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Unless you are any of the above,it is still none of your business.
Actually LOTS of us are indirect shareholders with 401 K's that are invested in various mutual funds (S&P 500 funds etc). In fact I've seen articles that state that up to 71% of Americans have money invested in 401K's etc - and that probably includes YOU (if it doesn't it should).
So, when corporate heads end up essentually driving a company into the ground and then are kicked out with a massive golden parachute, he is looting money from you and me. Not only do the employees who get laid off suffer, but the stockholders too are getting the shaft.
If this was a rare occurance I wouldn't be particularly concerned, but it seems to be a growing trend.
Something is seriously wrong when events like this keep occuring. It's not good for the employees, it's not good for the stockholders, and it's not good for the country. It IS however good for a relatively small group of company heads who are all too often on the boards of other companies. I can't help but suspect sometimes that they just end up trading places and scratching each others backs with obscenely high compensations.
The company CHOSE to hire him and to provide the benefits in question,good or bad choice it is ultimately their decision to make.
Indeed it is, but as I mentioned, it seems to be happening frequently enough that I can't help but wonder if there is underhanded collusion going on. If so, I would think that is criminal activity. The board of directors is supposed to watch out for the interests of the shareholders - and I often suspect that they are merely watching out for their OWN interests.
So, was the choice merely a "bad" choice, or was it a matter of "you give me a good deal on a job heading up 'company A' (where you're on the board) and then I'll give you a good deal on a job heading up 'company B' (where I'm on the board) and we'll both clean up at the expense of the stupid shareholders"?
Sometimes the relationships between the various board members and their postions on other companies can lead to serious conflicts of interest.
Maybe that would explain why sometimes the compensations of various company heads are so high.
Ken
Last edited by LordBalfor; 01-28-2008 at 02:05 PM..
PS - Here's a book ("Pay without Performance") about the very issue I bring up - ie possible collusion bwtween board members and CEO's to enrich themselves at the expense of employees and shareholders:
Do a search on "collusion between management and board of directors" and you find all kinds of articles on this subject, so I'm not alone in supecting that some kind of hanky-panky often goes on.
“collusion between management”? Why would one companies board of directors hire incompetent ceo’s of another? Yet it’s done everyday and with many companies. They are kind’a like a gang of criminals who lookout for each other. If it were hourly employees in the office or out in the shop – they’d be fired for failure to do their job properly. These are pathetic upper manager CEOs who destroy a company and then allowed to cut and run with the piggybank. Bull*****. They are criminals. If I had stock in Alco (that picked this criminal up) I’d dump it.
Eight, ten or twelve that makeup a board of directors are all just ceo’s from other companies working together in a gang like atmosphere each backslapping one another and getting each other more of the company money. Pay for performance needs to be the rule in management as well as occupational.
I am a stockholder in several companies and I have the right to know what money is being paid out for these leaders of the industry. I have the right to comment and I do exercise my rights to get ride of members of the board as well as the coe’s. Stockholder and consumers are the boss of these companies.
The relationship between the board and CEO is way to cozy these days. Why would the board of directors agree with such lavish compensation and even a better severance package. And nobody better tell me that this is what it costs to get talent. Most of these people have proven themselves to be clueless and utterly incompetent. If I was a stockholder I would feel royally shafted.
I'm certainly not CEO material, but I don't think I could do any worse than some of these guys. I believe they lack common sense and street smarts.
It's not jealousy. When companies slash workforce to "cut costs" and "increase profits".... and then a CEO for that same company rakes in millions as a bonus because of his "cost cutting measures" or as a severance, it's dispicable and shameful. The beauty of an amoral economic paradigm.
Yes, the rich get richer and the poor get poorer. It's definitely not jealousy but greed. As to anyone's business, sometimes these salaries are published in newspapers for comparison purposes - open to all.
Did you people not read NOC's post, or did you just choose to ignore it.
Quote:
Some people fail to realize that when these CEO signed on for that position they get stock options up front as well as salary. So when they are ousted or leave when a company is failing they sell said stock for what the market price is or I believe the company buys back those shares. It's usually higher than what they got it for initially. So it's not as easy to just fire a CEO and have him walk out with a pink slip and a box with pics of the family, dog some pens and your stapler.
These employment agreements are written and signed before the CEO is hired, so the company has no choice but to abide by the contract. If you have stock in a company and don't like the contract or the potential CEO, make you voice known and vote against it. Otherwise, stay out of his/her business.
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