Then fire the guy. And fire the board, too. That doesn't change the fact that there is only one thing a CEO can do that matters: increase the the value of the company. If he/she doesn't do that they should be fired. If you only invest in companies where the CEO compensation matches the performance of the company it won't be an issue for you. That's one of my criteria in my long-term portfolio. If the CEO is overpaid relative to performance I take my investment dollars elsewhere.
Jesus, with logic like that you'll be "failed_xxxx" for the rest of your life, regardless of profession. LOL
Exactly. I don't understand why Buffett doesn't walk the walk. No one is stopping him from transferring most of his assets to the government or setting up charitable foundations that transfer wealth.
In a half way functional corporate world that is what should happen but it doesn't happen and won't happen.
If people stop investing in companies with overpaid CEOs things will change. Until then, it creates investment opportunities for those who are smart enough to invest in companies with CEOs whose compensation matches their performance (value). The information is publicly available. It's easy to do.
I don't see how the new tax proposal, which is short on the details and long on the sensationalism, will affect Buffet. He still has no tax, because he does not sell the shares in his company. He gifts them to his trusts and charities. Why are we dividing the country when we should be united? If you want the rich to pay more, just limit deductions period. Why complicate the tax code anymore? How many man hours do we waste on doing our taxes?
They get paid to ship jobs overseas too. Because if they don't do it, someone else will. That was his reasoning and he was right. It all stems from the shareholders. Works up to the BOD and then the CEO. The whole process is unsustainable IMO. Especially when you have a 20% unemployment rate. The playing field would have been much more even had we not been focused on profits ahead of jobs. Now we suffer the consequences. For some reason people find it hard to blame themselves for their problems. Could be the reason why so many fail at trading as well.
Who would invest in a company that focuses on jobs ahead of profits? Value is created by the expection (and realization) of higher future earnings (cash flows) that can either be passed on to investors as dividends or re-invested to create growth in future earnings. (Read Warren Buffet's letters to his shareholders. This is exactly what he says year-in and year-out --it's all about future earnings growth.) Imagine a press conference -- The CEO of a Fortune 500 company announces that his company is going to put job creation ahead of profits. What do you think will happen?.... Every mutual fund and investor with an IQ above sea level will dump the stock. Why? Because the CEO has just announced to the world that his future earnings (cash flows, dividends and growth investment) are going to be lower than if he didn't put job creation first. If CEOs thought they could make the share price (value) of their companies go up by putting jobs creation ahead of profits, they'd all be doing it. Warren Buffet would be at the head of the line. Instead, Buffet's companies laid people off in 2008-2009 just like all the other Fortune 500 companies.