Controlling CEO's pay!

[Boomyal]

The Dems have long wanted to be able to control how much CEO's are paid. While I agree that many seem to be paid extravagant amounts, especially in ailing companies, to allow any laws to control compensation would be a very sticky situation. I would not be in favor of it.

The Dems now have a new idea. They want to give shareholders, of public companies, a direct hand in determining CEO compensation. At least, on the very surface, there seems to be [colour=red]some[/colour] logic in this idea.

What say ya'll?

 

[WillyBWright]

Re: Controlling CEO's pay!

The only way to get the CEO you want is to pay him/her what he/she wants. Otherwise they stay where they're at or look elsewhere. This is a place where govenrment should not go. The market will decide in the long run. There are always ways around it anyhow with stock options and performance bonuses.

 

[Boomyal]

Re: Controlling CEO's pay!

The only way to get the CEO you want is to pay him/her what he/she wants. Otherwise they stay where they're at or look elsewhere. This is a place where govenrment should not go. The market will decide in the long run. There are always ways around it anyhow with stock options and performance bonuses.

A surprising answer from you WBW. There is definite merit in your wisdom of letting the market continue to rule.

However, I'll be interested to see other comments. This is not a troll or a trap. I very seldom have mixed feelings on issues but this is one of them.

 

[tommays]

Re: Controlling CEO's pay!

I say we are all getting a screwing with the way companies books are currently manipulated to build up stock value in a false and dishonest manner

Which seems to have happened as a result of the last round of laws trying to restrict their pay and the result is the current pay buy stock value disaster

I really have little or no faith in any public company right now

Tommays

 

[18rabbit]

Re: Controlling CEO's pay!

Obviously, the CEOs are messin' up America, too! Shoot the sons of b!tches!

(Updated my sig to reflect the need. 8) )

 

[Boomyal]

Re: Controlling CEO's pay!

Which seems to have happened as a result of the last round of laws trying to restrict their pay ....Tommays

I am not aware of any such attemp. Can you elaborate tommays?

 

[RubberFrog]

Re: Controlling CEO's pay!

Despite my dislike of over-payed CEOs, this sounds pretty communist to me.

 

[tommays]

Re: Controlling CEO's pay!

I cant say exactly what happened BUT the Enron style of book keeping started as a way around some law or a nother


Tommays

 

[jtexas]

Re: Controlling CEO's pay!

Shareholders already have enough of a say in CEO compensation. Shareholders elect directors, directors appoint a "compensation committee", committee negotiates compensation package with CEO.

Here's an idea...how about giving voters direct control over the compensation of members of congress?

 

[Boomyal]

Re: Controlling CEO's pay!

Here's an idea...how about giving voters direct control over the compensation of members of congress?

Maybe you're onto to something here jtex. Without a doubt, what's fair is fair. If there is a move to allow direct shareholder control of CEO salaries then we should demand that voter's be given a direct hand in Congressional pay AND PERKS.

 

[tommays]

Re: Controlling CEO's pay!

C&P
Not surprisingly, the debate over a proposal by Democratic Rep. Barney Frank that executive compensation plans be approved by shareholders is shaping up along party lines. Business leaders and several Republicans say bad apples like Ken Lay should not incite Congress to put vital business decisions in the hands of "activist" shareholder groups. Democrats, as you might expect, are more open to the idea of regulation. The SEC's push for greater visibility into executive pay is being met with some resistance; Frank's plan is considered far more dramatic.


C&P
or these restrictions came not from a desire to improve pay arrangements. but rather from the adoption of tough insider trading laws in the 1980s that


I see now there scared to allow the owners(stock holders) to say anything about there pay

Tommays

 

[QC]

Re: Controlling CEO's pay!

The little teenee weenee company I work for went public last March. That was in the UK, but many of the latest safeguards now in place there are a result of the Enron stuff. I can tell you since then (Enron) I have worked for three different CEO's and during that same time four different CFOs. Not one of them CFO or CEO is willing to make any misleading statements or play with any accounting stuff. Each one of them has persoanlly mentioned jail to me in the context of reporting discussions (not for me for them). So this stuff does cycle through and the world starts to right itself.

With that understood the idea of any Gov't imposed salary caps for anybody other than Gov't employees is horrible :%

Edit: Ooops, I just reread all of Boomer's comments.

There may be some merit in allowing shareholders a voice, but isn't that what a Board of Directors is? A voice of the shareholders? Also, when a company is going down the tubes, how do you attract a new guy to turn it around?

 

[18rabbit]

Re: Controlling CEO's pay!

Here's an idea...how about giving voters direct control over the compensation of members of congress?

Maybe you're onto to something here jtex. Without a doubt, what's fair is fair. If there is a move to allow direct shareholder control of CEO salaries then we should demand that voter's be given a direct hand in Congressional pay AND PERKS.

Well, since the United States of America, Inc is technically a corporation, I guess citizens could be seen as shareholders. Shouldn’t we, as shareholders in this corporation be able to vote for whom we want as Speaker of The House?!?

 

[Haut Medoc]

Re: Controlling CEO's pay!

You all ready did.....

 

[Parrott_head]

Re: Controlling CEO's pay!

I've read where someone maybe a CEO of one company and sit on the board of another. On his board is a board member who is the CEO of the company he sits on the board of. As a boar member CEO "A" votes for a generous package for CEO "B" with the understanding that CEO "B" will then support a similar package for CEO "A" since B sits on A's board of directors.

Any truth to this?

 

[jtexas]

Re: Controlling CEO's pay!

Yes, interlocking directorates are quite common, it's like a little club.

QC the regs that resulted from the Enron scandal (Sorbanes-Oxley Act, or SOX) are a serious compliance burden - company where I work expended neighborhood of 25,000 man-hours and over $600 thousand in accounting/legal fees to implement - and yeah, the executives are paying close attention.

But Enron wasn't about excessive compensation - it was about mispresenting the company's financial position and its financial results. If the stock price increases that made millionaires out of Skilling and Lay, et. al., had been legitimate, there wouldn't have been any scandal revolving around their pay.

LOL @ 18rabbit "United States of America, Inc."...

 

[QC]

Re: Controlling CEO's pay!

QC the regs that resulted from the Enron scandal (Sorbanes-Oxley Act, or SOX) are a serious compliance burden - company where I work expended neighborhood of 25,000 man-hours and over $600 thousand in accounting/legal fees to implement - and yeah, the executives are paying close attention.

Yeah, I know SOX. I just thought the Enron thing was easier for more to recognise as a catalyst. I also know about the costs associated, I was deeply involved withthe final processes for going public, and on messed up teleconfernces for hours with mega buck lawyers etc. My point was these guys (CEOs and CFOs) are not interested in jail and they all seemed to have got the message . . .

But Enron wasn't about excessive compensation - it was about mispresenting the company's financial position and its financial results. If the stock price increases that made millionaires out of Skilling and Lay, et. al., had been legitimate, there wouldn't have been any scandal revolving around their pay.

I am not sure I agree with that logic. Isn't it a commonly held belief that pursuit of jacked up option prices, ulitmately counted as compensation when sold, is what drives the book cooking? Isn't the shareholders concern that it is a house of cards and that CEOs are driven by greed to build it?

Also, you still got to attract the really good candidates, especially turn-around guys. I honestly don't understand the uproar about CEO's or Athletes for that matter. There are no guns to these peoples heads, and these Packages require Board approval and the board always has a piece of the action, so in turn they are driven to pay guys for positive results for all shareholders.

 

[kenimpzoom]

Re: Controlling CEO's pay!

I have a big problem with the CEO, Chairman of the board of directors, and majority stockholder all being one person.

Fox watching the hen house.

The big problem is that stockholders have become complacent to these types of activities.

As long at stocks and profits are up, no one cares.

Ken

 

[Haut Medoc]

Re: Controlling CEO's pay!

I think they should make whatever the market will bear...
However, I think there should be a special income tax just for CEO's 8)

 

[jtexas]

Re: Controlling CEO's pay!

I was deeply involved withthe final processes for going public, and on messed up teleconfernces for hours with mega buck lawyers etc.

Amazing the dollars that flow in a transaction like that eh? yup I pretty agree with everthing you said there. The only valid objective of any business manager is to increase the value of the company to its owners.

KIZ, in a situation you described, the minority stockholders are pretty much at the mercy of the Head Honcho...and his legal obligation to protect their interests might not be enough if he's not a stand-up kinda guy. And it's not just the investors who have a stake in it...employees and suppliers can get burned too. Imagine if you were a supplier of some service or other and Enron had been 80% of your business.