Trump this argument, we need practice.

Michael Jordan received tens of millions to indorse Nike. His endorsement will return his pay with a great deal of interest through the development and establishment of a long-lived brand. This is something that you or I could not do. (slave labor, we have learned, will only take you so far) It is the same with CEOs.

When CEO’s turn around or improve a multibillion dollar company like GE the net result of those 5%, 20% or 30% increase in revenues is hundreds of millions annually - plus those revenues over the years after that CEO leaves. These Co’s are generally recruiting from the same pools as every other company – and hence – the larger the company, the more they can and will offer. This is where are small percentage of positive change equals large sums of cash. This job is also something that the average person cannot do. (Plan/budget/timeline enterprises, interpret/gauge markets, finance details etc)

To bring it close to home imagine this: You want to sell your house or apartment and need to hire one person to do it. The more you pay this person, the higher price you may get for your house – why I have no idea – though the person the actually built the house remodeled your kitchen or painted the garage for you will not receive a higher pay day. By the way, as it is with humans… you may just get screwed six-ways-to-Sunday.

Anyway, the point to all this is that if you want to change what CEOs earn, debate the reality of the situation so as to develop a coherent and persuasive argument that we can all use.

Don’t mix in the min/max pay system if you can help it, that’s another debate.

Personally, I would like to see individuals patronize companies that pay their CEOs as a percentage of the wages that the hourly and salary people earn. There are always more hourly people that salary. This would encourage CEOs to develop business plans that enrich the workers as they enrich the company as they prioritize their pay. It will also always leave the political and exploitable question of: If your company and you (CEO) are doing so well, why are your workers paid X, or lower than average or whatever.

BTW, if anyone here as ever heard or seen a convenience store called QuickTrip, this is basically they way they operate, and yes, I drive out of my way to shop there.

Not so with CEOs. Their true performance can be hidden with accounting tricks as in the case with Ken Lay and Anderson. Also, CEOs can create phony short term gains by sacrificing the long term stability of the company they manage.

Also, the current system of electing board members creates what we have now, a pack of less-than-adequate crony businessmen who sit on one another's boards and agree to let each other feed from the trough. Never compare a common CEO to Michael Jordan. CEOs are a dime a dozen in terms of talent. Jordan is one of a kind.

People can screw other people like those you mentioned... were talking about CEO pay structure not how some people are evil.

And yes, I will compare MJ with CEOs with respect to payment motivations.

Anyway..lets try this again. What would be a good structure to pay CEO w/ an argument attached.

MJ is not comparable to CEOs in any way. To imply otherwise is fairly simplistic, IMO. As I noted, MJ's performance is very easy to measure, so his pay structure is very easy to justify.

With CEOs, you have to be able to depend on the board to produce a pay structure that will benefit the company. The way these members are elected currently makes it difficult to put together responsible teams. You get people like George W. Bush sitting on the auditing committee at Harken because (as Soros has said) Bush had a name but little business talent. Real boards, elected in the sunlight instead of in smoke-filled rooms would produce a CEO pay structure customized for the true needs of the owners and employees of the company. There is no "one size fits all approach." That is not possible, IMO.

There is an effort I heard about on NPR a couple of months ago. Someone is trying to make it much easier to put together information on the Internet to make proxy voting more open and effective. By providing information to stockholders the initiative would make it more difficult for a CEO to pack the board with rubber stamps or for a CFO to avoid accountability. Get rid of the ability to put stooges (like our alleged president) on boards solely because someone wants to do someone a favor, and you will accomplish much.

My personal belief is that if you eliminate cronyism and nepotism-by-proxy, the market will efficiently produce CEO pay that is commensurate with the value that the CEO brings. I don't think it is possible to value a CEO mathematically any more than it is possible to do that with a stock. But I do think that a clean process will produce a CEO pay structure that is fair and effective, unlike the nearly criminal pig-feeding trough we now have at many companies.

Bringing Michael Jordan into the picture is wrong and confuses the issue. The market is very efficient in paying Jordan because everything he does is out there for all to see. Not so with CEOs.

My impression is that often these rober barons get their mega-salaries whether or not they do a good job. Company goes under, and the CEO walks away with millions of dollars.

The debate is oh nm, im going to lunch.

If the company's profits increase, then the CEO is payed a set percentage of that increase, like a commission on a sale. If the company breaks even, or perhaps loses money, then the CEO gets squat, or perhaps only a base salaray, not to exceed a certain factor of the salary of the lowest paid employee on the books.

Why should a CEO be paid big bucks for a company's non performance, and why shouldn't a CEO get a cut of whatever gains he/she generates?

nt

I'm not sure I understand your follow up question...

market is willing to pay, then there's nothing one can argue against it. If people are willing to sign them up front that way then, hey, how can you complain. What I would object to is CEO's changing the rules so that they can collect more.

One can make the case that yes, if a CEO raises the value of a company by 10 or 20% he/she should be rewarded. If that 10 or 20% means 1 or 2 billion dollars US in market capitalization, then yes, perhaps 1% of that increase (10 - 20 million) might be a proper reward.

But what happens when a CEO does not boost the value of the company? What if the value of the company (God forbid!) actually goes down. Does the CEO get penalized? Rarely. Does he/she get fired? Eventually, but not before the golden parachute kicks in and they collect millions more for failing as they are gently shown the door.

If you or I go to work and fail to do our job for 3 - 6 months, we get fired. If we don't do our job well, we don't get a raise. We are held accountable for our performance on a daily basis.

There are a multitude of structural and informal reasons usedd as excuses for the current disparity in pay between the top and the bottom of the corporate ladder, but to most of us it looks crooked. CEOS reward themselves and their cronies vastly out of proportion to their performance.

And reward without accountability is theft, pure and simple.

That's why they were cooking the books. To show more profit. I suspect that's all a lot of them did. They were good at "showing at profit" and collecting the dough. It had to bust sooner or later.

yep

RE people work on a standard commission in a HIGHLY competitive market which is being undercut by discount commission sellers.

CEOs. Nice argument. Explain how it works to pay $20 million to a CEO who has crashed the stock and had to fire thousands of employees? How many could have been retained if the idiot was paid less?

A celebrity fool once said "You can never be too thin or too rich." Well, famine in Ethiopia shows you can be too thin. AIDS wasting proves you can be too thin. Howard Hughes, who died with uncut fingernails in filth, was an example of being too rich. If his income had been normal, someone who cared would have gotten him help. Dick Cheney and his friends are too rich. They only associate with each other and feed on each other's fantasies of world domination. Nobody contradicts them because they are so rich they can buy anything, even someone to kill you for annoying them. And now look what they've done. Thousands dead, millions to come? To dominate Middle East oil, Cheney and Bushco will have to drench the desert in blood.

They are too rich. What is there left to buy but elections and souls?

The oddest thing is their passion for security. All the money on earth, and yet still not safe? Who will they kill for their guilty safety? Take their wealth. It has only made them cruel and paranoid.

A CEO paid 500 to 3000 times what salaried employees are paid may be pardoned for thinking himself superior, of more value. That is crap.
It doesn't take special skills to falsify a healthy bottom line by eliminating salaries and benefits to thousands. Or to claim profit when the margin is made by polluting water, earth, and air. To pay $20,000,000 to a CEO and still have a profitable organization, something has to go: American employees, environmental safety protections---all savings from the relaxed environmental and work rules have or will end up in CEO pockets.

The argument that executives can go elsewhere and be paid better may be vaguely but not really true in a bubble market, but NOW? An unemployed exec can go where, exactly? There is no current justification for the outrageous salaries except corruption and cronyism. The corruption created and then bankrupted the bubble. if we continue to believe the idiocy of free market philosophy we are doomed. A true free market does correct itself. But only by death. If too many people die, starving or poisoned or maimed, the market will adjust. To Bushco, that is completely acceptable. Survival of the fittest. Law of the jungle. Actually, the jungle doesn't operate that way. Jungle species have many cooperative behaviors to save their weakest members. This is the behavior of insects. Are we really nothing better than cockroaches?

But our CEO/Cheney class believes itself to be a true nobility. Kings in a society too foolish to recognize real royalty. But kings had a concept of responsibility. Kings whose kingdoms were struck with plague were killed to pacify the angry gods. There was no golden parachute. CEOs who are rewarded for trashing a company have no incentive to feel responsibility to anyone but themselves.

But your question was about being awarded for achievement. It is simply brainwashing to believe ONLY THIS CEO could bring this company around. And it is insanity to reward ONLY the CEO. A smart company, and there are a number, rewards all the employees up and down the line. First the employees, then the shareholders, THEN something to the CEO. But not so much he thinks he's worth more than god. Or his arrogance will reach out and destroy all. As corporation after corporation is discovering. Enron, anyone?

1. That somehow paying a C.E.O. a lot of money actually has some relationship to their performance.

Examine that statement in the light of Ken Lay, unengaged political water carrier for the right. Did he stop the felonious frauds at Enron?


2. That somehow paying a CEO a lot of money actually has some relationship to the company's performance.

See Above.

Cap wages at a given percentage above the companies average pay.
Reward extreme performance with public largess, charity, etc, to be decided by the CEO.

Regarding Corporate headhunting -- The most damaging sorts of scalping were the IT Geeks, who no one ever really listened to, but everyone threw money at. After a while, they developed the attitude that if no one was going to respect them, why not just go for the money.

The end result of that is the loss of jobs in IT overseas.
Part of the problem is that no one has the model for how to keep a knowledge worker productive in an environment where the half life of knowledge is 12 months. So the few workers that can maintain productivity and professional skills in that environment are quite rare, and will prove to be expensive, regardless of where they live.

But I have a big hint for the * administration. They will tend to live in places with excellent public education systems, and a social environment of innovation and free discourse.

In my former life, I worked with I.T. and Senior Management from several large corporations. I found them frequently narrow thinking, greedy, poorly-informed, shortsighted, and lemming like to a terrifying degree.

In essence, if the Bush administration looks like America, this is the America it looks like.

If it were not for all the non disclosure agreements, I could write one hell of a book.

But I no longer have any faith in American management style, because in almost *every* entity I worked for, quick kill profits and gaming were replacing sound business strategy.

The more money Michael Jordan gets the more it helps Nike to exploit Asian sweatshop workers, and the more money CEOs get the more money it takes away from the company's exploited workers and/or shareholders.

at all between CEO comp and the bottom line.

The real reason they get those salaries was well captured by one interviewee 'we have to pay them top dollar, otherwise we're admitting that we're willing to take less than the best'. Madness.