Executive pay might be the biggest scandal of the day in Big Business. We regularly read of CEOs earning five to six hundred times the average wage of their employees.
The Brits are tossing about the idea of
having shareholders decide matters such as executive compensation. Take the decision-making out of the hands of the bloated boards of directors and transfer that power to where it belongs - those who own the companies.
I'm all in favour of that. CEO's and Directors have been stealing from companies and share holders for years, often as their companies report losses. That's what it is: stealing. It's a racket. It should have been stopped years ago by our gutless politicians.
ReplyDeleteThere's more. Remember the Nortel fiasco? The CEO promoting company stock all the while quietly selling his own shares followed by bankruptcy with employees moved to the bottom of the creditors' list. Workers lost their pensions, etc. Corporations need to be chained up. They need to learn that their existence is a privilege and they have responsibilities beyond immediate greed.
Audiences who watched "Wall Street" frequently missed that Gorden Gecko was the villain.
Wait a minute. Does that mean that Rupert and I won't be able to serve on each other's compensation committees? We'll need some time to identify some "stakeholders" who like things the way they are or create some new ones if necessary. Then we can all present our cases to the corporate governance committee.
ReplyDeleteToby, sorry to beat a dead horse, but I would support the restoration of Teddy Roosevelt's ideas on the role of corporations in a progressive democracy. We've endowed the corporate sector with a form of super-citizenship through yielding certain aspects of state sovereignty to them. That has to end.
ReplyDeleteJohn B., sorry, I forgot about you and Rupert. What was I thinking?
ReplyDeleteThe Mound of Sound said, "Toby, sorry to beat a dead horse, but I would support the restoration of Teddy Roosevelt's ideas on the role of corporations in a progressive democracy."
ReplyDeleteKeep on beating that one, Mound. It needs to be heard and understood.
Of course it's worse than just the actual money they're paid. A bunch of that money comes in stock options, which has resulted in top executives not just grabbing lots of the company's cash but trashing the companies to get more, by spending all the profits and then borrowing stacks of dough on top of that to pay for stock buy-backs, which allow them to exercise their options and sell their shiny new shares at a premium. Doesn't leave any money for investment or research, but apres dork, le deluge.
ReplyDeleteCorrection: Doesn't leave any money for investment or research or decent wages for the rank and file.
ReplyDelete"Say on pay" already exists. Is it effective? That remains to be seen.
ReplyDelete