Corporate Greed Undermines System

Discussion in 'Politics' started by AAAintheBeltway, Dec 8, 2006.

  1. From the Maoxian blog:

    December 8, 2006

    Reforming Corporate Governance is the Ultimate Impossible Dream
    This excerpt from William Thomas’s 2005 Annual Letter makes it clear why you should read all his Letters:

    “… the irresponsible directors of Corporate America’s 500 biggest businesses have continued to facilitate the wholesale transfer of wealth from their companies’ owners to their managers. Something is seriously wrong with a system that prevents companies’ real owners from controlling the compensation of their hired managers. Something is seriously wrong with a system that pays the 50th highest-paid executive 865 times as much as the average worker or the 250th highest-paid executive 171 times as much. This is not capitalism. It is grand larceny, which enables elite capitalist con men to rob the proletariat. It threatens our economic system and paves the road to socialism.”


    I couldn't agree more. We have a large-scale breakdown in corporate governance that has allowed managers to appropriate for themselves obscene amounts of money that rightly belong to shareholders. History teaches us that these ever-growing imbalances cannot persist forever. In the past they have lead to revolution. Our leaders' response is not to address the problem, but rather to allow a vast influx of illegal immigrants from countries where such imbalances and unfairness are the norm.

    Please spare me the responses accusing me of being a socialist who doesn't understand the capitalist system. I am as conservative as anyone here, and I am more skeptical of government interference than most. I can recognize a problem when I see it however.
  2. Are you a closet Marxist?:D Only kidding! I agree with you 100%.
  3. neophyte321

    neophyte321 Guest

    You're unlikely to find an argument here. Just a collection of traders, wanna-bes, trolls, and an assortment of crackpots who are all adversely affected by glottonous CEO's.

    Everyone's scratching everyone elses back in the world of corporate boards. The only solution is to tax the hell out of CEO compensation when it reaches ridiculous levels. Say, after it reaches 500x the average salaray, tax it at 90%.

    There isn't about political parties. Some of the highest compensated executives are Democrats. The former CEO of Goldman and current governor of New Jersey for instance.
  4. from article: "Something is seriously wrong with a system that prevents companies’ real owners from controlling the compensation of their hired managers."

    If they are prevented, I would like to know how. If it is shown they are prevented by some means, then a capitalist would like to see those hinderances removed. The fact that large salaries prevail does not prove that shareholders are prevented from anything. It must be shown that shareholders are impeaded, not just taken advantage of by back-scratching board members.

    from article: "Something is seriously wrong with a system that pays the 50th highest-paid executive 865 times as much as the average worker or the 250th highest-paid executive 171 times as much."

    This part is, indeed, marxist blather.
  5. neophyte321

    neophyte321 Guest

    the ceo is often the chairman, the board is typically a group of other ceo's directly or indireclty appointed by the ceo himself, the compensation committee can often time be tied directly back to the ceo.

    They pay themselves what ever the hell they want to pay themselves.

    CEO's are the only ones that should be rewarded for increased corporate profits? Look at the chart. Regardless of increased profitablity only the CEO's were rewarded proportionately.

    These guys are greedy to their core, I know my brother is a C-Level exec at a Fortune 500. You'd never meet a more greedy bastard in your life.
  6. I agree that they are greedy. I don't like it either. Calling it theft, however, is another story. The major problem that I have is that shareholders are not "prevented" from putting a stop to it themselves. Nothing that I know of stops them from voting them out. They simply ...don't do it! And for others to step in and try to change something that the shareholders could do themselves, but don't, is not what I want my elected rep to do.
  7. Geez, are you a "tax-and-spending" friggin' librul? Do you have any idea the burden that is on the shoulders of a CEO? They not only have to try to make a profit in an increasingly competitive world, they also risk jail time thanks to the Sarbane-Oxley law. What gives the government the right to selectively tax some people but not others? What if they don't call themselves CEO's any more? Do you also tax "small business managers?"
  8. neophyte321

    neophyte321 Guest

    I know you're being facetious, but you got me never-the-less. A moment of weakness. I question the value of the very existence of a minimum wage, so it's inconsistent for me to advocate a maximum wage.

    A CEO's job is not all golf-outings and cocktail parties. It is a serious burden in today's hyper-active economy, they deserve to be highly compensated, just not to obscene degrees. IMHO.

    palmbeachdude - I edited out the "thieves" comment before your post. I agree with everything you said though.
  9. CEO pay: Sky high gets even higher
    A new report shows top-dog pay bites shareholders, and alleges war profiteering among some CEOs.
    August 30, 2005: 12:24 PM EDT
    By Jeanne Sahadi, CNN/Money senior writer

    NEW YORK (CNN/Money) – If sky-high executive pay at publicly traded companies gives you vertigo, you might want to read this sitting down.

    In 2004, the ratio of average CEO pay to the average pay of a production (i.e., non-management) worker was 431-to-1, up from 301-to-1 in 2003, according to "Executive Excess," an annual report released Tuesday by the liberal research groups United for a Fair Economy and the Institute for Policy Studies.

    That's not the highest ever. In 2001, the ratio of CEO-to-worker pay hit a peak of 525-to-1.

    Still, it's quite a leap year over year, and it ranks on the high end historically. In 1990, for instance, CEOs made about 107 times more than the average worker, while in 1982, the average CEO made only 42 times more.

    The cumulative pay of the top 10 highest paid CEOs in the past 15 years totaled $11.7 billion.

    And though the specific individuals in each of those annual top 10 lists changed year to year, many bosses did pretty well throughout the entire period. Citigroup's Sandy Weill, for example, has made $1.1 billion since 1990.

    "Pay" in this instance refers to total compensation – including salary, bonuses, restricted stock awards, payouts on long-term incentives and the value of options exercised during the year.

    The report also compares the growth in average CEO pay – which was $11.8 million in 2004 – to the growth in the minimum wage. Had the minimum wage risen as fast as CEO compensation since 1990, the researchers calculated, it would now be $23.03 an hour instead of just $5.15. And the average production worker would be making $110,126 a year instead of $27,460.

    Captain here....Now should the minimum wage be 23 bucks an hour? Absolutely not! Should the average guy working in a factory be making 110K annually? Hell no! Can the exec's justify their salary? Not a chance in hell.
  10. I don't like Oprah making a hundred million a year or you name the hollywood star making fifteen million a picture either. Why isn't anybody protesting them?
    #10     Dec 8, 2006