Obama to Limit CEO Pay to $500K

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Obama to Limit CEO Pay to $500K

Postby MoghLiechty2 » Wed Feb 04, 2009 9:54 pm UTC

Obama plans to put a salary cap of $500,000 for CEO's of businesses that are benefiting from the new round of bailouts.

Former Treasury Secretary Paul O'Neill said Obama's move "is going to be a very popular populist move.... even though I think it is a large mistake."
___

Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable, expressed concerns about the new executive compensation restrictions.

"The pay scale for Wall Street is different for the pay scale for America," Talbott told ABC News. "So these numbers look large, but the market value for these executives - there's a very small talent pool of individuals that have the education, experience and knowledge to operate a global, international services firm in this day and age."

Executives may quit banks that fall under the new $500,000 pay limits, he warned.

___

Both of these smart gentlemen seem to have made valid observations on Obama's move. To me, this seems nothing more than a stunt to make it seem like we're holding these banks accountable. What is going to happen to the free market for CEO's? What talented, able-minded CEO is going to want to work for a company where the pay is far below what he could get something else? And how is a failing bank going to get out of the hole without a talented, able-minded CEO?

Discuss...
Last edited by MoghLiechty2 on Fri Feb 27, 2009 5:55 am UTC, edited 2 times in total.

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Re: Obama to Limit CEO Pay to $500K

Postby 22/7 » Wed Feb 04, 2009 10:01 pm UTC

I have to admit that I don't see the problem. If they'd been able to get the job done on their own, they wouldn't need the money. I don't understand the entitlement that leads someone to say "I need a shitton of money but you shouldn't be able to see what I do with that money or ask that I don't spend it recklessly, etc." Are we as a nation really so entitled that we can do this without feeling even a little shameful?
Totally not a hypothetical...

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Re: Obama to Limit CEO Pay to $500K

Postby Garm » Wed Feb 04, 2009 10:11 pm UTC

I have to say that I'm very curious about the attitudes of some of these banking officials. They fucked up. Plain and simple. They totally screwed the pooch. Their businesses are in total disarray and yet they feel as though they are entitled to massive bonuses and/or huge salaries. Why? No other business works that way. No other business gets to privatize gains and socialize losses. So yeah... if a few bank executives quit over a salary cap so be it. Taking TARP funds is tacit admission that they can't do their job anyway and deserve to be fired.
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Re: Obama to Limit CEO Pay to $500K

Postby e946 » Wed Feb 04, 2009 10:14 pm UTC

MoghLiechty2 wrote:for CEO's of businesses that are benefiting from the new round of bailouts.

This is the key. When we're talking about the government giving money to companies that would otherwise fail, the "free market" has already gone out the window, and this seems like a good move considering all the stories I've seen about huge bonuses and such.

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Re: Obama to Limit CEO Pay to $500K

Postby Hawknc » Wed Feb 04, 2009 10:34 pm UTC

MoghLiechty2 wrote:Both of these smart gentlemen seem to have made valid observations on Obama's move. To me, this seems nothing more than a stunt to make it seem like we're holding these banks accountable. What is going to happen to the free market for CEO's? What talented, able-minded CEO is going to want to work for a company where the pay is far below what he could get something else? And how is a failing bank going to get out of the hole without a talented, able-minded CEO?

Given the current state of many banks, I don't see a correlation between CEO competence and remuneration. Besides, if a CEO can get a company out of the hole and out of debt to the government, I'd wager there'll be a fuckton of money waiting for him when he does so that he stays on and keeps the business profitable.

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Re: Obama to Limit CEO Pay to $500K

Postby Jack Saladin » Wed Feb 04, 2009 11:12 pm UTC

The point the people in the OP seem to be missing is that it's still 500k of public money. If it wasn't for the public paying for them, they wouldn't be getting anything. The citizens of the United States are shelling out billions upon billions of dollars to keep these companies afloat - should the executives of these companies really be able to just pocket that cash to buy themselves another house or ten more cars? Is that really where you want your tax dollars going? The idea that these people can fuck up, cry for everybody else in the country to cover their losses, and then take record breaking bonuses is just fucking ridiculous. These people aren't free marketeers. They're just trying to work the system, any system, for as much personal gain as possible, with no regard for anyone else. Fuck them. They shouldn't be getting half a million dollars at all.

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Re: Obama to Limit CEO Pay to $500K

Postby cerbie » Wed Feb 04, 2009 11:28 pm UTC

MoghLiechty2 wrote:Executives may quit banks that fall under the new $500,000 pay limits, he warned.
And the bad news is...? Who decided to go after profits that were too good to be true, exposing themselves and their customers to extreme risks, while trying to act like the risk was not there?

"So these numbers look large, but the market value for these executives - there's a very small talent pool of individuals that have the education, experience and knowledge to operate a global, international services firm in this day and age."
...yet, many banks and others who offer types of credit aren't being run by such talented people, but pay them as much as if they were?

"I don't think the issue is a dollar amount. It's being paid what you're worth… Would you be willing to work for less than what you think you're worth?"
I'll take someone with less of an ego, who might not be sure if he's good enough for the many million dollar salary from us any day, over the guy who knows that he is.
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Re: Obama to Limit CEO Pay to $500K

Postby Joeldi » Thu Feb 05, 2009 1:03 am UTC

When I heard this on the radio this morning I changed my opinion of Obama's presidency from "Something interesting happening in the USA that might work out very well for the world" to "Hey Obama you're so fine, you're so fine you blow my mind, OBAMA, OBAMA" etc.
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Re: Obama to Limit CEO Pay to $500K

Postby Zuffox » Thu Feb 05, 2009 1:28 am UTC

Citigroup's acquisition of a $50 million plane (which Geithner managed to ... coerce them from buying) and some Wall Street blokes paying ~$18.5 billion in bonus didn't sit very well with Obama. Maybe it's payback time.

While enforcing requirements for those who receive the money seems fair game, 500K is a pretty ridiculous pay for a Wall Street CEO. Interesting to see who will accept such a wage.

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Re: Obama to Limit CEO Pay to $500K

Postby Silas » Thu Feb 05, 2009 1:34 am UTC

I can kind of see the exec's position: "this company is a heap of shit- that's largely because of my (well, our- I wasn't in this by myself) mistakes. But instead of firing me and buying off my contract, the Board wants me to stick around and try to fix things. Except they don't want to keep paying my old salary, because they're- understandably- pissed off about how I ran the ship aground.
"But I have to look at this as things are now. If I stay on for another year, it's going to mean a metric shit-ton of work, and there's no reason to suspect I'm going to be able to accomplish anything. Even if I do the impossible and bring us into the black, what's in it for me? I'll only get a half million (a pittance, next to my ill-gotten gains from years past), and still be remembered as the guy who sank AIG and had to get the Feds to bail him out. It's all pain and not even a chance of gain. It's just not worth the ulcers for a half million. Instead, I'll just retire on my savings- buy a cattle ranch, maybe- I hear Idaho is nice."

Having said that, it's important tor realize that just because these executives aren't unreasonable for holding out, doesn't mean they should be paid whatever it takes to keep them. They're just not that good (wasn't that the point?).
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Re: Obama to Limit CEO Pay to $500K

Postby Durandal » Thu Feb 05, 2009 1:34 am UTC

Joeldi wrote:When I heard this on the radio this morning I changed my opinion of Obama's presidency from "Something interesting happening in the USA that might work out very well for the world" to "Hey Obama you're so fine, you're so fine you blow my mind, OBAMA, OBAMA" etc.

And you don't think your change of opinion might have something to do with why he is doing this?

The general not-making-fucktons-of-money public will of course condemn CEOs being (in their opinion) overpaid, and laud efforts to knock them down a level. Whether it is the right thing to do is another question entirely. A similar discussion.

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Re: Obama to Limit CEO Pay to $500K

Postby Marquee Moon » Thu Feb 05, 2009 2:00 am UTC

Jack Saladin wrote:The point the people in the OP seem to be missing is that it's still 500k of public money.



I don't think that's relevant. The important disagreement is whether these banking CEOs are greedy scum bags who can't do anything, or very intelligent and part of a very small group of people that can effectively run a large banking firm (ie. whether they're worth $500k+ or not). If they are worth paying $500k+ and if they refused to work for only $500k, it would be in the government's interest to pay them $500k+ because we want a effective banking system. Just because the CEO wins doesn't necessarily mean that the tax payer loses. We pay the CEO lots of money and we get their services back, so we could be at a net positive or net loss depending on how valuable the CEO is.

So are banking CEOs worth that much? I don't think so, but it's a tricky question that, I think, brings out the emotional rather than logical sides of people. But is a salary cap going to have any noticeable positive impact on the economy or working Americans? I doubt it, and I think the Obama administration's time and effort could be better spent elsewhere.

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Re: Obama to Limit CEO Pay to $500K

Postby scwizard » Thu Feb 05, 2009 2:03 am UTC

How else do you propose that we stop CEOs from running off with public money?
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Re: Obama to Limit CEO Pay to $500K

Postby scrovak » Thu Feb 05, 2009 2:09 am UTC

How about considering this:

Say they are part of a select, brilliant group of people who can do their job. They failed at their job, bad enough to require tax payer money. The gov't gives them tax payer money, and makes sure the money is properly appropriated; bettering the corporation, and pulling the corporation up to where it can help itself. They limit the CEO's salary, so he has an incentive to actually do what he has to in order to help the corporation, rather than quitting and running off, losing his retirement, and vested interests.

Sound decent yet?
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Re: Obama to Limit CEO Pay to $500K

Postby Jack Saladin » Thu Feb 05, 2009 2:14 am UTC

Joeldi wrote:When I heard this on the radio this morning I changed my opinion of Obama's presidency from "Something interesting happening in the USA that might work out very well for the world" to "Hey Obama you're so fine, you're so fine you blow my mind, OBAMA, OBAMA" etc.

When I heard on the radio yesterday morning that Obama was giving a big thumbs up to the American military and intelligence services illegally snatching foreign citizens from their own countries and imprisoning them without trial I changed my opinion of Obama's presidency from "maybe he won't be so terrible" to "just another war criminal".

Guess we listen to different stations.

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Re: Obama to Limit CEO Pay to $500K

Postby MoghLiechty2 » Thu Feb 05, 2009 2:18 am UTC

Marquee Moon wrote:
Jack Saladin wrote:The point the people in the OP seem to be missing is that it's still 500k of public money.

I don't think that's relevant.

And I would agree. The $900 Billion was supposed to be a bailout, not a buyout. It was supposed to be something that needed to be done because the alternative was so much worse (businesses go under, people lose jobs, depression take 2, etc.), and all of a sudden it's turned into the government deciding how to run the businesses, with the justification: "Oh we gave you all this money you better do what we say."

So did the businesses and executive make poor decisions? Duh. But is MoghLiechty2 going to trust the government to make better decisions than a private business that is ran by hundreds of thousands of intelligent stockholders and an elite panel of management executives? Never.

Now that being said, do I think the effort of these CEO's is worth $millions in salary? Probably not. They're kind of like NFL players: There's not a lot of them, and they're in ridiculously high demand. So they get paid that much, they do great things, and no one breaks a sweat until they screw up... Like Mike Vanderjagt...

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Re: Obama to Limit CEO Pay to $500K

Postby joshz » Thu Feb 05, 2009 2:21 am UTC

Jack Saladin wrote:
Joeldi wrote:When I heard this on the radio this morning I changed my opinion of Obama's presidency from "Something interesting happening in the USA that might work out very well for the world" to "Hey Obama you're so fine, you're so fine you blow my mind, OBAMA, OBAMA" etc.

When I heard on the radio yesterday morning that Obama was giving a big thumbs up to the American military and intelligence services illegally snatching foreign citizens from their own countries and imprisoning them without trial I changed my opinion of Obama's presidency from "maybe he won't be so terrible" to "just another war criminal".

Guess we listen to different stations.
Wait, what?! Where did you hear that?! Remember, Obama's the one who closed Guantánamo and hates torture. I'm definitely going to need a citation on that.
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Re: Obama to Limit CEO Pay to $500K

Postby Jack Saladin » Thu Feb 05, 2009 2:23 am UTC

Bunch of random links I haven't read gathered from the first page on Google for "renditions Obama":
http://eyesonthelies.com/2009/02/02/oba ... enditions/
http://www.propeller.com/story/2009/02/ ... enditions/

I heard it on Reliable Radio New Source as well so excuse the paranoid sounding URLs.

Wiki on related stuffs: http://en.wikipedia.org/wiki/Extraordin ... ted_States

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Re: Obama to Limit CEO Pay to $500K

Postby joshz » Thu Feb 05, 2009 2:27 am UTC

Here's what looks like a better link: http://www.latimes.com/news/nationworld ... ory?page=1

And that's incredibly disappointing. I'm hoping it won't be used in practice, but just the idea of making that order leaves a bad taste in my mouth.

But that's another thread.
You wanna start it, or should I?
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Re: Obama to Limit CEO Pay to $500K

Postby Jack Saladin » Thu Feb 05, 2009 2:30 am UTC

Go ahead. Don't be surprised when more and more stuff like this comes out as Obama proves himself to be like every other American president since the 60s. I think I actually prefer the Republicans, since at least then some Americans can admit they're bad.

And I guarantee 100 fucking percent it will be used in practice. You think the CIA, the C goddamned I fucking A, wouldn't use an option like that when it's available to them? Haha.
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Re: Obama to Limit CEO Pay to $500K

Postby Telchar » Thu Feb 05, 2009 2:31 am UTC

I think this assumes that the entire financial crisis is caused by everyone as a collective and everyone is equally irresponsible...which isn't the case.

I think they both have very good points. If you want that business to make money again, you have to have qualified people at the top. There arn't that many people that can do what they do and have the neccesary skillset to be good at it. If you do that, you lose future profitability so that they can pay that money back.

Look, I'm not saying they are all great guys, some of them made terrible decisions, but some of them have tanking companies because everyone has tanked around them. ie Wells Fargo. Wells Fargo did NOT invest in any real way in either subprime mortgages or mortgage backed securities. However, they have been hit hard by a financial crisis caused by others. Is there CEO to be punished for others recklessness? I think most of them will just retire, and then you are left worse off than you are now.
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Re: Obama to Limit CEO Pay to $500K

Postby joshz » Thu Feb 05, 2009 2:32 am UTC

Jack Saladin wrote:Go ahead. Don't be surprised when more and more stuff like this comes out as Obama proves himself to be like every other American president since the 60s. I think I actually prefer the Republicans, since at least then some Americans can admit they're bad.
Wait, what? Americans *hate* Democrats, in general. Some hate republicans, but why do you think we elected Bush TWICE?! Because not enough hate republicans.
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Re: Obama to Limit CEO Pay to $500K

Postby Jack Saladin » Thu Feb 05, 2009 2:34 am UTC

All the Americans who are against Obama are against him for all the wrong reasons, they don't care about renditions, for example, they just think he's a Muslim. At least I have some commonality with critics of Bush. When they elect a Democrat, there's nobody I can agree with on anything in America for at least four years.

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Re: Obama to Limit CEO Pay to $500K

Postby joshz » Thu Feb 05, 2009 2:38 am UTC

Jack Saladin wrote:All the Americans who are against Obama are against him for all the wrong reasons, they don't care about renditions, for example, they just think he's a Muslim. At least I have some commonality with critics of Bush. When they elect a Democrat, there's nobody I can agree with on anything in America for at least four years.
No, they actually think he's socialist. Big difference. Still retarded, but big difference.

But let's go into the other thread with this now. viewtopic.php?f=9&t=34412
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Re: Obama to Limit CEO Pay to $500K

Postby Dream » Thu Feb 05, 2009 5:24 am UTC

Doesn't this (the OP) really just mean that the $500,000 cap applies only to salaried earnings? Stock, options benefits in kind and bonuses won't be capped, and make up a very large proportion of CEO remuneration for tax reasons. These people will not suddenly magically become un-millionaires because they can't be paid whatever seven or eight figure sum they're used to. And in any case, money for people like these is just a way of keeping score.
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Re: Obama to Limit CEO Pay to $500K

Postby ameretrifle » Thu Feb 05, 2009 6:21 am UTC

I've always been vague on exactly what the hell these CEOs actually do anyway, so count me with the "cry me a river" crowd.

I do agree that it's a bit of a stunt, but I don't think that these businesses would suddenly be in even WORSE straits if their CEOs suddenly decided $500K and stock options just wasn't good enough for them. They'd just have to find new CEOs-- and who knows? Maybe they'd draw from a bank of people that need the money, or are willing to try different strategies, or actually have sense. I should think the CEO world would be better for a little new blood.

And even if that weren't the case... I'd think that with the exception of healthcare and humanitarian efforts, government money should come with strings attached. We're not exactly in the black ourselves; it infuriates me how LITTLE oversight these bailouts have been getting. Of course, the government isn't even good at overseeing its OWN damn budgets, so maybe it was doomed either way...

Essentially, why should this be so different from the government buying stock in the company? When you get enough shares, you get to dictate the terms. Isn't that how it works? Why are these businesses complaining so much about not getting to have it both ways? "Don't you interfere with the sacred free market!! Unless we need money, in which case you should pay us off or else we'll lay off thousands of workers. What?! Regulations?! You commie bastards! Leave the free market alone!!" Gah...

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Re: Obama to Limit CEO Pay to $500K

Postby scwizard » Thu Feb 05, 2009 6:35 am UTC

Rush Limbaugh agrees with this.

He says "once you accept your failout the government owns you, haha sucker"

http://www.rushlimbaugh.com/home/daily/site_020409/content/A_Teachable_Moment__Bailouts__Authoritarians_and_Corporate_Jets.guest.html wrote:I'm not defending it. I want to give you something more chilling to consider. I realize that the federal government now has the power to tell any of these peons, these idiots that went along with this bailout how to run their businesses. These idiots, these titans, these so-called Masters of the Universe who ran around with their hands out, they've lived on everybody else's money for so long that they thought nothing of living on ours, and so they willingly take these bailouts.

Once they do that, Carl Levin can tell them what they can do any time of the day. He can tell 'em what kind of bathroom they're going to have; he can tell them where they're going to go, and this scares the hell out of me.


This of course fits in with his "Obama will seize complete authoritarian control by making the people and corporations of the country dependent on the government" theory.
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Re: Obama to Limit CEO Pay to $500K

Postby Iori_Yagami » Thu Feb 05, 2009 11:46 am UTC

Oh poor, poor CEOs... With such little money they can't even by any meat and
will probably not be able to pay for electricity for their little flat... And their grandmother will die, since medicines are soooo expensive... *sniff, sniff*

NOT!!!

Oh YEAH! Many, MANY times before people suggested those f*cking politiCANS, businessCANs and others sky-dwellers to live for $200 a month. Try that out! Maybe then they would get a hint..?
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Re: Obama to Limit CEO Pay to $500K

Postby 22/7 » Thu Feb 05, 2009 2:10 pm UTC

Jack Saladin wrote:All the Americans who are against Obama are against him for all the wrong reasons, they don't care about renditions, for example, they just think he's a Muslim. At least I have some commonality with critics of Bush. When they elect a Democrat, there's nobody I can agree with on anything in America for at least four years.
Hey Jack, can we put a hold on the Americans bashing thing long enough to pull our heads out of our asses? 2 things, first, no president is going to perfectly fit your criteria for "good president" because no president is going to be you. Second, your above assertion is flat-out wrong. I have an uncle who is a fabulous example of someone who believes that Obama is a move in the right direction from the last 8 years, but isn't nearly left enough. Actually, my money would be on that being the case for lots of people on these forums. Being born in America doesn't somehow make you incapable of rational thought. That they don't spend their time on the forum you frequent or, if they do, that they don't run from political thread to political thread shouting down a president who is indeed a big step in the right direction from the previous 8 years (I would probably say at least 20, but yeah) 2 weeks into his presidency, at a time when the effects of the vast majority of his policies have yet to be felt and are not going to be felt for months if not years, does not negate their existence.
Dream wrote:Doesn't this (the OP) really just mean that the $500,000 cap applies only to salaried earnings? Stock, options benefits in kind and bonuses won't be capped, and make up a very large proportion of CEO remuneration for tax reasons. These people will not suddenly magically become un-millionaires because they can't be paid whatever seven or eight figure sum they're used to. And in any case, money for people like these is just a way of keeping score.
The $500,000 includes things like benefits and bonuses (if my understanding is correct), but they can still be given stock options which cannot be cashed out until after the company has become solvent and paid the guhvmint back. Oh, and it's really not just a way of keeping score. They've created a lifestyle based on a particular income and aren't going to be able to maintain that income from here on out. Keep in mind that this is on the order of 1/10 of their previous income for the year. I certainly couldn't maintain my current lifestyle on 1/10 of my current income. I'm not saying we should be holding vigils or sending them cheese baskets and band-aids and casseroles, but it is an enormous pay cut.
MoghLiechty2 wrote:
Marquee Moon wrote:
Jack Saladin wrote:The point the people in the OP seem to be missing is that it's still 500k of public money.
I don't think that's relevant.
And I would agree. The $900 Billion was supposed to be a bailout, not a buyout. It was supposed to be something that needed to be done because the alternative was so much worse (businesses go under, people lose jobs, depression take 2, etc.), and all of a sudden it's turned into the government deciding how to run the businesses, with the justification: "Oh we gave you all this money you better do what we say."

So did the businesses and executive make poor decisions? Duh. But is MoghLiechty2 going to trust the government to make better decisions than a private business that is ran by hundreds of thousands of intelligent stockholders and an elite panel of management executives? Never.

Now that being said, do I think the effort of these CEO's is worth $millions in salary? Probably not. They're kind of like NFL players: There's not a lot of them, and they're in ridiculously high demand. So they get paid that much, they do great things, and no one breaks a sweat until they screw up... Like Mike Vanderjagt...
It is absolutely relevant. You're asking that these companies be allowed to operate in a free market while completely ignoring the fact that they did, they fucked up, and now their funding is coming from our taxes. Which means the free market scenario is out the window. You can't have your cake and eat it, too.
Totally not a hypothetical...

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bigglesworth wrote:If your economic reality is a choice, then why are you not as rich as Bill Gates?
Don't want to be.
I want to be!

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Re: Obama to Limit CEO Pay to $500K

Postby The Great Hippo » Thu Feb 05, 2009 2:22 pm UTC

If a company doesn't want to abide by the requirements we're putting on the bail-out money, then they can feel free not to take the bail-out money. I don't care if the government tells them they have to all wear a funny red fez to work with a flashing neon sign on top that says "I'M WITH STUPID". We're the ones offering the money--they don't get to dictate the terms by which we offer it to them. Now put on your new hats, fuckfaces.

That quote from the OP about 'different pay-scales' is some epic bull shit, but I didn't expect much different.

MoghLiechty2 wrote:They're kind of like NFL players: There's not a lot of them, and they're in ridiculously high demand.


...and I'm betting a vast chunk of their salaries are justified by internal pressures that have little to nothing to do with performance and everything to do with company morale, image, and/or nepotism. Except I don't think you have a problem with nepotism in the NFL.

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Re: Obama to Limit CEO Pay to $500K

Postby 22/7 » Thu Feb 05, 2009 2:36 pm UTC

The Great Hippo wrote:...and I'm betting a vast chunk of their salaries are justified by internal pressures that have little to nothing to do with performance and everything to do with company morale, image, and/or nepotism. Except I don't think you have a problem with nepotism in the NFL.
To be fair, from the eighty-some-odd interviews I've heardon the topic on NPR, it actually is a very performance-based culture. You make money for the company, and they'll reward you very well. That said, if you don't do a good job, they won't reward you with million dollar plus bonuses, but you can also just pick up your skill set and go somewhere else where your salary might actually make up for your lack of huge bonuses. So while it's not a great system, it at least appears to be initially a performance-based compensation system.
Totally not a hypothetical...

Steroid wrote:
bigglesworth wrote:If your economic reality is a choice, then why are you not as rich as Bill Gates?
Don't want to be.
I want to be!

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Re: Obama to Limit CEO Pay to $500K

Postby iop » Thu Feb 05, 2009 2:47 pm UTC

MoghLiechty2 wrote:
Marquee Moon wrote:
Jack Saladin wrote:The point the people in the OP seem to be missing is that it's still 500k of public money.

I don't think that's relevant.

And I would agree. The $900 Billion was supposed to be a bailout, not a buyout. It was supposed to be something that needed to be done because the alternative was so much worse (businesses go under, people lose jobs, depression take 2, etc.), and all of a sudden it's turned into the government deciding how to run the businesses, with the justification: "Oh we gave you all this money you better do what we say."

I, on the contrary, do hope the government is going to do something other than just saying "here's some money, keep doing business as usual". I would have liked the government to, for example, have the car maker's top management fired, so that there is a change and a chance of things actually getting better.

Since there doesn't seem to be a sensible, obvious reason (see also here) why executive salaries have increased so much in the last 25 years, I think it can be a good idea for the government to step in. If the salary cap makes companies think twice before going to milk the government, all the better.
Maybe a better alternative to a full cap could be to give the 500k$ as salary and additional remuneration as very long-term stock options to create an incentive to work toward long-term health of the company instead of trying to push short-term profit.


By the way: George Washington earned about 1000x the average worker's income.

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Re: Obama to Limit CEO Pay to $500K

Postby The Great Hippo » Thu Feb 05, 2009 2:58 pm UTC

22/7 wrote:To be fair, from the eighty-some-odd interviews I've heardon the topic on NPR, it actually is a very performance-based culture. You make money for the company, and they'll reward you very well. That said, if you don't do a good job, they won't reward you with million dollar plus bonuses, but you can also just pick up your skill set and go somewhere else where your salary might actually make up for your lack of huge bonuses. So while it's not a great system, it at least appears to be initially a performance-based compensation system.


Fair. But let's at least acknowledge that getting paid thirty million every year for 40 to 60 hours of work a week is a little... funny. I don't think it's fair to describe it as a product of 'supply and demand'; I'd be very surprised to find out that CEOs possess a skillset that is just that fucking hard to come by. What I suspect is that the payscale has grown increasingly skewed because of internal pressures, nepotism ("give me a raise and I'll give you a raise"), so on, so on. The bonuses and raises themselves might be based on performance, but the amounts that these bonuses and raises consist of have been inflated enough to make the Hindenburg look like a leaky balloon twisted up to look like a giraffe.

iop wrote:By the way: George Washington earned about 1000x the average worker's income.


Are you adjusting that for the fact that the average worker in the 1790s was paid shit? I don't even mean that as 'he was paid very little'; I mean he was paid with actual pig shit. After a hard day's work they gave him a cart of it and told him to enjoy.

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Re: Obama to Limit CEO Pay to $500K

Postby 22/7 » Thu Feb 05, 2009 3:04 pm UTC

The Great Hippo wrote:Fair. But let's at least acknowledge that getting paid thirty million every year for 40 to 60 hours of work a week is a little... funny. I don't think it's fair to describe it as a product of 'supply and demand'; I'd be very surprised to find out that CEOs possess a skillset that is just that fucking hard to come by. What I suspect is that the payscale has grown increasingly skewed because of internal pressures, nepotism ("give me a raise and I'll give you a raise"), so on, so on. The bonuses and raises themselves might be based on performance, but the amounts that these bonuses and raises consist of have been inflated to an insanely ridiculous degree.
Well, I don't disagree that the amounts have been inflated. But I also don't think people are actually making thirty million a year for 40-60 hours a week for two reasons. First, the highest I've been hearing for CEOs were on the order of maybe 15 million (including salary, bonuses, benefits, etc.) and from the people in the industry that I've heard speak about it, we're looking at 60 hours being a slow week.
Totally not a hypothetical...

Steroid wrote:
bigglesworth wrote:If your economic reality is a choice, then why are you not as rich as Bill Gates?
Don't want to be.
I want to be!

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Re: Obama to Limit CEO Pay to $500K

Postby Gunfingers » Thu Feb 05, 2009 3:09 pm UTC

And remember that their pay is set by the shareholders, people who's income is dependent upon the company not wasting money. It's kind of like baseball players. Anyone could walk onto a field and play baseball, but by having those pros do it they get a lot more fans, sell a lot more tickets, unload a lot more merchandise, and make a lot more money. It is literally more profitable to pay a guy $15 mil a year than to let an amateur do it for free. I will never understand why.

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Re: Obama to Limit CEO Pay to $500K

Postby The Great Hippo » Thu Feb 05, 2009 3:11 pm UTC

22/7 wrote:Well, I don't disagree that the amounts have been inflated. But I also don't think people are actually making thirty million a year for 40-60 hours a week for two reasons. First, the highest I've been hearing for CEOs were on the order of maybe 15 million (including salary, bonuses, benefits, etc.) and from the people in the industry that I've heard speak about it, we're looking at 60 hours being a slow week.


'Salary' might not be the right word, then? For instance:



And... really, I don't care if you work 80 hours a week, that's still pretty fucking ridiculous. To an outsider like me, it looks like some sort of money-based arms race.

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Re: Obama to Limit CEO Pay to $500K

Postby MoghLiechty2 » Thu Feb 05, 2009 3:22 pm UTC

Gunfingers wrote:And remember that their pay is set by the shareholders, people who's income is dependent upon the company not wasting money.

Yeah, depending on how the company is set up, but almost always by people who have a huge stake in the current and future success of the company.

Now, the argument I'm hearing a lot for why the government should be allowed to mess with a decision that would normally be left up to stockholders is, "The company already had their chance, and they screwed up." But let me ask the question of: Why did these companies fail in the first place? Was it because they payed their CEO's too much? Was it because their CEO's messed up the job of CEO? Was it because of the impending market collapse?

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Re: Obama to Limit CEO Pay to $500K

Postby 22/7 » Thu Feb 05, 2009 3:29 pm UTC

The Great Hippo wrote:'Salary' might not be the right word, then? For instance:
And... really, I don't care if you work 80 hours a week, that's still pretty fucking ridiculous. To an outsider like me, it looks like some sort of money-based arms race.
Well, I don't think I'd include stock-options in salary, though they're certainly a part of compensation. But remember that stock-options are also heavily performance-based, since the stock will only be worth something if the company is making money. You're right, though, it's a lot of money.
MoghLiechty2 wrote:
Gunfingers wrote:And remember that their pay is set by the shareholders, people who's income is dependent upon the company not wasting money.

Yeah, depending on how the company is set up, but almost always by people who have a huge stake in the current and future success of the company.

Now, the argument I'm hearing a lot for why the government should be allowed to mess with a decision that would normally be left up to stockholders is, "The company already had their chance, and they screwed up." But let me ask the question of: Why did these companies fail in the first place? Was it because they payed their CEO's too much? Was it because their CEO's messed up the job of CEO? Was it because of the impending market collapse?
Of course they didn't fail because they payed their CEOs too much. You're intentionally asking the wrong question to muddy the water here. Yes, the CEOs did screw up their jobs by allowing their companies to do things like issue or buy up shittons of terrible, terrible loans which significantly contributed to the market collapse. So basically, you're trying to take a cause and turn it into an effect. No deal.
Totally not a hypothetical...

Steroid wrote:
bigglesworth wrote:If your economic reality is a choice, then why are you not as rich as Bill Gates?
Don't want to be.
I want to be!

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Re: Obama to Limit CEO Pay to $500K

Postby The Great Hippo » Thu Feb 05, 2009 3:39 pm UTC

MoghLiechty2 wrote:Now, the argument I'm hearing a lot for why the government should be allowed to mess with a decision that would normally be left up to stockholders is, "The company already had their chance, and they screwed up."


Is that the argument you've been hearing? Well, here's a better one:

The government is offering companies a pile of money. The companies are free to accept or reject this money. However, this money is offered only under certain contractual terms. One of those contractual terms is that, in the workplace, ridiculous hats are now mandatory. The company is free to reject these terms, just as they are free to reject the pile of money. But here's the point: You do not get to dictate the terms under which this money will be given to you. It is not an entitlement, it is not a privilege. It is not something 'owed' to them. If I offered you five hundred dollars--but only if you wore this ridiculous hat--would you cry that I have no right?

So, again, my response: Shut up and put on your new hats, fuckfaces.

Also, your question is misleading anyway. What 22/7 said.

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Re: Obama to Limit CEO Pay to $500K

Postby MoghLiechty2 » Thu Feb 05, 2009 4:02 pm UTC

22/7 wrote:Of course they didn't fail because they payed their CEOs too much. You're intentionally asking the wrong question to muddy the water here. Yes, the CEOs did screw up their jobs by allowing their companies to do things like issue or buy up shittons of terrible, terrible loans which significantly contributed to the market collapse. So basically, you're trying to take a cause and turn it into an effect. No deal.


So to solve this, we're going to force the companies to lower their CEO pay? Is that going to make it so that future CEO's don't make bad business decisions? I'm aware that these companies' decisions contributed to the collapse, but how is forcably lowering the pay going to help? Sure, it'll make the bad executive leave (if we ... want that?), but then how is the company going to find a better one?

Seen on monster.com: "Help wanted: Chief Executive Officer for failing financial institution. No experience? No problem! We only pay 5% what you would get anywhere else!"


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