Archive for the ‘CEO pay’ Category

What a mess! Not only is the economy crumbling around us, but the government bailout that was supposed to help homeowners stay in their homes, has become an unprecedented one-two punch that is taking the wind out of taxpayers.

 

No one wants to see the financial crisis worsen, but the idea behind a bailout was to help the people who were ending up in foreclosure or without a job because businesses couldn’t borrow even enough money to make their payrolls. Now it seems as if the bailout – which was railroaded through Congress – may not be designed to help those in real need at all.

 wallet of credit cards

Blogger Amey Stone (www.BloggingStocks.com) hit the nail on the head with her list of “Eight ways the Wall Street bailout is adding insult to injury”. According to Stone these are a few of the egregious ways that the companies benefiting from the bailout, keeping taxpayers from benefiting at all (heavily edited – see full text here):

 

·        Not only are Wall Street financial firms getting bailed out but they get to keep their big bonuses too. Estimates anticipate that as much as $70 billion (of the $700 billion bailout money) will get paid out in bonuses to bankers this year.

 

·        After getting an $85 billion bailout, AIG sent salespeople on a lavish retreat at the St. Regis resort in Monarch Beach, Calif. It cost AIG $440,000 but AIG execs should have put a stop to such unnecessary spending, not just because it was a potential public relations nightmare, but because it was the wrong thing to do for a company that could not make ends meet without burdening taxpayers.

 

·        Some Lehman executives got signing bonuses to stay at the banks that acquired their divisions in bankruptcy proceedings. Nomura, which bought Lehman’s European and Asian divisions, gave bankers cash equal to last year’s bonus if they agreed to stay at Nomura for a year, for example. Shouldn’t keeping their jobs have been compensation enough given the massive firings on Wall Street?

 

·        CEOs of failed financial firms still get a golden parachute to soften the blow. Even though their firms’ profits have been essentially wiped out, most will still be making millions at taxpayers’ expense. Five dollar bill

 

·        Banks that are sharing in the $700 billion bailout money are supposed to use it to keep the economy humming, right? Nope. It turns out that banks can use the money however they want. Banks that are getting government bailout money are contemplating using it for other things — like buying other banks — not adding it to the lending pool so they can make more loans and end the credit squeeze.

 

So, the question is: What can be done about this entire situation that has become a train wreck for every taxpayer?

 

Where does the greed and corruption stop? Who will be held accountable in government and at every corporation that now has its greedy hands out begging for more so they get their lavish trips, bonuses and golden parachutes?

Enough is enough!

 

As a taxpayer, are you fed up with this? Please, share your thoughts.

 

 

Is it just me, or does it seem that fairness and equality are two terms that are totally foreign when it comes to the American workforce?

 

CEOs of some of the biggest companies in America are getting paid very well to:

1. Run their companies into the ground while

2. Laying off, downsizing or shutting their doors.

 

This has become very apparent over the last few weeks while the entire country has struggled with a massive financial sector bailout. We have yet to see how the $700B “fix” will be implemented and whether some financial institutions will continue to pay exorbitant salaries and offer golden parachutes for their CEOs at the taxpayer’s expense. AIG certainly seems to think spa treatments and golf outings are an acceptable way to use taxpayer dollars. CEO

 

In 1980, the average CEO of a major corporation made 42 times the average hourly worker’s pay. By 2000, the average CEO salary reached an incredible 531 times that of an average hourly worker.

 

Is tying executive compensation to the financial success of the company realistic? Does anyone honestly believe that all or most of the appreciation in the value of a company is directly related to the CEO’s talent?

 

24/7 Wall St has done an analysis of companies whose CEO’s need to see the writing on the filing and get ready to do some job hunting. Regardless of this type of projection of imminent demise, these CEO’s will probably enjoy a separation package that will soften any smack from hitting the pavement.

 

One such CEO was Michael Ovitz who enjoyed a $140 million paycheck for 14 months of work at Walt Disney. Shareholders sued but a Delaware judge ruled that the board did nothing wrong in awarding that huge severance package.

 

But Disney continues to be a solid company. Some boards award large packages to CEOs even as the executives trash their shareholders’ investments. Take, for example, Gary Smith of Ciena whose shareholders lost 93% during a four-year period, 2001-2005. His compensation during that time? $41.2 million.

 

Anderson Cooper has begun reporting on a new list, “10 Most Wanted: Culprits of the Crash,” featuring some of the most outrageous and egregious acts of greed on Wall Street, naming names of CEOs who have taken advantage of their companies, the bailout,  taxpayers and their own employees.

 

These outrageous compensation packages do not seem to have anything to do with the level of responsibility, or with how well a company is run. Wad of money

 

I know investors can vote with their feet – leave the dog that won’t hunt. And some activist shareholders fight overly generous pay. But another approach is to look for companies that have great performance and reasonably paid leaders. That is a sign that boards and top managers feel a responsibility toward shareholders, says Michael Brush, in an article on MSN Money. Brush includes a list of some of those companies as well.

 

But wouldn’t it just be easier if boards and search committees would hire people based on previous performance and – even more important – compensate more in line with what the company, and shareholders, can afford to pay?

 

Have you ever lost out because your company’s stock dropped, while the CEO was landing softly on a pile of cash? What are your thoughts?

 

 

 

 

Click here: CEOs Are Overpaid

 

http://money.aol.com/investing/ceos-who-have-to-go?icid=200100397x1206422760x1200354294

 

Click here: The 5 most outrageously overpaid CEOs – MSN Money