"We’re paying executives like successful entrepreneurs-without the entrepreneural risks

[kpete]

Sunday, April 06, 2008
"We’re paying executives like successful entrepreneurs, without asking them to take entrepreneurial risks"
by Chris in Paris · 4/06/2008

Good results or bad, real or fake, job creation or job cuts, it's all the same to corporate America. Regardless of the deliverables, executive compensation never stops rising. The same people in Congress who believe until their dying day that tax changes can make or break business never make the same link with executive compensation. Apparently they must believe that negative tax consequences for business (and I mean the business itself) would not encourage or discourage behavior. We can offer tax incentives or tax penalties for everything else but not for executive pay. Funny how that works.

http://www.nytimes.com/2008/04/06/business/06comp.html?_r=2&pagewanted=1&oref=slogin
The compensation research firm Equilar recently compiled data about chief executive pay at 200 companies that filed their proxies by March 28 and had revenues of at least $6.5 billion. And the data illustrates Mr. Hodgson’s point. It shows that average compensation for chief executives who had held the job at least two years rose 5 percent in 2007, to $11.2 million (If new C.E.O.’s are counted, that number is $11.7 million). Even though performance-based bonuses were down last year, the value and prevalence of discretionary bonuses — ones not linked to performance — were up. A result is that C.E.O.’s who have held their jobs for two years received an average total bonus payout of $2.8 million, up 1.1 percent from 2006.

http://www.americablog.com/2008/04/were-paying-executives-like-successful.html#disqus_thread

[dkf]

1. Its hard to justify this line of attack now with Bill Clinton making $52 million

for giving speeches.

We no longer have any rationale for excessive executive pay.

[RaleighNCDUer]

2. There never has been an honest rationale for excessive exective pay. nt

[dkf]

3. Yeah and no rationale for making $50+ million giving speeches.

[asthmaticeog]

4. Which has nothing to do with this. Go build your strawman elsewhere.

[Rex]

10. So why not take it up with the people who are paying the money?

So Bill should turn down money to help Americans sleep better at night? Last time I checked, Bill did a great job as CEO of the country. Plus this has nothing to do with the OP.

[MonkeyFunk]

5. What's that got to do with this story?

[dkf]

6. The argument is that executives are making a lot of money without having a lot at risk

therefore they do not deserve the high pay.

There is no risk in giving speeches, indeed there is hardly any labor involved.

Ergo, how can you argue against executives making so much when they actually put in more labor towards their gains than does Bill Clinton.

Bill and Hillary have destroyed our arguments against excessive executive pay.

[MonkeyFunk]

7. Apples and oranges

it's like saying David Beckham makes a fortune, therefore we can't discuss genocide in Darfur. One has nothing to do with the other.

Bill Clinton isn't a CEO. He's getting paid exactly what people are willing to pay him. The problem with CEOs is that there's nothing approaching a "free market" for their services.

[dkf]

8. Well then we get to the point of why people are willing to pay him so much.

And that is questionable...

And I do think people wonder why Beckham gets paid so much when so many are suffering. It goes back to taxation in order to provide services.

And in a way there is a free market for CEO services...its how other CEOs are getting paid.

[MonkeyFunk]

9. And other CEOs determine the pay of other CEOs

by the incestuous board-of-directors relationships they have.

But to imply that Bill Clinton's income is relevant in any way to this story is just dumb.