Government to cut Bailout Companies exec pay

[techs]

Originally posted by: mugs

Originally posted by: mugs

Originally posted by: techs
Boards of Directors determine executives salaries. And over the last 20 years corporations have managed to get the laws changed so executives have far more power in determining who is on the Board of Directors.
Hence, the huge salaries for executives.

Which laws are you referring to?

I'm actually curious here. I'm not calling you a liar, I would just like to read more about this.

Read the whole thread. Its in there.
However, its all over the web. Here's something to get you started:
http://www.corpgov.net/news/archives2006/january.html

In a New York Times interview, Nell Minow, chair of the Corporate Library, says boards are more independent of CEOs but are still failing at the pay challenge. She says CEO pay went up 30% last year but not their performance.

Boards and shareholders have failed to understand that bad CEO pay is a prime example of bad asset allocation. When asked why it isn't working when boards are independent and compensation committees hire their own outside consultants. Minow responds that there is no such a thing as independence on the board of directors as long as the CEO picks the directors. "When you have Warren Buffett admitting in his 2002 annual report that, as a director on other company's boards, he was often silent on proposals because it was embarrassing to speak up, you know that something is wrong with the system."

Minow says she doesn't "anticipate a time when shareholders are nominating their own directors, and I always expect that the CEO will be involved in having some say. But it's human nature, particularly for CEO's, who by their very chemistry are independent-minded and aggressive, to want to put cheerleaders on the board, not real partners." (The Case for Cutting the Chief's Paycheck, 1/29/2006)

 

[Blackjack200]

Originally posted by: spidey07
I'm concerned if this is even constitutional. I'm even more concerned that is just the start. Look back at Obama's statements during his campaign, look to comments from his Pay Czar. They don't want to dictate compensation just for bail out companies, executives or not - the end goal is to dictate compensation and control industry.

A fucking Pay Czar? Are you fucking kidding me? This is America you fucker.

Fuck you Barrack Hussein Obama. Fuck you.

Hey, I didn't realize that his middle name was Hussein. Wasn't that Saddam's last name? :roll:

Are you referring to statements he made to population angry at the financial industry and especially agitated about exective compensation at a time when massive layoffs were happening?

When did he say that he wants to dictate all compensation and control industry?

Originally posted by: shortylickens
Read an article in Readers Digest that once pissed me off.
A big, fat, dumb CEO got hold of a moderately successful company. He ran it straight into the ground. In addition to his horrid mismanagement, he also milked that place for everything it was worth. He was only getting paid 400,000 a year, but he racked up expenses to the tune of 600,000 a year (95% of which were actually his teeny-bopper wifes). He did that for a long time and then the board of directors finally voted and kicked his ass out.
When they fired him they gave the asshole a golden parachute of about 20 million dollars, all in a Swiss bank account.


I dont wanna sound like a communist but I am totally fine with the government regulating the paychecks of top-level executives.
EDIT:
Especially if they got taxpayer dollars just to stay in business.

I don't mean to pick on you shortylickens, but I honestly hope that people that believe this crap get to work in a Fortune 500 someday. Until you have first hand experience with individuals that have real executive managerial talent, it's hard to appreciate the intelligence, knowlege base, and communication abilities of a F500 exec.

If anyone thinks that corporate leadership is unimportant, or not worthy of a large salary, please work in a F500.

The picture that popular culture paints of executives: fat cats that are disconnected from the daily workings of their organizations, using lots of meaningless buzz words and promoting others based on nepotism and office politics is laughably far from the mark. Yes, there are a trajic few companies whose management is so bad that it becomes like this, and they are destroyed within a few years.

 

[IceBergSLiM]

good. If they took funds and haven't paid them back whether tarp funds or other govt programs that enabled them to make money or stay afloat then they should be subject to regulation until debts are paid. The government can garnish my wages if I don't pay them sso why should a company be exempt.

 

[Queasy]

USA Today

A Treasury Department watchdog is warning that a key $700 billion bailout program has damaged the government?s credibility, won?t earn taxpayers all their money back and has done little to change a culture of recklessness on Wall Street.

?The American people?s belief that the funds went into a black hole, or that there was a transfer of wealth from taxpayers to Wall Street, is one of the worst outcomes of this program, and that is the reputational damage to the government,? said Neil Barofsky, special inspector general of the Troubled Asset Relief Program (TARP), in an interview.

***

?We don?t even know where the money went,? says Rep. Daniel Lipinski, D-Ill., who recently called for TARP assistance to end in December, when it?s set to expire. The Treasury has the authority to extend the program until next October.

The report criticized Treasury?s implementation of the program and its lack of transparency, making 41 recommendations, 18 of which were implemented. Barofsky says it?s ?extremely unlikely? that taxpayers will recover the $77 billion committed to the ailing auto industry or the $60 billion in TARP assistance to American International Group as part of a pledge of up to $180 billion in aid. An additional $50 billion to modify unaffordable home mortgages ?will yield no direct return.?

Paycuts for those administering TARP!

 

[shortylickens]

Originally posted by: Blackjack200

Originally posted by: spidey07
I'm concerned if this is even constitutional. I'm even more concerned that is just the start. Look back at Obama's statements during his campaign, look to comments from his Pay Czar. They don't want to dictate compensation just for bail out companies, executives or not - the end goal is to dictate compensation and control industry.

A fucking Pay Czar? Are you fucking kidding me? This is America you fucker.

Fuck you Barrack Hussein Obama. Fuck you.

Hey, I didn't realize that his middle name was Hussein. Wasn't that Saddam's last name? :roll:

Are you referring to statements he made to population angry at the financial industry and especially agitated about exective compensation at a time when massive layoffs were happening?

When did he say that he wants to dictate all compensation and control industry?

Originally posted by: shortylickens
Read an article in Readers Digest that once pissed me off.
A big, fat, dumb CEO got hold of a moderately successful company. He ran it straight into the ground. In addition to his horrid mismanagement, he also milked that place for everything it was worth. He was only getting paid 400,000 a year, but he racked up expenses to the tune of 600,000 a year (95% of which were actually his teeny-bopper wifes). He did that for a long time and then the board of directors finally voted and kicked his ass out.
When they fired him they gave the asshole a golden parachute of about 20 million dollars, all in a Swiss bank account.


I dont wanna sound like a communist but I am totally fine with the government regulating the paychecks of top-level executives.
EDIT:
Especially if they got taxpayer dollars just to stay in business.

I don't mean to pick on you shortylickens, but I honestly hope that people that believe this crap get to work in a Fortune 500 someday. Until you have first hand experience with individuals that have real executive managerial talent, it's hard to appreciate the intelligence, knowlege base, and communication abilities of a F500 exec.

If anyone thinks that corporate leadership is unimportant, or not worthy of a large salary, please work in a F500.

The picture that popular culture paints of executives: fat cats that are disconnected from the daily workings of their organizations, using lots of meaningless buzz words and promoting others based on nepotism and office politics is laughably far from the mark. Yes, there are a trajic few companies whose management is so bad that it becomes like this, and they are destroyed within a few years.

I appreciate you not picking on me. I will do the same for you. (Normally a post like yours would be entitled to a serious flame fest.)
I had 9 years in the Navy and the 3 years after that in microchip factory and please believe me when I tell you I not only know the difference between good leadership and bad, I also apreciate it.
What I said was:
The guys salary was 400,000, yet he racked up expenses closer to 600,000 on the company ticket, most of which were for his spoiled trophy wife and had nothing to do with the company.
He almost ran the company into the ground entirely.
They took a vote and fired him.
When he left he got 20 million.

Please tell me how any of that is good leadership/management.
I promise you, in the service no one is even allowed to come close to fucking up that badly and then getting rewarded on top of it.
And I sincerely hope you are not using the argument "you cant talk about it until you do it" because that was long ago established as a logical fallacy. Also, I cant agree with your "few tragic" comment because too many companies have actually done it over the years. And now my tax dollars are supporting them.

Thank you very much for your kindness & patience and I wish more people on the forums were like you.

 

[mugs]

Originally posted by: techs

Originally posted by: mugs

Originally posted by: mugs

Originally posted by: techs
Boards of Directors determine executives salaries. And over the last 20 years corporations have managed to get the laws changed so executives have far more power in determining who is on the Board of Directors.
Hence, the huge salaries for executives.

Which laws are you referring to?

I'm actually curious here. I'm not calling you a liar, I would just like to read more about this.

Read the whole thread. Its in there.
However, its all over the web. Here's something to get you started:
http://www.corpgov.net/news/archives2006/january.html

In a New York Times interview, Nell Minow, chair of the Corporate Library, says boards are more independent of CEOs but are still failing at the pay challenge. She says CEO pay went up 30% last year but not their performance.

Boards and shareholders have failed to understand that bad CEO pay is a prime example of bad asset allocation. When asked why it isn't working when boards are independent and compensation committees hire their own outside consultants. Minow responds that there is no such a thing as independence on the board of directors as long as the CEO picks the directors. "When you have Warren Buffett admitting in his 2002 annual report that, as a director on other company's boards, he was often silent on proposals because it was embarrassing to speak up, you know that something is wrong with the system."

Minow says she doesn't "anticipate a time when shareholders are nominating their own directors, and I always expect that the CEO will be involved in having some say. But it's human nature, particularly for CEO's, who by their very chemistry are independent-minded and aggressive, to want to put cheerleaders on the board, not real partners." (The Case for Cutting the Chief's Paycheck, 1/29/2006)

My question was "Which laws are you referring to?"

 

[thatguy82]

Originally posted by: JS80
I hope they all quit to either prove/disprove top gun executive = successful business.

this

 

[thatguy82]

Originally posted by: Lonyo
It's a bit unfair in some ways, because it should have been part of the conditions of the bailout. Doing it now in some ways seems a little vindictive, but not unjustified, I do agree with it, I just think it should have been an element of the bailouts in the first place.

Also since the Gov now has a stake in these companies it has the right to demand that it gets repaid what it's put in, and cutting company costs through wage reduction is a reasonable method of doing that.

Also I think that the only form of compensation should be performance related. If the company fails to do well, then the execs don't get much.

well if they didn't take the money they would've been bankrupt, they can give the money back now and go bankrupt if they like.

 

[zinfamous]

Originally posted by: techs
Everyone misses the point.

Executive salaries are not determined by supply and demand. They are determined by the rules that govern the makeup and responsibilites of corporations Boards of Directors.
The whole concept of the "corporation" is a socialist idea that in order to promote businesses they should have special protections, like stockholders not being responsible for the companies debt, etc.

Boards of Directors determine executives salaries. And over the last 20 years corporations have managed to get the laws changed so executives have far more power in determining who is on the Board of Directors.
Hence, the huge salaries for executives.

What really needs to be changed is the way the laws for corporations work, cutting off the ability of corporate executives to, in effect hire the people who determine their salaries.

not to mention that many of the chairs in the BoDs are held by individuals without any shares in said company--hence no individual stake in the success of said company. Just one tiny piece of the clusterfuck that was inevitable from the rampant de-regulation that began with Regan, was encouraged by Clinton, ignored by Bush, etc. Pretty much everyone seems to be responsible, mostly b/c they trusted the "knowledge" of a select few individuals, who would essentially claim to not really know what was actually going on: Greenspan

 

[zinfamous]

Originally posted by: spidey07
I'm concerned if this is even constitutional. I'm even more concerned that is just the start. Look back at Obama's statements during his campaign, look to comments from his Pay Czar. They don't want to dictate compensation just for bail out companies, executives or not - the end goal is to dictate compensation and control industry.

A fucking Pay Czar? Are you fucking kidding me? This is America you fucker.

Fuck you Barrack Hussein Obama. Fuck you.

lolwut

 

[her209]

Originally posted by: thatguy82

Originally posted by: Lonyo
It's a bit unfair in some ways, because it should have been part of the conditions of the bailout. Doing it now in some ways seems a little vindictive, but not unjustified, I do agree with it, I just think it should have been an element of the bailouts in the first place.

Also since the Gov now has a stake in these companies it has the right to demand that it gets repaid what it's put in, and cutting company costs through wage reduction is a reasonable method of doing that.

Also I think that the only form of compensation should be performance related. If the company fails to do well, then the execs don't get much.

well if they didn't take the money they would've been bankrupt, they can give the money back now and go bankrupt if they like.

Hmmm.... what would happen if a Bank of America went bankrupt? Hmmm....

 

[thatguy82]

Originally posted by: Queasy
All the execs of these companies will probably leave for other companies at the first opportunity now and these companies will then have problems finding people to take their place...

i'm curious if this will happen. A lot think the ones at the top are lucky or are only good at corporate politics....not running a company better than others around them.

 

[Phokus]

If you want to see the amount of corruption there is between CEO's and who decides how much they're compensated, look no further than this Angelo Mozillo:

http://www.usatoday.com/money/...ntrywide--mozilo_N.htm

Countrywide's hires a compensation consultant to figure out how much he should be paid in a new contract, and the consultant figures the performance targets in Mozillo's current contract are too easy to meet and thinks his pay should more match performance. Mozillo doesn't like it and hires his OWN compensation consultant (on the company's dime even) and they get his pay raised over what was initially suggested by the other consultant.

Mozilo responds: "I appreciate your input. ? Boards have been placed under enormous pressure by the left-wing anti-business press and the envious leaders of unions and other so-called CEO Comp Watchers, and therefore Boards are being forced to protect themselves irrespective of the potential negative long-term impact on public companies."

Yeah, how dare someone hold CEO pay accountable and keep it in line with how the company performs. Fuck meritocracy!

Dear Spidey07: Fuck you and your attempts to destroy this country.

 

[thatguy82]

Originally posted by: Leros

Originally posted by: HardcoreRobot
if we want to spend money, why not pump it into proven, established companies. they can gobble up the useful capital of the failures. same net money going into the industry, except you are betting on a winner instead of a PROVEN loser. (i dont actually advocate this, but it sure makes a lot more sense to me than propping up failed businesses)

I couldn't agree more. Sure things would be rough for a lot of people, but change isn't easy.

same here, completely agree

 

[Gothgar]

oh yeah... those super successful bailouts.... how are those going again?

 

[zinfamous]

Originally posted by: spidey07

Originally posted by: Regs

Originally posted by: spidey07
I'm concerned if this is even constitutional. I'm even more concerned that is just the start. Look back at Obama's statements during his campaign, look to comments from his Pay Czar. They don't want to dictate compensation just for bail out companies, executives or not - the end goal is to dictate compensation and control industry.

A fucking Pay Czar? Are you fucking kidding me? This is America you fucker.

Fuck you Barrack Hussein Obama. Fuck you.

I would like to take you out to a bar one day.

And I you. Meh, I can't tell if you're being sarcastic or not because I'm apparently the bad guy on this board. No matter.

Ponder this - when is one going to care about government dictating one's compensation? When it affects them? When if affects their boss? When it affects their business? To where does this price fixing on one's labor lead?

FBHO.

I think when you fuck up enough and have put yourself in the position to demand a bailout: AIG, Goldman's, et al, then you really have no choice. Thing is, they didn't really need to demand it as many of these companies were allowed to be in the positions where they controlled so much fucking money (derivatives market alone was worth what, ~$120 TRILLION by 2006) that they couldn't not be bailed out. Don't plug the hole and watch the entire world economy melt away, millions upon millions more homeless, jobless, whatever. Plug the gaps and deal with the nutballs screaming gov't takeover my god!

the previous Admin believed exactly what the current Admin believes when it comes to doing what had to be done. Bush already did it. To claim otherwise is simply ignorant.

 

[thatguy82]

Originally posted by: techs
Everyone misses the point.

Executive salaries are not determined by supply and demand. They are determined by the rules that govern the makeup and responsibilites of corporations Boards of Directors.
The whole concept of the "corporation" is a socialist idea that in order to promote businesses they should have special protections, like stockholders not being responsible for the companies debt, etc.

Boards of Directors determine executives salaries. And over the last 20 years corporations have managed to get the laws changed so executives have far more power in determining who is on the Board of Directors.
Hence, the huge salaries for executives.

What really needs to be changed is the way the laws for corporations work, cutting off the ability of corporate executives to, in effect hire the people who determine their salaries.

there's a huge conflict of interest between the board setting the exec pay and the exec choosing the board, that's one of the main reasons they get paid so much, not because they're geniuses

 

[zinfamous]

Originally posted by: techs

Originally posted by: Queasy

Originally posted by: alkemyst
The new news is the government is looking to assist INVESTORS and SECOND HOME owners with their mortgages now.

Seems if you have money you can't lose in our system.

That's the problem. The government has gotten into the business of rewarding failure and punishing the successful.

No, the government is trying to prevent an economic collapse caused by the 28 years of Republican & Democratic deregulation.

Keep up.

fixed

 

[Queasy]

Originally posted by: Phokus
If you want to see the amount of corruption there is between CEO's and who decides how much they're compensated, look no further than this Angelo Mozillo:

http://www.usatoday.com/money/...ntrywide--mozilo_N.htm

Countrywide's hires a compensation consultant to figure out how much he should be paid in a new contract, and the consultant figures the performance targets in Mozillo's current contract are too easy to meet and thinks his pay should more match performance. Mozillo doesn't like it and hires his OWN compensation consultant (on the company's dime even) and they get his pay raised over what was initially suggested by the other consultant.

Mozilo responds: "I appreciate your input. ? Boards have been placed under enormous pressure by the left-wing anti-business press and the envious leaders of unions and other so-called CEO Comp Watchers, and therefore Boards are being forced to protect themselves irrespective of the potential negative long-term impact on public companies."

Yeah, how dare someone hold CEO pay accountable and keep it in line with how the company performs. Fuck meritocracy!

Dear Spidey07: Fuck you and your attempts to destroy this country.

Maybe you should be saving your fuck yous to corrupt politicians like Chris Dodd (D - Countrywide) who knowingly got into bed with Mozilo under the "Friends of Angelo" program where he got below market mortgages in exchange for covering for Countrywide. Dodd is one of the ranking members of the Senate Banking Committee (currently chairs it) that oversaw the collapse of the financial industry.

 

[thatguy82]

Originally posted by: techs

Originally posted by: Zeppelin2282

Originally posted by: spidey07

Originally posted by: Regs

Originally posted by: spidey07
I'm concerned if this is even constitutional. I'm even more concerned that is just the start. Look back at Obama's statements during his campaign, look to comments from his Pay Czar. They don't want to dictate compensation just for bail out companies, executives or not - the end goal is to dictate compensation and control industry.

A fucking Pay Czar? Are you fucking kidding me? This is America you fucker.

Fuck you Barrack Hussein Obama. Fuck you.

I would like to take you out to a bar one day.

And I you. Meh, I can't tell if you're being sarcastic or not because I'm apparently the bad guy on this board. No matter.

Ponder this - when is one going to care about government dictating one's compensation? When it affects them? When if affects their boss? When it affects their business? To where does this price fixing on one's labor lead?

FBHO.

They cried to our government to bail them out. They knew damn right what could possibly happen once they allowed our government to step in.

These execs are still going to be ridiculously wealthy...hell even at a 75% pay cut they would still have more money than 99% of us.

No one likes you here Spidey because your posts seemed to be generated by Fox news. All emotion, no facts.

I seriously believe Spidey gets ALL his news from Fox and believes it all to be true.
He doesn't understand the most simple, basic facts of corporations. The only place he could get such a ridiculous view from is Fox.

they key fact that the corps weren't forced to take the money is missing from Spidey's view

 

[zinfamous]

Originally posted by: mugs

Originally posted by: mugs

Originally posted by: techs
Boards of Directors determine executives salaries. And over the last 20 years corporations have managed to get the laws changed so executives have far more power in determining who is on the Board of Directors.
Hence, the huge salaries for executives.

Which laws are you referring to?

I'm actually curious here. I'm not calling you a liar, I would just like to read more about this.

I believe there are no laws now....which is kind of the point? hehe.

 

[thatguy82]

Originally posted by: Queasy

Originally posted by: Regs

Originally posted by: Farang
I did read this story but I must have missed this part. What I am wondering is what exactly gives the administration the authority to make these cuts? The way it is reported is seems like they can do it on a whim.

Because the executives took a bail out instead of flushing the company down the toilet. They are now in service with the government.

The problem with this line of thinking is that some financial institutions were forced to take the TARP money under the Bush administration by Paulson (Geithner was there as well) whether they wanted it or not. And at one point, the Obama administration refused to take TARP paybacks until later this past summer.

Any word on whether or not the executive pay at Fannie Mae and Freddie Mac will be cut along with this? How about a pay cut for any of the politicians that tried to cover for these corporations while racking up the lobbyist dollars?

jpm and goldman sachs paid back their money and are not longer under such salary restrictions, the other corps just need to pay their money back or stfu

 

[Queasy]

Originally posted by: thatguy82

Originally posted by: Queasy

Originally posted by: Regs

Originally posted by: Farang
I did read this story but I must have missed this part. What I am wondering is what exactly gives the administration the authority to make these cuts? The way it is reported is seems like they can do it on a whim.

Because the executives took a bail out instead of flushing the company down the toilet. They are now in service with the government.

The problem with this line of thinking is that some financial institutions were forced to take the TARP money under the Bush administration by Paulson (Geithner was there as well) whether they wanted it or not. And at one point, the Obama administration refused to take TARP paybacks until later this past summer.

Any word on whether or not the executive pay at Fannie Mae and Freddie Mac will be cut along with this? How about a pay cut for any of the politicians that tried to cover for these corporations while racking up the lobbyist dollars?

jpm and goldman sachs paid back their money and are not longer under such salary restrictions, the other corps just need to pay their money back or stfu

JPM and Goldman Sachs didn't really need to take the TARP money at the time the government forced them to take it. So, it was easier for them to pay the money back. They were trying to pay the money back earlier this year but the feds wouldn't let them.

And what about Bank of America? Not only were they pressured by the feds into taking the TARP money when they didn't need it but they were pressured into buying Merril Lynch which is pretty much the cause of BofA's current financial troubles.

 

[Phokus]

Originally posted by: Queasy

Originally posted by: Phokus
If you want to see the amount of corruption there is between CEO's and who decides how much they're compensated, look no further than this Angelo Mozillo:

http://www.usatoday.com/money/...ntrywide--mozilo_N.htm

Countrywide's hires a compensation consultant to figure out how much he should be paid in a new contract, and the consultant figures the performance targets in Mozillo's current contract are too easy to meet and thinks his pay should more match performance. Mozillo doesn't like it and hires his OWN compensation consultant (on the company's dime even) and they get his pay raised over what was initially suggested by the other consultant.

Mozilo responds: "I appreciate your input. ? Boards have been placed under enormous pressure by the left-wing anti-business press and the envious leaders of unions and other so-called CEO Comp Watchers, and therefore Boards are being forced to protect themselves irrespective of the potential negative long-term impact on public companies."

Yeah, how dare someone hold CEO pay accountable and keep it in line with how the company performs. Fuck meritocracy!

Dear Spidey07: Fuck you and your attempts to destroy this country.

Maybe you should be saving your fuck yous to corrupt politicians like Chris Dodd (D - Countrywide) who knowingly got into bed with Mozilo under the "Friends of Angelo" program where he got below market mortgages in exchange for covering for Countrywide. Dodd is one of the ranking members of the Senate Banking Committee (currently chairs it) that oversaw the collapse of the financial industry.

And this has what to do with Mozillo's compensation? Did Dodd intervene with the corporate board on Mozillo's behalf? If not, then you're talking out of your ass. This has everything to do with a broken free market system were MOST Ceo's are in bed with the board of directors and get to influence the compensation they get.

What you posted has NOTHING to do with what i posted and you're basically just noise.

Edit: oh and queasy, before you post such nonsense, read this:

http://www.boston.com/news/pol...8/dodd_cleared_in.html

 

[Parasitic]

It's time we start enforcing more restrictions. Maybe not nationalizing banks but those receiving bailout money need to be more fiscally responsible.