one an executive order.

[chilipie]

I thought this thread was going to be about an idiot cap - only x idiots per company or something.



Come to think of it, I quite like that idea.

[Sedulous]

I know it is a bit off topic, but it is related to the outrage of executive pay for companies being baled out by public tax revenues. One has to wonder what would happen if instead of paying tax into a big pool that can be used at the government's whim, people could dictate what categories their taxes could be used towards. For example, I would not want a cent going towards "fat cat bail out" but would be actually happy to have my taxes go towards education and research.

[techfreak85]

howz about they get their salary cut to $25 a year, and a lunch at Taco Bell, and the rest is all stock. that gives them motivation to do good.


but how do u get them to stay at the company?

[mactastic]

This is awful. The reason these companies fell isn't because some executives made a million a year instead of four hundred thousand.
No, it's because some executives made some spectacularly poor decisions, and then decided that those decisions justified a "performance based" bonus of outrageous proportion to their actual performance; all while causing layoffs down the line.

Sure, it's not gonna blow the budget if we let convicted felons have filet mignon every night, but we just don't DO that because of how bad it looks, and how completely unjustifiable it is. If a warden somewhere decided that they *deserved* good steak, are you going to say "well, hey... that's ok, he *said* they deserve it, so they truly must"?

You must not live in California. And you shouldn't decide what is enough. These executives oftentimes got there for good reason: they worked 16 hour days for 20 years and showed exceptional intelligence and all that good stuff.
What good is intelligence, if it isn't coupled with good sense? These companies didn't fail because a bunch of dummies took over; no one is claiming these guys aren't among the brightest. But there is no denying that they made poor decisions. Yeah, a lot of people who took out mortgages they couldn't afford made poor decisions too; but these guys, as you point out, are the smart ones. They looked the other way while it happened.

And now that I'm a part-owner in these firms, I damn well oughta have a say in deciding what's enough.

Just because some people think $5 million per year is excessive doesn't mean that a) it is or that b) it's any of your business. In the case of the bailout, you can make a case for the second one considering that the businesses will get tax money, but I feel a lot of people just say "damn all executives" and don't actually realize that they deserve more than a WalMart employee makes.
No one is saying that they don't deserve to be paid more than a WalMart employee makes. But they don't necessarily deserve 400 times that either, particularly when they are making poor business decisions.

A lot of people don't realize that what companies classify as executives often don't make strategic decisions for the course of the company. They're not all to blame.
Of course not all executives are to blame for this, and no one has ever made that claim. Again with the red herrings. "Oh liberals hate all executives". Spare us. :rolleyes:

As other people have said, bonuses are a way to retain top level employees. In many cases, incoming analysts make 60,000 per year starting salary and then another 50-60 thousand in end of the year bonus. You take that away you're basically stripping these companies of their talent and making them even more worthless.
This is the talent? The guys who said "hey, we don't need to actually *verify* that these people can afford a $750,000 mortgage"? The ones who said "it's perfectly safe to create and invest in securities backed by mortgages whose worth and chance of being fully repaid we can only roughly guess at"; and "if that shadow market happens to be worth multiples of GDP even though it's based on rankings by the bright guys at the bond rating agencies as A or higher, that's all ok -- just as long as I continue to get my bonuses"?

Let them go. If other companies want to pay these people, let them. Surely there are talented up-and-comers who could do no worse. And maybe then they'd learn some lessons.

Also, I fundamentally disagree with the idea of depending on a bonus. That's just stupid, and should not be accepted as an excuse. If your company tells you that your salary is $60,000/year, with the potential to make another $60,000/year in bonuses, and you plan your finances around an income of $120,000/year, you're an idiot. You obviously make poor financial decisions.

A big cause of this whole meltdown was Sarbanes Oxley which declared that derivatives be valued at market value. The only problem was that they had to declare the value of them at ZERO which, while technically impossible (because they did have some value), forced companies to write down these as huge losses and they ran into cash flow problems. They couldn't operate with no cash and had to declare bankruptcy. Over-regulation at its finest.
No, the problem is that the derivatives were there and given good ratings despite their value being essentially unknown.

You can't blame one of the rules of the game for your failure. Everyone know what they would have to declare under Sarbanes-Oxley, should these derivatives happen to turn out to be worth far less than the value they were *claiming* they had -- so that they could keep their bonuses coming.

Also not helping the case were federal laws that *encouraged* banks to lend to people with little hope of repaying. Let's also not forget the people who actually agreed to these mortgages. No matter what the mortgage houses said, these people had to know that the sums of money they were borrowing, on adjustable APR no less, could not be supported forever. Hell, as a college student, even *I* knew that. It just didn't make sense. A family making $50,000 per year shouldn't be buying an expensive house on an adjustable rate mortgage. When the rates went up, people defaulted on their mortgages which triggered the whole Sarbanes Oxley fiasco with the write downs.
Federal law permits credit card companies to *encourage* college students to take out cards that they know the kids often abuse; so should we forgive the people who get a credit card and use it to live beyond their means?

Encouragement means you still have to make the decision yourself, and be responsible for it once made. Even if there is easy money to be made, that doesn't mean you have to do it if you don't think it's right.

I agree with the performance issue with one caveat...

Some of the companies that have tied their CEOs performance to pay have really been mismanaged worse than the companies without it.

Don't forget the "managed" targets that were met and it turned out there was a really strong incentive to manipulate the numbers to meet the targets.

Heck even Chainsaw Al got paid for performance and he went in and literally destroyed Scott Paper and Coleman -- plus he manipulated the hell out of Coleman before he was caught. But he did meet quite a few the numbers while he was there.
I'm always greatly suspicious of people who get more money from bonuses than from salary. They are highly incentivized to do *anything* to get that money.

General rule of thumb I've seen at most companies I've been involved with is that performance bonuses are not more than 20-25% of salary. Good encouragement, without the insane drive to do anything to get it.

Sarbanes Oxley may have increased the cost of compliance for companies, and it may not be the best way to achieve the end result of more transparent corporate accounting, but it can't be blamed for our current problems. Our current economic mess traces itself squarely to unqualified people seeking home loans and banks granting said loans.
Again, the problems associated with the costs of underperforming mortgages is tiny compared to the real size of this thing. Bad loans were the trigger, and they get a lot of the focus, but the real underlying problem was the way these loans were allowed to be packaged, resold, and used to inflate the value of investment vehicles to ridiculous proportions. Again, we're talking a market who's value totaled several times our GDP. Do you honestly think there are enough defaulted mortgages out there to be worth even equal to our GDP, let alone multiples of it?

[Badandy]

So you'd still like to sound the trumpet of deregulation?

Yes, and I explained why.


Sarbanes Oxley may have increased the cost of compliance for companies, and it may not be the best way to achieve the end result of more transparent corporate accounting, but it can't be blamed for our current problems.

Increased the cost of compliance?! It made financial institutions write down billions of dollars because of some BS technicality that derivatives on mortgages should go to 0 if the house is foreclosed upon. Foreclosure or not, houses STILL HAVE EQUITY. They had to write them down as having 0 value.

Our current economic mess traces itself squarely to unqualified people seeking home loans and banks granting said loans.

I agree.


Most of these CEO's are bean counters, with a lot of them that couldnt even do that but still got wheelbarrows full of beans while taking beans away from the workers, the people that make it happen.

Spare me.


No, it's because some executives made some spectacularly poor decisions, and then decided that those decisions justified a "performance based" bonus of outrageous proportion to their actual performance; all while causing layoffs down the line.

Agreed

What good is intelligence, if it isn't coupled with good sense? These companies didn't fail because a bunch of dummies took over; no one is claiming these guys aren't among the brightest.

Look above you (in the thread).

And now that I'm a part-owner in these firms, I damn well oughta have a say in deciding what's enough.

It looks like we agree on a lot of things on this issue; If companies choose to accept bailout money, we should have that percentage of a say in some of their decisions.

Of course not all executives are to blame for this, and no one has ever made that claim. Again with the red herrings. "Oh liberals hate all executives".:rolleyes:

No red herrings here, claims of "Wall Street Executives are greedy" abound, even in this thread. It's not so cut and dry, like you recognize.



You can't blame one of the rules of the game for your failure. Everyone know what they would have to declare under Sarbanes-Oxley, should these derivatives happen to turn out to be worth far less than the value they were *claiming* they had -- so that they could keep their bonuses coming.

SA was passed after derivatives were created and traded.

[MacNut]

People should be paid based on the job they do. If you do a good job you get paid more. Bankrupt the company and you get less. CEO's should not be allowed to tank a company and walk away with millions.

[mactastic]

SA was passed after derivatives were created and traded.
Yes but the rules change all the time in the business world. SA passed in 2002. Don't tell me these smart guys didn't know the risks they were taking.

They knew they would be writing these values down to zero if the house was foreclosed on, but the still allowed "no doc" loans to proliferate -- accelerating in use actually -- long after this law was passed.

These guys are all smart. They knew this was coming, but with so much money tied up in the bonus pool, they turned a blind eye to it.

[Sun Baked]

Nice to know the lawyers are helping the CEOs maintain their position...

Executive Compensation Bar Reaps the Meltdown (http://www.law.com/jsp/ihc/PubArticleIHC.jsp?id=1202427899267)

Executives forced to do with less in the short term can console themselves with the massive grants of stock and options they'll likely get this year -- grants that will be more valuable than any bonus if the market truly rebounds. Despite the market collapse, the bailout, and new rules on compensation, the executives are going to get paid. Their lawyers will make sure of that.

[Peace]

So...

The senate is only going to allow 500 idiots on wall street instead of 10,000 ?

[Sun Baked]

So...

The senate is only going to allow 500 idiots on wall street instead of 10,000 ?

That would be proof you cannot legislate idiocy, unless you make them all politicians.

[Dont Hurt Me]

The U.S. Tax Payer gets screwed once again by our bought off politicians.:mad: Taxation with no representation. Might as well have stayed with the King of England.

[Peace]

Your Senators at work.

http://i2.cdn.turner.com/cnn/2009/POLITICS/02/01/stimulus.next/t1home.stim.unity.gi.jpg

Don't they just look so honost ?
:rolleyes:

[Sun Baked]

Your Senators at work.

Don't they just look so honost ?
:rolleyes:

Wait a minute, aren't those a couple of the faces/expressions from the new show "Lie to Me" :confused:

[Thomas Veil]

These executives oftentimes got there for good reason: they worked 16 hour days for 20 years and showed exceptional intelligence and all that good stuff.There are plenty of people who own mom-and-pop stores who put in those kinds of hours over those kinds of years, who don't make nearly what these guys do.

A lot of people don't realize that what companies classify as executives often don't make strategic decisions for the course of the company. In those cases, then what are they earning those exorbitant salaries for??

As other people have said, bonuses are a way to retain top level employees. In many cases, incoming analysts make 60,000 per year starting salary and then another 50-60 thousand in end of the year bonus. You take that away you're basically stripping these companies of their talent and making them even more worthless. In many businesses employees don't get bonuses. They're expected to perform at top levels because...they're expected to perform at top levels.

Anybody ever notice that Japanese and Korean executives are paid much, much less than American ones, yet quite often their companies are able to kick our asses?

[Badandy]

There are plenty of people who own mom-and-pop stores who put in those kinds of hours over those kinds of years, who don't make nearly what these guys do.

The guy who washes my cars puts in long hours, too. Maybe we should all be payed the same!!

In those cases, then what are they earning those exorbitant salaries for??

Because of their technical knowledge and industry experience.

Anybody ever notice that Japanese and Korean executives are paid much, much less than American ones, yet quite often their companies are able to kick our asses?

First off, please cite. Secondly, in some cases they kick our asses. In most cases they don't. We don't have the world's largest economy for no reason...

[Iscariot]

The guy who washes my cars puts in long hours, too. Maybe we should all be payed the same!!

Does that mean you're giving me a raise?!

[Badandy]

Does that mean you're giving me a raise?!

It was purely hypothetical. You missed a spot on my back left wheel.


Back to seriousness, it's all pretty logical. If more people had the knowledge and qualifications of these Wall Street executives, their pay would be far lower. Do you think Lebron would be making $40 million per year if there were a million other people in the country who could play basketball as well as he could? You think the top people at these Wall St. firms want to pay 1st year employees over $100,000? Of course not.

[iAthena]

I thought this thread was going to be about an idiot cap - only x idiots per company or something.



Come to think of it, I quite like that idea.

There is no limit of idiots allocated to any given company or organization.

[mactastic]

The guy who washes my cars puts in long hours, too. Maybe we should all be payed the same!!
There you go again! No one is saying everyone should all be payed the same. We're saying that being smart and putting in long hours at work are not, in and of themselves, something that means you *deserve* more pay than anyone else.

[Thomas Veil]

Because of their technical knowledge and industry experience.Which knowledge and experience, if other people are the ones making the strategic decisions, is needed...why?

First off, please cite. Secondly, in some cases they kick our asses. In most cases they don't. We don't have the world's largest economy for no reason...I'd say they kick ass in the important ones, like autos and electronics.

The wild difference between US/Asian comp rates is so well known I wouldn't think it'd need citation, but:

"There is a huge difference between Asia and here when it comes to the top executive compensation," says Han Kim, a professor of business administration at the University of Michigan. "Rarely in Asia, especially Japan and Korea, do the CEOs get paid more than a million dollars."

Japanese companies are not required to break out salaries and bonuses for top executives. Instead, they lump them together. Last year, Toyota's top 37 executives earned a combined $21.6 million in salary and bonuses, according to filings with the Securities and Exchange Commission. U.K. firm Manifest Information Services, which analyzes proxy information, estimates Toyota's top executive, Hiroshi Okuda, earned $903,000 in 2006.

At Honda, the top 21 earned $11.1 million, combined, in salary and bonuses, SEC filings show.USA Today (http://www.usatoday.com/money/autos/2007-10-09-auto-exec-pay_N.htm)The U.S. stood first in the world in 2005 with a ratio of 39:1 CEO's compensation to pay of manufacturing production workers. Britain second with 31.8:1; Italy third with 25.9:1, New Zealand fourth with 24.9:1.[12]Wiki (http://en.wikipedia.org/wiki/Executive_compensation)Turns out that American executive compensation rates are quite different from those of the rest of the developed world. In Japan a typical executive makes eleven times what a typical worker brings home; in Britain, 22 times. In America...Yeah, we know, 39 times. PBS (http://www.pbs.org/now/politics/executivepay06.html)

[freeny]

http://www.cnn.com/2009/POLITICS/02/04/obama.executive.pay/index.html

$500,000 for executives of companies who accept bailout $$$

How on earth will they survive?
May god have mercy on their souls.

[mactastic]

How on earth will they survive?
The money quote (http://www.nytimes.com/2009/02/05/us/politics/05pay.html?hp) of the day:
“That is pretty draconian — $500,000 is not a lot of money, particularly if there is no bonus,” said James F. Reda, founder and managing director of James F. Reda & Associates, a compensation consulting firm.
Yeah, it's tough to survive on $500,000 a year. Talk about tone-deaf. :rolleyes:

And it's quite funny to hear these folks gripe about caps on executive compensation being "socialism" whilst they hold their hands out begging for government tax dollars to prop up their companies -- to prevent capitalism from taking them down.

[Macaddicttt]

The U.S. Tax Payer gets screwed once again by our bought off politicians.:mad: Taxation with no representation. Might as well have stayed with the King of England.

You're kidding, right? No representation? We voted them in.

[mactastic]

You're kidding, right? No representation? We voted them in.
Unless you happen to be a resident of DC...

[Macaddicttt]

Unless you happen to be a resident of DC...

True...true...

[Juventuz]

One thing is for certain, NYC is going to be feeling quite the pinch come tax time. They receive a lot of money from the executives and their bonuses.

[freeny]

One thing is for certain, NYC is going to be feeling quite the pinch come tax time. They receive a lot of money from the executives and their bonuses.

How so?

[leekohler]

I was just reading some of the comments on the Chicago Tribune website about this. OMG are they funny. The right wingers are saying it's the "end of market-driven pay! :D Obama is taking all the incentive for hard work out of America!" It's hilarious. WTF? Do they not read? Do they not know that when you take federal cash to save your crappy business that there should and will be guidelines and limitations? These people really believe they should just be able to TAKE our money. Unbelievable.

[rdowns]

How so?

Both NYC and state receive huge tax revenue from Wall Street. Their receipts will plunge based on the poor shape of WS companies and the loss of tax revenue from bonuses. Take a look at the proposed state and city budgets - very painful.

[Thomas Veil]

I was just reading some of the comments on the Chicago Tribune website about this. OMG are they funny. The right wingers are saying it's the "end of market-driven pay! :D Obama is taking all the incentive for hard work out of America!" It's hilarious. WTF? Do they not read? Do they not know that when you take federal cash to save your crappy business that there should and will be guidelines and limitations? These people really believe they should just be able to TAKE our money. Unbelievable.The other day I heard Rush say something like, "They're talking about demanding to know how banks spent the bailout money. What business is it of the government's, where the money went? These are private corporations. The government can't just come in there and dictate or demand to know how they used the money. The government gave it to them, and it's theirs to do with as they wish!"

It was a truly surreal, Rod Serling-esque moment. I'm listening to this crap and wondering, "What the hell planet is this guy on??"

[leekohler]

The other day I heard Rush say something like, "They're talking about demanding to know how banks spent the bailout money. What business is it of the government's, where the money went? These are private corporations. The government can't just come in there and dictate or demand to know how they used the money. The government gave it to them, and it's theirs to do with as they wish!"

It was a truly surreal, Rod Serling-esque moment. I'm listening to this crap and wondering, "What the hell planet is this guy on??"

Are you SERIOUS???!!! WTF man? Wow- he really has lost it. Just proves my point- these people think they can just walk in and take our money.

[Abstract]

People should be paid based on the job they do. If you do a good job you get paid more. Bankrupt the company and you get less. CEO's should not be allowed to tank a company and walk away with millions.
That's how I see it.

I don't like the business of, 'Do poorly, and we give you a large bonus; do really well, and we'll give you a massive bonus.' Only in the distorted reality of the mega-rich is this how things work.

I really don't mind if these CEOs and other top executives earn a bonus for their work. At the same time, the company does poorly, then I really expect these people who benefit from doing well to be the first to suffer the consequences when the company does poorly. In fact, when it's time for layoffs, I expect the people at the top --- the people who make the decisions and benefit from good decisions --- to pay for their poor decisions.

I don't like how companies turn towards layoffs first.

[MacNut]

In fact, when it's time for layoffs, I expect the people at the top --- the people who make the decisions and benefit from good decisions --- to pay for their poor decisions.

I don't like how companies turn towards layoffs first.When I worked retail I saw so many horrible policies that were implemented from the top that everyone on the bottom had to deal with. As the company falls apart it is the little people that get the boot.

[MacNut]

Do you think Lebron would be making $40 million per year if there were a million other people in the country who could play basketball as well as he could?I don't think anyone should make that much. I don't care how talented you are. That money could go to better uses. A pro athlete doesn't have a useful talent that helps anybody. Entertainers should not get paid millions. Teachers and doctors and fireman should get paid more for actually doing something meaningful.

Get paid more for making a difference and helping people. Don't get paid millions for being a side show.
CEO's get paid for making a company money, they don't help the common man.

[Juventuz]

How so?

rdowns hit upon it already, but NYC taxes all who work within her borders. So people pay federal/state/city income taxes. If the executive isn't getting his 2 million bonus that means NYC isn't getting their share.

Wall St. is doled out $18 billion in bonuses, down from $34 billion the year before. Imagine how much NYC lost in tax revenue there. Now imagine that $18 billion disappearing. That's A LOT of money that is gone. Who's going to make up for the millions to billion in shortfall?

[Juventuz]

I don't think anyone should make that much. I don't care how talented you are. That money could go to better uses. A pro athlete doesn't have a useful talent that helps anybody. Entertainers should not get paid millions.

They get paid that much because they bring in the money. If they didn't then they wouldn't get paid. It's simple economics.

Teachers and doctors and fireman should get paid more for actually doing something meaningful.

To an extent I agree, but where will that money come from? It's not like the situation with entertainers or athletes, the money comes from different areas.

[Badandy]

I don't think anyone should make that much.

Congratulations. I'll make sure to bring your point up in the next NBA meeting.

That money could go to better uses.

That doesn't mean that it should. Free-market. Individual liberty. That whole thing.

A pro athlete doesn't have a useful talent that helps anybody. Entertainers should not get paid millions.

Hmm. I wonder how their salary is justified. Oh, I know! Because enough people do find their work valuable enough pay them their money.



CEO's get paid for making a company money, they don't help the common man.

You're joking right? Drug companies, which spend billions of dollars per year on research and development to create cutting edge drugs help the common man. Agricultural businesses in America, who have incredible land yields because of their operational expertise, feed millions because some companies care enough about their profits to acquire good talent. Innovative people spend their lifetime acquiring skills that allow you be typing on such a beautiful machine. Perhaps all the people who are paid a lot of money should have refused all the raises given to them over their years in business? Good talent costs money. Understand supply and demand. It's very simple.

[Peace]

Congratulations. I'll make sure to bring your point up in the next NBA meeting.



That doesn't mean that it should. Free-market. Individual liberty. That whole thing.



Hmm. I wonder how their salary is justified. Oh, I know! Because enough people do find their work valuable enough pay them their money.




You're joking right? Drug companies, which spend billions of dollars per year on research and development to create cutting edge drugs help the common man. Agricultural businesses in America, who have incredible land yields because of their operational expertise, feed millions because some companies care enough about their profits to acquire good talent. Innovative people spend their lifetime acquiring skills that allow you be typing on such a beautiful machine. Perhaps all the people who are paid a lot of money should have refused all the raises given to them over their years in business? Good talent costs money. Understand supply and demand. It's very simple.

PLEASE tell that to wall street.;)

[leekohler]

PLEASE tell that to wall street.;)

Yes, please do.

[Abstract]

Wall St. is doled out $18 billion in bonuses, down from $34 billion the year before. Imagine how much NYC lost in tax revenue there. Now imagine that $18 billion disappearing. That's A LOT of money that is gone. Who's going to make up for the millions to billion in shortfall?

The people who got to keep their jobs because the company didn't have to pay out ridiculous bonuses to people who didn't deserve them. If thousands of employees get to keep their job because the bonuses given out were smaller, then perhaps the shortfall isn't as large as you think. It'll still be there, but what do you expect when the economy is in the crapper?

[MacNut]

Congratulations. I'll make sure to bring your point up in the next NBA meeting.



That doesn't mean that it should. Free-market. Individual liberty. That whole thing.



Hmm. I wonder how their salary is justified. Oh, I know! Because enough people do find their work valuable enough pay them their money.




You're joking right? Drug companies, which spend billions of dollars per year on research and development to create cutting edge drugs help the common man. Agricultural businesses in America, who have incredible land yields because of their operational expertise, feed millions because some companies care enough about their profits to acquire good talent. Innovative people spend their lifetime acquiring skills that allow you be typing on such a beautiful machine. Perhaps all the people who are paid a lot of money should have refused all the raises given to them over their years in business? Good talent costs money. Understand supply and demand. It's very simple.People should be payed based on their worth. If the CEO of a major drug company wanted to help the common man he would make it easier for the poor to get prescription drugs to be able to save their life. If you think a drug company wants to help people you are wrong. They just want to make money.

All these billions that people make go towards buying frivolous things that only benefit them. Does britney Spears really need to live in a 80 million dollar house when people are starving all over the world?

If these companies really wanted to help they would give back the money and put it to good use.

They money shift in this country is staggering. So many people that have made billions that don't deserve it while hard working americans can barely get by.

[Badandy]

People should be payed based on their worth.

And who determines this worth? The Central Committee?

If the CEO of a major drug company wanted to help the common man he would make it easier for the poor to get prescription drugs to be able to save their life. If you think a drug company wants to help people you are wrong. They just want to make money.

Of course, and them making money usually helps people. I'll tell you, without the profit incentive, they wouldn't make nearly the advancements and products they do now.

All these billions that people make go towards buying frivolous things that only benefit them. Does britney Spears really need to live in a 80 million dollar house when people are starving all over the world?

No, but do you really need to tell other people how you think they should live?

If these companies really wanted to help they would give back the money and put it to good use.

Give back? As if they've raped the common man and owe everything to their customers? People give them money. They wouldn't be in business if people didn't buy their products and use their innovations which they might have spent billions of dollars developing. It's capitalism. It's not perfect, but it's the closest we have to true meritocracy and the least limits on human freedom.

[rhsgolfer33]

If we the tax payer have to take over your companys burden because of lack of performance and greed then you should be limited in your compensations because its clear you are way overpaid..

Ha, take over a company? The government has hardly done that. Bought preferred stock that holds no voting rights in a corporation? Thats more like it. The government doesn't control most of these companies and never will. Will they get dividends and regain the initial capital invested? Possibly. But can they control any aspect of the company? We'll see; I'd bet on a lot of legal challenges going down if they try.

All this crap from people about Socialism is so overblown.

$500,000 is certainly a nice base salary for an executive, but bonuses should still be left available depending on performance. $500,000 really isn't that much money, especially for someone running a multinational corporation. I love how everyone is so quick to slam Wall Street and corporate Execs when the majority of people don't have the education, stamina, drive, or experience to even enter the top board room of one. Its a rash generalization to call people on Wall Street or in corps. crooks; most of them are pretty damn normal people: they work hard and they endure a lot of stress in a super high pressure high dollar market, that generally equates to $$$$$$.

[hulugu]

...
$500,000 is certainly a nice base salary for an executive, but bonuses should still be left available depending on performance. $500,000 really isn't that much money, especially for someone running a multinational corporation.

When some people live on $1 dollar, $500,000 is a lot of money. Comparisons to the rarified world of finance obscures this uncomfortable reality.

I love how everyone is so quick to slam Wall Street and corporate Execs when the majority of people don't have the education, stamina, drive, or experience to even enter the top board room of one. Its a rash generalization to call people on Wall Street or in corps. crooks; most of them are pretty damn normal people: they work hard and they endure a lot of stress in a super high pressure high dollar market, that generally equates to $$$$$$.

This is probably true, but somedays—especially these days—it feels like a pretty fiction built up to hide the fact that a certain clan of people make huge amounts of capital in a poker game no one else is invited to. There are certainly people who endure more stress and people who are much smarter who could do the job but have chosen not to. The whole "Masters of the Universe" story from Wall-Street often feels like Don Quixote's myth-making.
Of course, I get to thinking this way after rereading Michael Lewis' Liars Poker.

...It's capitalism. It's not perfect, but it's the closest we have to true meritocracy and the least limits on human freedom.

To abuse Churchill's words, capitalism is the worse form of meritocracy, except for all the others.

[Juventuz]

The people who got to keep their jobs because the company didn't have to pay out ridiculous bonuses to people who didn't deserve them. If thousands of employees get to keep their job because the bonuses given out were smaller, then perhaps the shortfall isn't as large as you think. It'll still be there, but what do you expect when the economy is in the crapper?

NYC will still collect taxes on their salaries, which isn't going away, but in one year bonuses were down $16 billion. That's $16 billion less that NYC was able to tax. That's A LOT of money that won't be able to be made up with the people that are working. Keep in mind that bonuses get taxed at a higher rate normally.

[atszyman]

And it's quite funny to hear these folks gripe about caps on executive compensation being "socialism" whilst they hold their hands out begging for government tax dollars to prop up their companies -- to prevent capitalism from taking them down.

OK so you can't get the "best" CEOs for $500k, however these "best" were working during the clusterf*** that got us here. This could be a great way to find the next generation of great CEOs that might have otherwise never have been tapped. The CEOs of the past might not work for $500k but it's an excellent chance for a motivated management type to make a big name for him/herself.

Company run so far into the ground you needed a bailout? Look at the bright side, your new CEO will only cost you a few months of a $500k salary (max) and won't get millions in bonuses for failure or quitting.

Any CEO that manages to pull a company out of the dregs and meet the terms of the government loan/bailout to free themselves from the $500k restriction has found a great management team worth the bonuses bestowed once their obligation to the government is met. They've also now found a crop of executives who, based on their performance, should be able to get the big pay day at any other company that didn't get a bailout.