With unemployment in the US at record levels, people losing homes and businesses - why do we still see $100M+ salaries. I'm baffled. My President is baffled. I've been living on my savings and 401K since October. Why is there such a division between the classes of salaries in the US. Just chaps my hide! What makes a multi-million dollar salary OK. http://money.cnn.com/2009/04/05/news/top_ceo_pay/index.htm john
How are they going to pay their staff of cooks, maids, escorts, drivers, gardeners, etc to look after them... that's totally forgetting the same staff at their summer home, ski home, autumn home, random home in other states, random home in other countries, cars, helicopters and pilots, private jets. Come on! The poor sods are lucky if they can afford a newspaper after all that!
One law I would love to see passed is that NO American can make more the President of the US. Currently at $400K Enough. I've made 1/4 that and worked my self to the bone. john
The president may be making $400k, but the amount of things he & his family are given for free, could easily double or triple that salary as a package. Then there's the huge payouts for many higher level politicians for when they retire... so thier base wage could be $5k pa and they'd still be living it up!
Hate to play the devils advocate but if you worked hard to start a business you should be rewarded with $$$ The only salary cap I'd like to see is one on ANY company excepting government bailouts
I don't have a problem with companies paying CEOs huge amounts if they're managing the company well, and bringing in more revenue than their salary. I have a hard time believing that that Motorola guy made the company more than $104 million in revenue, though. And I'm incredibly irked by the fact that the Wall Street guys, who are getting OUR bailout money, are still getting huge bonuses for running their companies into the ground, and taking the rest of the country with them. Or that the CEOs of the Big Three flew into Washington on private jets to ask for a bailout. Frankly, I think a national salary cap would be a blatant disregard of our Constitutional rights. An aspect I don't think you've considered is what these billionaires do with their money. Most of these guys aren't sitting on a horde of gold in a castle. Their money is mainly invested in their company's stocks, which are worth more or less depending on how well the company is doing, which in turns depends on how good of a CEO the company has. They're investing the money back into the company, and they're also stimulating the economy by spending their money. They buy houses, and cars, and expensive things. They build big houses, which employ contractors, architects, plumbers, and other stuff. They hire maids, gardeners, drivers, and other blue collar workers to help them out. In addition, due to the tax structure, many of them make large donations to charities or private institutions as a tax write-off. I go to college, and several of the buildings are named after big CEOs or company founders who made a boatload of money and decided to get rid of some of the excess by donating enough money to the school for them to build a brand new building. I don't think high salaries are a terrible thing, but I think precautions need to be taken. Companies shouldn't just throw money at a CEO and give him a blank slate to do what he wants, even if it's bad for the company. If the stockholders and the Board of Directors at the big financial companies had been doing their jobs, the overpaid executives making all of the terrible business decisions should have been fired without severance, not given golden parachutes for bankrupting their companies. And, of course, any company that is receiving bailout money from the government should have strictly capped salaries. In this scenario, I think the $400,000 figure is quite reasonable. Cap their salaries until they're done getting bailed out, and until they've finished repaying the American people. That will give the CEOs some incentive to get their company off governmental life support as quickly as possible. But, for a private, non-subsidized company, I don't think a national, government-regulated salary cap is justified.
I agree. I'm in the early stages of founding a company right now, and you bet I'll be working my ass off for as long as it takes to make it happen - and I hope to come away from it as a multimillionaire in a few years. Of course, it's certainly possible that it'll go nowhere and I'll end up with nothing. But that's how risk works. That comment isn't devil's advocate, that's understanding the free market. The absolutely worst possible thing you could ever do for the economy is cap executive salaries, as every company larger than a local pizza shop will IMMEDIATELY pack up for another country. And while I don't think that the bailouts should be happening period, I do agree that the companies involved should be subject to salary caps. If you don't agree with companies paying their execs so much, don't use their products. Write them saying why you've dropped their products.
I think if company accepts a government bail-out or becomes publicly owned then ALL salaries and pensions should be re-evaluated (and in most cases, seriously slashed) Other than that, as a business owner myself, I think if a company is making the money, then the salaries can, and should reflect that. If my company made a few million in profit one year, you're damn right I'd take a good slice of that home with me
I'm not an economist, nor have I really studied in the area. However, it seems to me the massive rise in executive salaries is somehow related to institutional stock ownership. Back when more individuals held public company stocks, they'd get ticked off if the company wasn't making money and paying dividends and vote off the board of directors, etc. With so many retirement funds, mutual funds and other institutions owning and trading stocks, they just don't seem to take as much interest in seeing that the company is run right. Don't get me wrong -- I'm very much for rewarding entrepreneurs and innovators. My father was a small businessman for many years. But as most have said, something is out of whack when the average worker in a company makes $40,000 per year and the CEO is making $10 million per year (or more) with the company losing money. Since the government is bailing out companies, I agree wholeheartedly that there should be strings attached, including salary caps and bonus cutbacks until the money is repaid. In fact, why not hinge bonuses on a profit plus bailout money repayment?
I have to disagree. While I do agree that success should be rewarded, salaries should have a very low limit for ceo's of companies that are doing badly, I'd say something like 30% of worst paid Employee or so to make it really hurt, same goes for those receiving bailouts.
Lots of people are worth $100M a year if you think about it. When you have profits in the $bns and a good CEO can up your profits by 10% or so then they are worth that $100M. Whether they deserve it is a different matter.
I love how you all blame the guy getting paid, when given 1/2 a chance you'd jump at a salary like that. How many of you have EVER negotiated a salary only to say, "No, maybe I'm not worth that; can we go with a lower number please."? I don't know about you, but I negotiate for me. I get the best deal that I can. If there is some one out there that is willing to pay me what I ask, then I take it. If not, I lower my bid. But to expect people not to negotiate the best package they can for themselves is just silly. If any of you worked in a large corporation at a higher management level, you know these people earn every penny they get. You think it's a joy ride being on the hook for all the employees and stockholders? You think they have a magic ball that lets them read the future or do you think they sweat and bust their brains trying to make sure that the company succeeds? I, for one, applaud people that excel at what they do. I also applaud someone that has the skills and balls to win a negotiation for a great salary. Salary caps smacks of petty jealousy and the continuing drift of the United States of Whining into a disgraceful cluster-**** of socialism. Christ, next you'll be organizing mobs of people to ransack their homes with torches and pitchforks, and then move to large collective farms. Oh and then we can pay all people that have a higher education $40k a year. Just to be fair, you know, to everyone else. Let's see how far that will go. If you used air travel as one point of referance, then look at what a Corp. pays for a CEO to travel to a location and compare that to what it costs to fly the President. Last time I looked, the "private" jets leased by most companies are Gulfstream sized, while the The Prez has not only his plane, but usually 2 support aircraft. More if there is a helicopter involved, since it's usually moved by a C-5. So compare apples to apples. The President's household staff and security easily breaks $100 million a year.
During normal economic times, no. Salaries should not be capped. I think, at the moment though, salaries should be under review and bonuses should be outright canceled. If a company is accepting bailout money, then there should be some very strict control of that companies expendature on salaries, particularly to the people running the business (If they can't steer it through this downturn and they need tax payer money to do that, why on earth do they deserve the salaries they were getting?). I cannot agree that salary should be dependant on revenue developed anywhere other than the sales team, or in investment groups, the traders. Simply because the job diversity within companies does not allow every employee to 'generate' revenue for the company directly. Sure, the packer generates it by getting the product ready for shipping, but they're employed to do that, and not a fat lot else - They could hardly be expected (and have their salary judged on) to go suggesting the company and its products to people in their free time. I think the important thing about the Motorola exec is that it was a 'package' not a wad of $104m, which suggests stock as the major part of it, which I doubt he would sell in one sitting. I'd also be curious as to whether he would be allowed to sell it all off at once - That much stock going up for sale from an employee would likely cause massive issues for the company (Think Northern Rock and people pulling their money out). I would, if I could do his job. I can't, so there's no point of me hoping or aiming for it. I'm probably not worth my current salary - Mainly because I browse forums and news sites all day. I'd suggest a lower salary if I hadn't handed my notice in.
Exactly, I'm willing to bet that number also include a fantastic health care package (which in the US is worth it's weight in gold, especially with kids), company car, and the "this and that" which make up any decent compensation package.
Absolutely. I keep forgetting the US doesn't have a 'free' service like the NHS. I'd be slightly miffed if (if I were him anyway), at his level, he wasn't offered a company car.
Hmm, there is the problem that if you cap a salary to much the CEO's and top level managers will leave to jobs where they will get a high salary. In the end you'd probably end up doing more damage to the company by driving people out, though I agree that there should be caps on wages where the government is keeping the company afloat. RwD
Am I jealous of what they get? of course, but then I am jealous of anyone earning even a penny more than I do, it’s human nature to want more… Why would people not grab pitchforks and send the execs to hell after they lost their jobs just so the shareholders and execs can make some more money?
Nexxo's formula for salaries: M = VIP or: Money = how Vital is what you do to the people your job serves multiplied by Importance of the people who your job serves multiplied by how Problematic it would be to replace you with someone who can do the same job to a reasonable standard for the same money or less.
What do you start with for M, though? I mean, taking the example of the Motorola exec again, his 'Money' was clearly started in the millions. Maybe some sort of system based on the "how much is your twitter account worth" could be discussed..
