CEO gives part of his bonus to employees

[zinfamous]

The Free Market (also called The Market) is what liberals and communists fear in the pit of their non-existent souls. The concept of the free market is capitalism at its finest. Free of regulation or oversight, the actions of The Market are dictated only by the pure pursuit of profit, set by supply and demand. Of course, when things go bad, these capitalists need the taxpayer to bail them out. But this is not socialism. Socialism is when black people get free cheese.

God guides corporate executives with a loving but invisible hand to do his will through messages sent by The Market.

Only corporate executives have the skill, foresight, and faith to properly interpret the Will of God as revealed through The Market. They are therefore given gargantuan salaries and are not expected to pay taxes.

The Market is responsible for the Great Bush Economic Miracle which allows CEOs to earn gargantuan salaries without paying taxes.

actually, you have market and capitalism backwards, in terms of which layer belongs to which.

 

[Mursilis]

Liberals: Use facts, logic, and reasoning to explain the problem.

Conservatives: LALALALA I CAN'T HEAR YOU.. YOU'RE JUST JEALOUS OF DEM EBIL CEO'S HURRRRRRRRRRRRRR

You'd be such a better contributor if you'd ever figure out how to suppress your troll side better. It's a shame too, because on some issues, like this one, you've got a very valid point.

Pokerguy: It's hopelessly naive to imagine the market for CEO pay is anything other than completely warped and imperfect. The boards of directors of most public corps. are completely ignoring their fiduciary duties to shareholders in order to protect their own ranks and keep management pay high. It's doesn't take much looking to see the truth, if you're open to it.

 

[TheVrolok]

I'm not a leftist by any stretch of the imagination but executive pay is getting pretty ridiculous.

Companies are making record profits, they're finding more and more ways to cut costs in the global economy, and have more cash on hand than ever before yet prices are climbing faster than inflation and unemployment stubbornly stays at 8% or above.

Meanwhile, the gap in pay between those executives and the rest of their employees grows and grows and grows.

It seems pretty clear what's going on: those at the top are finding more and better ways of increasing their wealth at the expense of others. This is exactly what we should expect from a society of talking monkeys.

Bingo

 

[Phokus]

You'd be such a better contributor if you'd ever figure out how to suppress your troll side better. It's a shame too, because on some issues, like this one, you've got a very valid point.

I'd rather the other side hate my guts and still be right than the opposite. They DESERVE to be ridiculed.

 

[soulcougher73]

Do you think that the $565 million dollars requested for OSHA's 2013 budget is a complete waste?

If they're duplicating the benefits that unions provide, we should get rid of one or the other.

But they dont really serve the same function. OSHA can enforce the law and penelties on a company that does not comply. Unions cannot do that. They can whistleblow and affect changes OSHA may adopt, but they dont serve the same function.

 

[Pr0d1gy]

Phokus you already won this debate 2 pages ago. Don't even worry about it anymore. If these guys want to live in denial that is their right. I don't even bother responding to them at this point because they immediately label me as a lefty and tell me I hate success when, in fact, I am a Ron Paul supporter who is choosing to vote for Obama because Romney is everything that is wrong with this country. Hell, McCain even said that they chose Palin over Romney because she was a better candidate, despite later discovering she was a typical modern Republican (i.e. covered her lack of knowledge and ability with her religious zeal for extreme right ideaology).

Don't waste the time or effort man, it's like telling a Jihadist Muslim that Allah was just a man.

 

[werepossum]

Cool. Good to see a CEO who recognizes that what he builds is also highly dependent on his workers, and rewards them for it. Especially good in this labor market, when even CEOs in Communist China have no real need to incent workers like this.

I don't own a laptop and I would have excluded Lenova for being a ChiCom company. This little blurb just convinced me that if and when we do buy a laptop, Lenova will be at the top of my list. Since they are all built by ChiCom workers anyway, why not reward a CEO who goes the extra mile for his employees?

 

[werepossum]

Phokus you already won this debate 2 pages ago. Don't even worry about it anymore. If these guys want to live in denial that is their right. I don't even bother responding to them at this point because they immediately label me as a lefty and tell me I hate success when, in fact, I am a Ron Paul supporter who is choosing to vote for Obama because Romney is everything that is wrong with this country. Hell, McCain even said that they chose Palin over Romney because she was a better candidate, despite later discovering she was a typical modern Republican (i.e. covered her lack of knowledge and ability with her religious zeal for extreme right ideaology).

Don't waste the time or effort man, it's like telling a Jihadist Muslim that Allah was just a man.

And we all believe you, too. Really. And I'm not just saying that.

Because what is more believable than a Ron Paul supporter voting for a man who is the exact polar opposite? (I'm guessing by your example that your answer would be a Ron Paul supporter who just happens to agree with the left on every single issue.)

 

[bfdd]

Phokus, I was just making a joke lols.

Pr0d1gy, failure. You support Ron Paul, but you'd vote for Obama over Gary Johnson? What issues do you agree with Obama in more than Gary Johnson who is often politically aligned with the man you claim to support?

 

[PokerGuy]

Of course that's a lie, i followed up a general thesis (interlocking directorates) THEN gave you an example (which you refused to respond to because it made you look dumb).

And yet, you asked no questions, then complained when I didn't "answer".

Oh backtracking now huh? Yeah, i'm sure you are 'familiar' with the concept (bullsh*t).

I'm not backtracking on anything. Yes, I'm very much familiar with the concept and the issues surrounding it.

No, CEO's, in MOST cases do not 'earn' their money

Again, there's your idiotic claim. Of the millions of CEO's in this country, you're saying "most" do not earn their money. That's just plain stupid, I'll be waiting for something to back up that idiotic claim.

You apparently have trouble understanding that when someone says "CEO", it doesn't just apply to the CEO of a fortune 100 company, it can apply to a lot of people, from small to large companies.

they don't actually add much value to the organization

Another idiotic assertion. You think Jobs added value to Apple? Most of them add critical value and can make or break the company. They are responsible for a lot of things, that's why many get paid a significant amount.

The real value creators are the ones below him/her (especially scientists/engineers who create the products).

Oh yeah, so now you're making up stuff about who adds value and how much. Do you have anything to back up all these stupid assertions?

Based on all your brilliant insight and knowledge about how the CEO's are just working with consultants who just regurgitate information, your expert knowledge of what value CEO's add, I expect then that you're the CEO of your own mega conglomerate?

Or... more likely, you're just a sore loser who thinks he knows a lot more than he does.

 

[PokerGuy]

Pokerguy: It's hopelessly naive to imagine the market for CEO pay is anything other than completely warped and imperfect. The boards of directors of most public corps. are completely ignoring their fiduciary duties to shareholders in order to protect their own ranks and keep management pay high. It's doesn't take much looking to see the truth, if you're open to it.

That's a completely separate discussion altogether. As I said, I'm very much familiar those issues, and I completely agree that compensation (as well as solid oversight) often gets warped because of those connections. However, that has nothing to do with the idiotic assertions phokus is making that CEO's add very little value, and that "most" do not earn their money. Completely absurd, just more of the drivel from those who can't stand to see others more successful.

Incidentally, I think the guy giving his bonus to the employees is a fine thing to do, just like I would think him giving that money to a charity is a fine thing to do. It's his money and he should spend it the way he wants. That was my first post in this thread.

 

[Phokus]

And yet, you asked no questions, then complained when I didn't "answer".



I'm not backtracking on anything. Yes, I'm very much familiar with the concept and the issues surrounding it.



Again, there's your idiotic claim. Of the millions of CEO's in this country, you're saying "most" do not earn their money. That's just plain stupid, I'll be waiting for something to back up that idiotic claim.

You apparently have trouble understanding that when someone says "CEO", it doesn't just apply to the CEO of a fortune 100 company, it can apply to a lot of people, from small to large companies.



Another idiotic assertion. You think Jobs added value to Apple? Most of them add critical value and can make or break the company. They are responsible for a lot of things, that's why many get paid a significant amount.



Oh yeah, so now you're making up stuff about who adds value and how much. Do you have anything to back up all these stupid assertions?

Based on all your brilliant insight and knowledge about how the CEO's are just working with consultants who just regurgitate information, your expert knowledge of what value CEO's add, I expect then that you're the CEO of your own mega conglomerate?

Or... more likely, you're just a sore loser who thinks he knows a lot more than he does.

You're reading comprehension is, not surprisingly, really terrible.

Originally Posted by Phokus
Learn what interlocking directorates are and get back to me. When you can practically set your own pay and even 'earn' big payouts when you destroy a company, that's not earning shit.

Most CEO's are value transferers, the real wealth creators are a) The original entrepreneurs who created the company and b) the people below them, especially the engineers/scientists who create the products that they sell. There are SOME CEO's who actually do earn it, mainly in the tech sector (the visionary ones).

Interesting how you keep on saying 'prove it! prove it!' then when you quote me, you leave out the critical part:

Oh backtracking now huh? Yeah, i'm sure you are 'familiar' with the concept (bullshit). No, CEO's, in MOST cases do not 'earn' their money, not only because they usually have too much influence of the boards, but also because, with some exceptions, they don't actually add much value to the organization (of course they can certainly destroy it). The real value creators are the ones below him/her (especially scientists/engineers who create the products). Also entrepreneurs who start companies. Even something like long term strategy, which should be one of the biggest, if not the biggest, part of the CEO's job, you would be surprised how little CEO's are responsible for. The dirty little secret is, CEO's are heavily reliant on outside consultants (top dogs like McKinsey, BCG, Bain, Accenture, etc. who typically consult for their competitors as well) to basically regurgitate information on where the industry is heading and how to respond. But yeah, sure, keep believing all CEO's 'earn' their shit and are your mythical hero.

At my last company, every time we had big decisions like outsourcing, mergers acquisitions, spinning off companies, etc. there would be armies of consultants from McKinsey and Accenture advising the CEO on what to do. These were decisions that had long term consequences for the company. And these consultants have WAY more insight into where the industry is heading than our CEO because they consult with our company's competitors as well (in a way it's a scandalous conflict of interest). This is standard operating procedure in most industries. The EXCEPTION is the tech industry where everything moves at blinding speed and a million different directions. You think the CEO of EXXON adds more value than the engineer who comes up with more efficient techniques to drill oil? Give me a fucking break. But in any case, it's quite obvious that YOU don't know how the real business world works and you misattribute success of the company to what the CEO actually does. Really, you're paying a CEO not to fuck up instead of adding a whole lot of extra value.

And no, when i'm talking about CEO, i'm not talking about some rinky dinky 50 person mom and pop shop out in the middle of bumfuck nowhere where the head of the company gives himself the title of 'ceo'. These are publicly traded companies i am obviously talking about.

 

[WackyDan]

Cool. Good to see a CEO who recognizes that what he builds is also highly dependent on his workers, and rewards them for it. Especially good in this labor market, when even CEOs in Communist China have no real need to incent workers like this.

I don't own a laptop and I would have excluded Lenova for being a ChiCom company. This little blurb just convinced me that if and when we do buy a laptop, Lenova will be at the top of my list. Since they are all built by ChiCom workers anyway, why not reward a CEO who goes the extra mile for his employees?

I used to work as a field engineer for Lenovo here in the U.S. Say what you want about them being a Chinese company, but they employ a lot of people here in North America too. They spent $80 million building their corporate campus and U.S. HQ in North Carolina. They are a global company and we shouldn't forget that they employ many Americans in their day to day business.

 

[silverpig]

You're reading comprehension is, not surprisingly, really terrible.



Interesting how you keep on saying 'prove it! prove it!' then when you quote me, you leave out the critical part:



At my last company, every time we had big decisions like outsourcing, mergers acquisitions, spinning off companies, etc. there would be armies of consultants from McKinsey and Accenture advising the CEO on what to do. These were decisions that had long term consequences for the company. And these consultants have WAY more insight into where the industry is heading than our CEO because they consult with our company's competitors as well (in a way it's a scandalous conflict of interest). This is standard operating procedure in most industries. The EXCEPTION is the tech industry where everything moves at blinding speed and a million different directions. You think the CEO of EXXON adds more value than the engineer who comes up with more efficient techniques to drill oil? Give me a fucking break. But in any case, it's quite obvious that YOU don't know how the real business world works and you misattribute success of the company to what the CEO actually does. Really, you're paying a CEO not to fuck up instead of adding a whole lot of extra value.

And no, when i'm talking about CEO, i'm not talking about some rinky dinky 50 person mom and pop shop out in the middle of bumfuck nowhere where the head of the company gives himself the title of 'ceo'. These are publicly traded companies i am obviously talking about.

It's not a conflict of interest. If you work for a consulting firm on client X, you definitely do not work on one of client X's competitors. You also aren't allowed to share most materials with other teams unless they are sanitized of all proprietary information.

While a firm may serve the top 3 competitors in an industry, the individuals serving those clients are not the same, and they only share methodologies and general information, not client-specific knowledge.

 

[hal2kilo]

Phokus, I was just making a joke lols.

Pr0d1gy, failure. You support Ron Paul, but you'd vote for Obama over Gary Johnson? What issues do you agree with Obama in more than Gary Johnson who is often politically aligned with the man you claim to support?

Probably because he lives in the real world and does not want to waste his vote.

 

[Phokus]

It's not a conflict of interest. If you work for a consulting firm on client X, you definitely do not work on one of client X's competitors. You also aren't allowed to share most materials with other teams unless they are sanitized of all proprietary information.

While a firm may serve the top 3 competitors in an industry, the individuals serving those clients are not the same, and they only share methodologies and general information, not client-specific knowledge.

Right, i understand this. Obviously there isn't going to be specific proprietary information being shared, however the information they glean from the industry as a whole, you can pretty much make more generalized 'suggestions' without saying 'x company did this, y company did that, you should considering doing this'.

And besides that, i wouldn't trust any 'chinese walls' that they may have, as we've seen in wall street, there's just too much money being made to really not bypass them.

 

[silverpig]

Right, i understand this. Obviously there isn't going to be specific proprietary information being shared, however the information they glean from the industry as a whole, you can pretty much make more generalized 'suggestions' without saying 'x company did this, y company did that, you should considering doing this'.

And besides that, i wouldn't trust any 'chinese walls' that they may have, as we've seen in wall street, there's just too much money being made to really not bypass them.

That doesn't work though. If you go to client X and hint that client Y and client Z are doing something, client X isn't going to work with you because they know you give client strategies away.

Even if you just hint at it, they know and will think you will hint their stuff around. You won't be in business very long.

As for industry-specific trends, most of that stuff is learned not from specific engagements with clients, but from the teams of analysts and researchers the firms have that do polls and market research. They never get direct access to clients unless the client knows it's for research purposes (and is likely to get published).

True that Gupta did this at McK, but their business has taken a hit because of it. All of consulting depends on trust-based relationships.

 

[Phokus]

That doesn't work though. If you go to client X and hint that client Y and client Z are doing something, client X isn't going to work with you because they know you give client strategies away.

Even if you just hint at it, they know and will think you will hint their stuff around. You won't be in business very long.

As for industry-specific trends, most of that stuff is learned not from specific engagements with clients, but from the teams of analysts and researchers the firms have that do polls and market research. They never get direct access to clients unless the client knows it's for research purposes (and is likely to get published).

True that Gupta did this at McK, but their business has taken a hit because of it. All of consulting depends on trust-based relationships.

Actually i read an article a while back and i think they referenced Gupta and McKinsey and they basically said that's how the consulting industry works.

You just have to word your recommendations carefully. It's sort of a damned if you do, damned if you don't situation, because if you isolate yourself from those big consulting firms, you won't have enough knowledge about what the rest of the industry is doing, so even if there's a possibility of a conflict of interest, it makes sense to hire them.

 

[davmat787]

What part of the CEO also being the chairman of the board and also being stacking executive buddies from another company you are on a board of don't you quite understand.

Do i have to explain like you're five? I'm not sure i can break it down any further.

I am not arguing interlocking occurs, I have read examples of it before. However, of all the companies in the US that have CEO's, what percentage has a salary as a result of this interlocking problem? I have no idea, but I would guess the percentage is in the low single digits. Reading your comments, it seems like you think any and every CEO is guilty of this.

Anyone have any data on just how big, or little, of an issue this is?

 

[silverpig]

Actually i read an article a while back and i think they referenced Gupta and McKinsey and they basically said that's how the consulting industry works.

You just have to word your recommendations carefully. It's sort of a damned if you do, damned if you don't situation, because if you isolate yourself from those big consulting firms, you won't have enough knowledge about what the rest of the industry is doing, so even if there's a possibility of a conflict of interest, it makes sense to hire them.

For things that don't matter to strategy, sure.

If you run a big box retail chain and you call in a consulting firm to help you increase profits, they might notice you run payroll individually out of every store. They know from helping their clients that centralizing payroll saves a lot on costs. Their clients may be competitors of yours, or they may be in completely different industries in a different country.

Still, they can use the knowledge of how to centralize payroll while keeping everyone paid to help you. So in that respect, yes they share information from other clients, but they never get into specifics. They might get as specific as saying something like: "In our experience, companies of your size who do this save $X million dollars a year."

For high level strategy stuff like M&A work, that is a completely different story. Often times there are "clean rooms" set up where you can't bring anything in or out, and they have special clean laptops set up inside for you. As soon as your week on the case is done, the deal goes to the bankers to complete and there isn't time to blab to a competitor before it becomes public.

For stuff in between like "we know that the pre-packaged food industry is moving from sweet snacks to salty snacks", yeah some of that may come from client engagements, but they don't share anything that isn't otherwise publicly available.

I don't deny that there is potential for bad things to happen, and yes bad things do happen from time to time, but it isn't anywhere near close to the industry standard.

 

[werepossum]

I used to work as a field engineer for Lenovo here in the U.S. Say what you want about them being a Chinese company, but they employ a lot of people here in North America too. They spent $80 million building their corporate campus and U.S. HQ in North Carolina. They are a global company and we shouldn't forget that they employ many Americans in their day to day business.

True, but in general, American companies employ a higher percentage of Americans than do their foreign competitors. And I'm primarily concerned with the blue collar manufacturing jobs, which are generally the bulk of the wealth production. I'll pick a ChiCom company which manufactures in America over an American company which manufactures in Red China.

 

[Hayabusa Rider]

I'll change this around a bit. CEOs earn their compensation. If I cleaned the streets, was able to fix my pay by collusion with others in my situation, was effectively immune from market forces, did a bad job and was handsomely compensated when I screw up then get the same job elsewhere, was paid not based on merit and the majority of the stockholders has no real input, I'd earn my millions in wages as well.

The real issue is if I would merit what I earned by my performance. The answer would be no. That's too many American CEOs.

 

[werepossum]

I'll change this around a bit. CEOs earn their compensation. If I cleaned the streets, was able to fix my pay by collusion with others in my situation, was effectively immune from market forces, did a bad job and was handsomely compensated when I screw up then get the same job elsewhere, was paid not based on merit and the majority of the stockholders has no real input, I'd earn my millions in wages as well.

The real issue is if I would merit what I earned by my performance. The answer would be no. That's too many American CEOs.

There are definitely problems there. Right now you can tank the company and exercise your stock options for however millions your contract allows, because the options are written based on giving you a break on whatever is the current price. Then you're taxed on that gift as capital gains, as though your own money was risked, when all you did was file a bit of paperwork and get a check. That definitely ought to be fixed. For that matter, I think all dividends ought to be taxed as wage income. Lower capital gains rates ought to apply only to investments in real estate and such, or to long term stock profits from selling.

 

[WackyDan]

True, but in general, American companies employ a higher percentage of Americans than do their foreign competitors. And I'm primarily concerned with the blue collar manufacturing jobs, which are generally the bulk of the wealth production. I'll pick a ChiCom company which manufactures in America over an American company which manufactures in Red China.

I have news for you... IBM hadn't manufactured in the US for years before Lenovo purchased the PC division. Lenovo could have easily moved the bulk of US and global operations to China, but they left them in NC instead. They also opened a distribution and final assembly facility in NC... Something Dell doesn't even do anymore.

By the way... I saw a presentation to the state of NC once by Lenovo regarding impact to NC's economy... the average non executive wages are over $70k... So I'd say they are investing in the American worker. I have a lot of good friends that are still there and loving it.

Incidentally, I once had a customer bring up the human rights in china thing during a meeting. I asked them all to check the label on their underwear and tell me where it was made... There is an excellent book about how Lenovo was the first company in China to lobby the gov't to allow Lenovo employees private property ownership...

I now work for Big Blue... but I do miss Lenovo.

 

[MooseNSquirrel]

actually, you have market and capitalism backwards, in terms of which layer belongs to which.

And it came to pass that Saint Victor was taken from this place
to another place. Where he was lain to rest himself amongst sheets
of muslin and velvet.
"And there stroked was he by maidens of the Orient.
"For sixteen days and nights stroked they him, yea verily and
caressed him.
"His hair, ruffled they. And their fingers rubbethed they in oil
of olives, and ranneth them across all parts of his body for as much
as to soothe him.
"And the soles of his feet licked they. And the upper parts of
his thigh did they anoint with the balm of forbidden trees.
"And with the teeth of their mouths, nibbled they the pointed
bits at the top of his ears. Yea verily, and did their tongues
thereof make themselves acquainted with his most secret places.
"For fifteen days and nights did Victor withstand these maidens,
until he cried out, saying:
"'This...is fantastic! Oh...this is *terrific!!*'
"And the Lord did here the cry of Victor. And verily came He down
and slew the maidens. And caused their cottonwool buds to blow away,
and their Kleenex to be laid waste utterly.
"And Victor, in his anguish, cried out that the Lord was a rotten
bastard.
"So the Lord sent an angel to comfort Victor for the weekend.
"And entered they together the jaccuzzi."

Here endeth the lesson.