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An article published in Rueters by Bill Rigby reported on Reuter's Conference on Corporate Reform. Out of this conference it was reported that U.S. CEOs now get paid more than 500 times what the average worker earns.

Later in the article, Corporate Reformer Ira Millstein remarked that "[He doesn't] know how you set a cap on pay -- you can't legislate this one."

Well, I've got the solution ...

Corporate boards should take a page from corporate america's playbook. They should set a reasonable wage for the executive (say a mere 50 times the lowest wage of the company) and say "that's it; that's what this job pays. We are looking out for our shareholders by passing on the savings. Take it or leave it. If you won't work for these starvation wages, we will recruit off-shore. I'm sure we can find someone, somewhere in the world, equally talented at losing money as you, that would be willing to work at this wage."

Hey, it's good enough for the cashier, the secretary, the mailroom clerk, it'll be as effective for CEOs. Like the "worker" where else are they going to go. CEOs still have to eat.
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This one is hard.

There is a certain obscenity in the amount of money paid some CEO's. But there is more involved than simply "a day's pay for a day's work." Let's not forget the fields of entertainment and sports. But then sports are entertainment, right?

Typically, candidates for CEO are hired on a contractual arrangement. Pay is typically tied to performance.

Consider: If you save the company $100, we will pay you 1/10th of one percent (0.001) of that savings. Well, that turns to be 10 cents for every $100. When you have a company like, say, General Motors with an annual profit of $1,500,000,000.00

If the company's profit was down 25%, or $375,000,000.00, which is not unreasonable to assume, recovery of that amount would yield a reward of $375,000.00.

If the company is willing to "talk" in whole numbers, that immediately becomes ten times that amount, or $3,750,000.00. That's 353.47 times the minimum wage. The more the candidate can negotiate, the better it gets.

For the company, that's chump change.

For the CEO, it's at least a new boat.

It's a matter of marketable skills, and their value to the employer.

It's only money anyway.

PEACE

Jim Chester

You are who you say you are. Your children are who you say you are.

[This message was edited by James Wesley Chester on February 19, 2004 at 05:14 AM.]


[This message was edited by James Wesley Chester on February 19, 2004 at 05:17 AM.]


[This message was edited by James Wesley Chester on February 19, 2004 at 05:18 AM.]
quote:
Originally posted by James Wesley Chester:
This one is hard.

There is a certain obscenity in the amount of money paid some CEO's. But there is more involved than simply "a day's pay for a day's work." Let's not forget the fields of entertainment and sports. But then sports are entertainment, right?

Typically, candidates for CEO are hired on a contractual arrangement. Pay is typically tied to performance.

Consider: If you save the company $100, we will pay you 1/10th of one percent (0.001) of that savings. Well, that turns to be 10 cents for every $100. When you have a company like, say, General Motors with an annual _profit_ of $1,500,000,000.00 a payment of 0.001 becomes $1,500,000.00. Please note that's 1/10th of 1%

If the company is willing to "talk" in whole numbers, that immediately becomes ten times that amount, or $15,000,000.00.

For the company, that's chump change.

For the CEO, it's at least a new boat.

It's a matter of marketable skills.

It's only money anyway.
I guess the last part was a bit of a joke...

Anyway... Who exactly are you comparing [other] business CEO's to when you talk about Sports & Entertainment? Surely not the players? They would be the workers wouldn't you think?

What makes you overlook the CEO's or equivalents in Sports & Entertainment?
The players and movie stars aren't running the business affairs of their teams.

I don't get you point in bringing that up but you will note that at least in the NBA there is a salary cap!... and there are still people saying they [the players] are paid too much but common sense will tell you that those players are making serious chump change once you look at the whole scheme of things.
quote:
Originally posted by Nmaginate:
quote:
Originally posted by James Wesley Chester:
This one is hard.

There is a certain obscenity in the amount of money paid some CEO's. But there is more involved than simply "a day's pay for a day's work." Let's not forget the fields of entertainment and sports. But then sports are entertainment, right?

Typically, candidates for CEO are hired on a contractual arrangement. Pay is typically tied to performance.

Consider: If you save the company $100, we will pay you 1/10th of one percent (0.001) of that savings. Well, that turns to be 10 cents for every $100. When you have a company like, say, General Motors with an annual _profit_ of $1,500,000,000.00 a payment of 0.001 becomes $1,500,000.00. Please note that's 1/10th of 1%

If the company is willing to "talk" in whole numbers, that immediately becomes ten times that amount, or $15,000,000.00.

For the company, that's chump change.

For the CEO, it's at least a new boat.

It's a matter of marketable skills.

_It's only money anyway._
I guess the last part was a bit of a joke...

Anyway... Who exactly are you comparing [other] business CEO's to when you talk about Sports & Entertainment? Surely not the players? They would be the workers wouldn't you think?

I was comparing methods of acquiring services.

What makes you overlook the CEO's or equivalents in Sports & Entertainment?
The players and movie stars aren't running the business affairs of their teams.

The example was about the contracting method.

I don't get you point in bringing that up but you will note that at least in the NBA there is a salary cap!... and there are still people saying they [the players] are paid too much but common sense will tell you that those players are making serious chump change once you look at the whole scheme of things.


My use of "chump change" was comparative.

The point of the thread, I thought, was the pay given by the employer to one versus the other.


PEACE

Jim Chester

You are who you say you are. Your children are who you say you are.
The basic corporate fallacy is that CEOs' pay is tied to performance; it is not. The Council for Corporate Reform's studies, and the investment guru Warren Buffet, have said time and time again, CEOs' pay is more tied to his relationship to the corporate board, which btw, he selected. CEOs get these runaway salaries because if they (the bd) give them out, they in turn will be rewarded with runaway salaries themselves. They sit on the bd for the ABC Corp and give the CEO X. Then, they turn around as CEO of XYZ Corp and tell their bd, "We are industry leaders and we should pay (me) like we are. Look at the ABC Corp., they pay their CEO X. I should be paid X+. {Wink, wink, nod, nod}" It's similar to the negotiation tactic of pro sports. "Last year the 1st round, 1st picked Defensive tackle signed for X. I'm this year's 1st round, 1st picked DT, so I gotta get at least X+."

The cost savings/CEO scenerio was long ago debunked with that CEO "Buzzsaw" somebody, with Kimberely Paper. He went through the company consolidating functions and laying off thousands. And he was handsomely rewarded. But 3 years later, it came out that the company was going broke because it did not have the worker base to produce its products or service its accounts.

But the difference with pro sports and corporations is that sports teams don't claim mission #1 as being increasing shareholder value.

Shareholder value is the reason CEOs will shut down a factory and/or ship thousands of jobs to Indoneasia, saving the company say $50,000,000 over 5 years. But then the bd will provide, and the CEO will accept, $48,000,000 in bonuses (on top of his $2,000,000 salary), where's the savings?
quote:
My use of "chump change" was comparative.
You don't say... Roll Eyes
quote:
The point of the thread, I thought, was the pay given by the employer to one versus the other.
One versus the other WHAT??? In the comparative fields??

If you are going to "compare" a Fortune 500 type business to the NBA, etc. functional and equivalent counterparts need to be aligned in order for the comparison to carry.

Frankly, I don't think a player on a team or an actor per se compares to a CEO of some other type of company. If so, then you specify how. If you were not referencing sports players and actual entertainers then who were you referring to in those industries?

__________________________________________
************************************

I guess you can disregard what I've said above. I just saw your in-quote notes about "acquiring services" and contracting... However, again, a salary cap exist in the NBA via a percentage of team revenues...

[This message was edited by Nmaginate on February 19, 2004 at 08:06 AM.]
A salary cap, and my knowledge is very limited, is a restriction of the employer who is a member of a group with rules all members have voted on.

There is no such, upper limit, constraining free enterprise in general.

The formula seems to be determined by value to the payer. How much are you willing to pay for what you want?

Until Curtis Flood created Free Agency, the answer by owners was "As little as I want." Curt Flood changed that to the answer by players, "Whatever I can negotiate."

PEACE

Jim Chester

You are who you say you are. Your children are who you say you are.

[This message was edited by James Wesley Chester on February 19, 2004 at 11:06 AM.]
You have a hard time answering questions directly don't you?

Again, the NBA and I'm sure the NFL have salary caps. It doesn't take you acknowledging it for it to be so. Now, MLB doesn't have a cap per se but you can best believe there won't be another A-Rod! Hockey is in dire straights financially perhaps at least partly due to not having a cap.

You're on the InterNet... google NBA or NFL and salary cap.... It's just that simple... So, NO, in the NBA for sure there are no more "whatever I can negoiate" without limits contracts.

I know for sure, I follow the NBA...
quote:
I honestly don't know what relationship you see in how CEO'S are paid, and the salary cap system in sports.

It's a different subject.
You are the one who brought up the comparison about how contracts are negoitated. Salary caps have everything to do with how contracts are handed out.

Playing ignorant doesn't help you. I asked you a few questions for clarity. You clarified and that point on salary caps still applied. I could give a damn whether you like salary caps or not. As we see, you wanted to plead ignorance of salary caps at first... now all of a sudden you want to question what "relationship" I see...

I never claimed there was a "relationship"! I only made the point that there is a salary cap in the NBA (which you tried to act ignorant of or act as if I was not telling the truth about it since you don't like salary caps...)

quote:
There was no outstanding question. You said saw a subsequent post, and negated your then current post.
Pleading ignorance again????????????????????

I responded to ONE of your posts to which I initially saw only your remarks outside of the quote of mine you referenced and then once I realized you also responded within the quoted section PART of what I said did not apply because you addressed or gave an answer to what I said. Yet, the salary cap issue was and is still relevant.

Again, playing ignorant and now trying to distort things will not help you.

There is no reason why there can't be a salary cap, hard, soft, flexible or whatever on Executives. You made the comparison to sports and I informed you that there are some pro sports were a definite salary cap exist.
quote:
YOUR WORDS:

Let's not forget the fields of entertainment and sports. But then sports are entertainment, right?

Typically, candidates for CEO are hired on a contractual arrangement. Pay is typically tied to performance.
And, yet and still in the NBA players are still awarded contracts based on their performance or star status. Marquis superstars earn the "max" contract under the salary cap regulations and the year-to-year escalation is tied to the years in the league (senority)...
quote:
Curt Flood changed that to the answer by players, "Whatever I can negotiate."

As I said, in MLB that may still be true but it is not so in the NBA anymore.
quote:
A salary cap, and my knowledge is very limited, is a restriction of the employer who is a member of a group with rules all members have voted on.

There is no such, upper limit, constraining free enterprise in general.

I don't know exactly what you mean by the last sentence, but Kweli lined out how executives interact with their boards. That vehicle which provides them with the latitude to increase their negotiating power... a BOARD... can also easily impose limits with as much play as possible within those limits.

Now to your "limited knowledge" of salary caps... Why is it that you are always talking so firm from a position of ignorance! That's an oxyMORON!

"I don't know"..."but I'm sure!" Confused
Even with your rationale, I still don't see a comparison between salary-cap contracts and wages for work done.

"Now to your "limited knowledge" of salary caps... Why is it that you are always talking so firm from a position of ignorance! That's an oxyMORON!" --- Nmaginate

I talk about war. From a position of acknnowledged ignorance. I talk about space from a position of acknowledged ignorance. I talk about a number of things for a position of ignorance. I try to take care to not represent my position/opinion as being based in knowledge. Speaking while acknowledging ignorance is sometimes seen as a part an education process.

Even if it is oxymoronic.

PEACE

Jim Chester

You are who you say you are. Your children are who you say you are.
quote:
Even with your rationale, I still don't see a comparison between salary-cap contracts and wages for work done.

I did not give you a "rationale". I made a statement of fact. FACT: There is a salary cap in professional sports, namely the NBA (and the NFL).

As far as a comparison... *YOU* brought it up!
quote:
JWC: Let's not forget the fields of entertainment and sports. But then sports are entertainment, right?

Typically, candidates for CEO are hired on a contractual arrangement. Pay is typically tied to performance.

... The more the candidate can negotiate, the better it gets.

... It's a matter of marketable skills, and their value to the employer.
quote:

JWC: Until Curtis Flood created Free Agency, the answer by owners was "As little as I want." Curt Flood changed that to the answer by players, "Whatever I can negotiate."
quote:
Anyway... Who exactly are you comparing [other] business CEO's to when you talk about Sports & Entertainment? Surely not the players? They would be the workers wouldn't you think?

JWC: I was comparing methods of acquiring services.

What makes you overlook the CEO's or equivalents in Sports & Entertainment?
The players and movie stars aren't running the business affairs of their teams.

JWC: The example was about the contracting method.

The "comparison" is that in the very fields you named (Sports & Entertainment) and explicitly linked or compared in terms of the "methods of acquiring services" and "contracting methods" that a salary cap regime exist where at one point and time the Curt Flood rule - "Whatever I can negotiate." - was... was (past tense) the order of the day.

Feigning ignorance and acting like you don't get it won't help you. The fact is if it is desired - a salary cap - it will and can be done. Again, you admittedly brought the comparison between sports and CEO's.

So what is your problem? Just can't admit that you choose a faulty analogy or what?
quote:
Speaking while acknowledging ignorance is sometimes seen as a part an education process.

You were not and are not trying to be educated. You are asserting your opinion and because someone like me ask you to clarify your position you get defensive and can't even think straight or something.

In order to be educated you have to listen and accept FACTS when they are presented.

Again... FACT: Salary caps exist in [some] sports... of which you compared to the CEO's functionally... I even asked you how you were comparing them to which you said by the "methods" mention above. Hence you had no problem "comparing" sports (making no distinction between the ones with or without salary caps; thus suggesting that you had no problem with that - then - either.)
quote:
Even with your rationale, I still don't see a comparison between salary-cap contracts and wages for work done.

Salaries within a salary cap regime are "wages for work done" where the "Pay is typically tied to performance" and "candidates" are "hired" or 'signed' on a "contractual arrangement."

Ever heard of incentive clauses?
That's contractual and tied to performance!

Now, what don't you understand about the comparison YOU started?
quote:
Even if it is oxymoronic.
Stop making excuses... Your 'rationale' here has nothing to do with what I said. Again, you're not approaching this topic trying to learn something. At least not by anything you've posted so far. You have posted strictly to assert your opinion to which you have held throughout regardless of the information presented.

That's your posture almost always. This is no exception. Speaking as if one is informed or "right" from a position of ignorance is what I was talking about and you do that very often!

It's when someone who is dumb [ignorant] but thinks he's smart or parades around as if he is when the educational process is thrown out the window, save the School Of Shame and Hard Knocks!
Should we start with movie stars, rap artists, and sports figures? Their salaries are far and away the most out of line with what they actually do for the society. How can anyone morally justify making a million dollars for only playing a 'game' like basketball for example, or being a celluloid hero in the make-believe world of movies and music?

In comparison, CEO's have been known to save companies from financial failure, and keep millions of employees on payrolls. Thats what they get paid for. But you've got sports figures who not only get paid millions to 'play' games, but often screw up their role model status and poison the minds of young children. Why do we not praise CEO's but give music, movies, and sports HEROs a pass?
The argument can also be made that there is a difference between the athletes and entertainers, and CEOs. Specifically, Athletes and entertainers don't have a legal obligation to maximize shareholder value, whereas CEOs do.

The reality is that the CEOs with runaway salaries and outrageous golden parachutes are also the captians of the ships sinking fastest.

Bottomline, CEO salaries have little relationship to their performance; rather, their pay is more a function of self-dealing in the corporate suites.

If corporate boards took their role (obligation) seriously, they would rein in these runaway salaries or at least tie the salaries to long-term objectives.

(But if they did that, their boards might do likewise.)
Athletes and entertainers, although certainly self-centered, are certainly accountable to shareholders. Ever heard of Disney? Ever heard of the NFL? How about Virgin Records? Did you see the flap that Viacom took over that portrayal of Reagan?

And even more poignant that your previous error is the fact that entertainers and athletes SHOULD be more accountable simply because of their greater influence on the minds of children! I mean, to miss that is indictive of how little you see or understand.

No dear, socialist fantasy and class warfare about the working world is never a good mindset to harbor hate with. There are black CEOs whom you've never even heard of, and that is a lack of knowledge on your part, so who are you to decide its YOU who knows better than an organization if the CEO they choose is worth a salary given by those who offered him the position in the first place?

Puhleeze, you are off in fantasy world now.

Since race is your sole bag, answer me this:
Which would be more of an asset to a society in general, a hundred highly paid skilled black CEO's, or a hundred highly paid black baseball players? Don't even try this 'I hate the successful' bs, its so pathetic.
If Chrysler had not hired Iococca in the eighties and paid him millions to save the Chrysler corporation from extinction, a 'miracle' by all accounts, how many black employees would have lost their jobs? Answer=170,000 give or take a few, within one month.

You need to educate yourself kweli, this 'me against success' attitude isn't going to help you go anywhere. You should be asking yourself what you will do differently once YOU become a CEO, not expressing jealousy and ignorance.
quote:
Originally posted by DeltaJ:

If Chrysler had not hired Iococca in the eighties and paid him millions to save the Chrysler corporation from extinction, a 'miracle' by all accounts, how many black employees would have lost their jobs?


"Save Chrysler"??? LOL I think the U.S. government did that with a bail out. You're hilarious! Big Grin
Sorry, athletes and entertainers are NOT accountable to the shareholders, they perform; but do not make program decisions.

Whether entertainers and athletes should be accountable for their impact on children is irrelevent to a discussion of salaries, unless that is a part of their job description. Not mentioning this is not indicative of anything other than my ability to focus on an issue.

SGT, I mean, DeltaJ, where have I even implied race in this thread. Again, focus please.

To answer your question, I'd say a hundred highly paid Black CEOs. Now what?

Stop with the putting words into my mouth. I'm pretty good at saying what I mean. I have never expressed a "me against success attitude."

I don't have a problem paying Iococca Millions for producing, nor Gates for producing. I do, however, have a problem with CEOs being paid millions for not producing. I have a problem with CEOs that collude with corporate boards to award themselves millions in salaries and other forms of compensation like "forgivable loans", selling stock of options before they are granted, hundred thousand dollar birthday parties (at corporate expense), and hundred million dollar life insurance policy against which the CEOs borrow, while the corporation they are sheparding is lossing marketshare, share price is declining, revenue is declining, and just about any other measure of success, other than CEO pay, is absent.

And, guess what? I'm in good company in my concern.

No, I am not jealous or ignorant. I am, however, concerned about the millions of Americans that have lost their jobs and retirements, while those that made the decisions are rewarded.
Truth is as often as not CEO's are brought in to trim operating budgets, thats what keeps the company alive. THAT is what CEO's do, keep things running in good times and bad. And as often as not, the bad times are beyond their control, they simply have to survive them. And they get dropped all the time, just as anyone else who doesn't perform gets dropped.

You have to understand that often when a company is in deep trouble, a CEO is 'brought in' to make cuts, keep things afloat, and their salaries are negotiated beforehand, nothing uncommen about that. Applies to ballplayers too. If they aren't producing, and bringing home the gold for the company, they STILL going to collect on that CONTRACTED salary, no? I don't see much difference at all between a ballplayer and a CEO in that regard.

And entertainers make 'program decisions' all the time. The more I think about this, the more I see that CEO's, execs, ballplayers, actors, workers of all types, are doing exactly the same thing. But we'll let that go for now.

So, its only CEO's whose money you'd like to take from them. Hmmm, thats one heck a philosophy. I suppose if a ballplayer "wasn't producing", you take his money too of course, since in the interest of consistency that also would constitute being paid millions for not 'producing'. That is unless there isn't any principle behind this.

But for some reason its only CEO's, hmmm. What if employees aren't producing? Some execs can make a million, take that too?

You know I'm kidding, but fact is its not even you or I's business how anyone else runs a company. There is no sense in a free society of even worrying about this. Don't like CEO's, don't be one.

I was just trying to point out that the talent to run sometimes extremely complex multinationals or huge enterprises isn't something that is easily obtainable. Few, if any, are casually paid lots of money for nothing, there's a whole lot of interest in their performance by those who know business and are incurring the risk. Now of course, theres the odd story now and then, but you have to keep the media stories in perspective.

You can be sure that noone, not even CEO's, get a free ride. The rewards are great, but rather than chop them all down, lets focus on lifting up others, unless you believe in that 'zero sum' economic theory.(you thought I forgot)

Isn't it interesting that we tend to focus or gaze at bringing down someone to 'equity', rather than lifting up someone to equity. Major difference between us I think.

This fascination with killing CEO's is a true gem of the media.

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