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"It's a waste of shareholder value to greatly overpay someone that much."
Oh really? So, you know better than the market?
Where does this idiotic view that "the market" is infallible come from? The Great Depression was "the market." The 2008 collapse and ensuing recession were "the market." McDonald's pink slime is "the market." Martin Shkreli is "the market."
I actually agree with a lot of what you say. But that's really a problem with the Boards of Director of those companies rather than the blanket notion of CEOs being paid too much. Melissa Mayer should have been capped figuratively a long time ago. But, at the same time, Yahoo is a sinking ships, so that Board will eventually get what's coming to it in terms of share value.
I agree it is for the boards, I am not in favor at all of gov intervention.
But with the boards, it seems just a case os "i scratch your back, and you scratch mine" as the boards are often made up of CEOs/former CEOs and influential executives; not really much incentive to not give out a lucrative compensation package.
I also do not like this whole tax break and subsidy wars going on among localities for companies. There is nothing that can be done unless everyone enacts laws against it. While I do actually support it in some sense, I think it has gotten ridiculous for many places. I do not blames companies for this at all, I blame governments.
Lets look at why cities, give special tax breaks and subsidies to a company to open t facility with a lot of jobs.
1: They need to lower the unemployment rate in their cities. There are a large group of people that can qualify for the jobs they bring to the city. They do it for the purpose of making their city, the best choice for the company.
2: They know, when the company is up and running, they will greatly increase the taxes to the city. Employees pay taxes, and with more people working at better pay, the tax revenue goes up such as retail businesses paying more taxes. .
3: Tax brakes to the company only last for so long. After that the company is just another tax producing revenue to the city.
In the long run, the city will come out way ahead by attracting the jobs and money to the city. Other businesses will also be opening all over the city, when a new company comes to town and produces a good size payroll.
In the past, manufacturing was really limited to a few big cities. Today with modern transportation, modern communication, etc., manufacturing is no longer limited to just a few choice cities. A lot of small towns and small cities are no longer left behind, but are growing as the companies in the country spread out more.
For more remote parts of the country, going to subsidies, tax breaks, etc., is the only way to grow the employment opportunities for that city.
Another thing to look at, is a lot of these growing areas, can lower the cost of operation/taxes for a company to the point by as much as 40%. That has been pointed out in numerous articles in business publications. Example, move from Los Angeles area to Texas, and you can develop up to a 40 lower cost, which can be used as profit, allowing a lower price to attract more business, and or increase wages.
I saw an article by a man that moved his large printing company from Los Angeles to Tulsa Oklahoma. He wanted to greatly increase the size of his operation, but it would take 2 1/2 years to get the permits to do so. He was attracted to Tulsa Oklahoma. They got his permits to enlarge the plant over 50% in 10 days. They assigned him a man from the city, who helped draw up the papers and helped him hand carry to papers to the right person. No less environmental friendly, or anything like that, just not 54 bureaus he would have to satisfy in California. He sold his Ca plant, for enough to pay for the brand new one in Tulsa, pay for the move, and new equipment to run the facility and pay employees moving that wanted to go with him. His employees were especially happy, as now they could afford to instead of renting apartments, could now buy nice middle class homes. On top of that, the new facility allowed him to lower prices and become the strong company in his field.
And he is hiring Americans, who were born here. If you look at the same same happening in Silicon Valley companies, where the IT jobs are reported to be taken about 74% by foreign born workers.
The company moving overseas we keep seeing people posted on these threads, which they assume happens when a company bales out and leaves the area, is not the big thing. Companies moving to lower cost areas of the country with lower costs to do business as the example above shows, and Automation is what is forcing so many people out of work.
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Too many people think US companies are patriotic and will sacrifice for the good of the country.
They cannot afford to. If they sacrifice for the good of the country, or good of the state, or the goods of the city and stay there and lose money, they will soon be out of business.
Some parts of the country are driving companies from the city, and state, with too much regulation, high taxes, and high operating costs.
Where does this idiotic view that "the market" is infallible come from? The Great Depression was "the market." The 2008 collapse and ensuing recession were "the market." McDonald's pink slime is "the market." Martin Shkreli is "the market."
Actually, no. As much as you want to believe it, the Stock Market Crash of 1929 wasn't the cause of the Great Depression. After all, there's the wheeze that 9 of the last 4 recessions have been predicted by a stock market crash. We've had stock market crashes more severe since 1929. 1987 is a good example. Instead, the Stock Market Crash of 1929 actually reflected the problems with the broader economy, in particular the decline in the money supply. What's more, it was the government moves that took place after the Crash that devastated the economy: 1) Taxes on individuals and corporations were increased, with the top tax rates raised from 25% to 63%; 2) Government spending increased by 50%; the Hawley Smoot Tariff Act eviscerated global trade; and 4) the Federal Reserve increased the interest rates and tightened the money supply even further. Funny, but items #1-3 are precisely what Bernie Sanders wants to do. Those who don't study history, etc., etc.
And you forget that the 2008 collapse was the result of wholesale government intervention in the mortgage markets beginning in 1995. By 2001, the Congressional Budget Office was recommending that the underwriting of FMAC and FMAE be tightened up, noting that the creditworthiness of mortgages was beginning to decline dramatically. The Bush administration went before Congress to ask for tighter underwriting, only to be fought tooth and nail by idiots such as Barney Frank. So no tightening of underwriting and the rest is history.
As far as Martin Shkreli is concerned, he'll get his.
Yes, see that is a problem.. However, I don't know all the details. The jobs they cut might have been part of the company that wasn't making money. Or maybe the jobs cut were the lowest performers that dollar for dollar weren't making enough to cover the salaries, workers comp, taxes, etc.. True though, take away half of the CEO salary and they're still making $5,000,000 and could likely fund 100 salaries.
Who knows, maybe there should be an average.. all employees salaries are averaged and the CEO can't be paid more than 50 times that number.. If they want to make more money its in their best interest to raise the lower workers salaries.. Who knows.
I think this should be the case. This year's Walmart CEO pay shouldn't have an increase from last year's knowing they cut down on stores as well as employees (those who cannot move to another store.) Should it be, there is a problem. We shouldn't let companies get away with cutting workers and giving them a pat on the back for it.
Your rant aside, working class wages in inflation-adjusted dollars have remained constant for the past fifty years. They haven't gone up, true, but they really haven't gone down either.
Now that that's been dealt with, let's ask the question. Why shouldn't a CEO make that much? Why should a Bill Gates, a guy whose work has meant a huge, material improvement in the overall welfare of the world, not have the kind of money he does? Bill Gates undertook huge personal risks, made savvy decisions, and worked his butt off to create Microsoft today, so that people like you can watch Netflix, order from Amazon, bang out screeds on their keyboards and hit the Send button. Yeah, he was in the right place at the right time. But he made the most of it, and the world is a better place because of it.
What about Warren Buffett? Had you invested in Berkshire Hathaway at the very beginning of his tenure, you would have realized a 1,826,163% increase in share value. What's more, he made this money by investing in undervalued companies and making them successful. How has he not earned every dime of his money?
Same is true of the Waltons. Sam Walton figured out a better retail mousetrap in backwoods Arkansas, creating better purchasing and merchandising that translated into better prices for shoppers. And the Waltons completely transformed the retail landscape as a result. You can complain about small town merchants all you want, but Wal-Mart meant a real alternative for shoppers in small markets. Why shouldn't the Waltons benefit from Sam's vision and hard work? I'm waiting.
Further, you don't seem to understand what constitutes wealth. You seem to have this vision that people such as Gates and Buffett have bags of cash lying around their mansions like an old Richie Rich or Scrooge McDuck comic book. You know, the cartoons where they dove into a swimming pool filled with dollar bills. In truth, their wealth is made up of the shares of their companies. I mean, if you had a house that tripled in value over the course of ten years, should you have to pay capital gains on it while you're still living there? Of course not.
Buffett and Gates are superstars. Best of the best in their fields.
Most CEO's are not Buffett or Gates.
Period.
How about that loser - the appropriately named DICK FULD of Lehman Brothers. Arrogant piece of garbage. How many gazillions did he make, and the guy had absolutely no clue about the risks his company was taking on. And thankfully they were the one investment bank that did not get bailed out back in 2008. Good riddance.
Where does this idiotic view that "the market" is infallible come from? The Great Depression was "the market." The 2008 collapse and ensuing recession were "the market." McDonald's pink slime is "the market." Martin Shkreli is "the market."
Those are all situations where the market is distorted. The longer the misallocation is allowed to continue, the sharper and more painful the correction. The Great Depression was in large part made worse by terrible federal reserve policy (contracting money supply) and terrible federal government policy (higher taxes, tariffs, and spending cuts). The 2008 collapse was manipulation of ratings, fraud, and cheap money. The entire economy was an out of control bubble completely removed from reality. It crashed BECAUSE the market was not allowed to function as it should not because of "the market". The market wouldn't push Mcdonald's to try and cut costs with pink slime, if consumers reacted and all refused to eat that garbage. Yet, the drive thru windows are full all day long. They must be telling Mcdonalds that I will pay you for pink slime.
I think this should be the case. This year's Walmart CEO pay shouldn't have an increase from last year's knowing they cut down on stores as well as employees (those who cannot move to another store.) Should it be, there is a problem. We shouldn't let companies get away with cutting workers and giving them a pat on the back for it.
“There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” Sam Walton
Buffett and Gates are superstars. Best of the best in their fields. Most CEO's are not Buffett or Gates.
Period.
How about that loser - the appropriately named DICK FULD of Lehman Brothers. Arrogant piece of garbage. How many gazillions did he make, and the guy had absolutely no clue about the risks his company was taking on. And thankfully they were the one investment bank that did not get bailed out back in 2008. Good riddance.
But you don't really get to decide who is who. That is up to the company and the board of directors. Certainly not a bunch of know nothings on a message board.
Dick Fuld and Lehman Brothers also went under. Big time. He was disgraced, has been subjected to countless lawsuits, and his career is finis. Fuld's incompetence has zip to do with his pay, and vice versa. And so Lehman suffered.
“There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” Sam Walton
That has nothing to do with their CEO making more money from closing stores and cutting jobs.
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