<sigh> McCain joins Obama in wanting to regulate CEO pay

[Craig234]

Originally posted by: lupi
Because of the related ancilliary issues that can be related to this, I wouldn't be opposed to some regulation that related top level salaries to some magnitude of the average employee salary.

But to simply set a level with no purpose I find a bit out there.

Of course, there are bad ways to 'fix' this problem, too that should be avoided.

The idea is for CEO's to be able to get fair compensation at levels which encourage them to produce, but to also close holes which allow them to counter-productively exploit for gain.

We should look for how to do that and not rehash the ideologies of 125 years ago.

We're pretty flexible. We're not saying there's any narrow 'approved compensation'. We're not saying that if a company loses money the CEO should not get well paid. There's a lot of room for flexibility. But we are saying that when there's a huge systemic problem draining our economy, that it should be looked at and fixed where we can.

We've got plenty of problems to address, including our system's excessive incentive for short-term gains for Wall Street at the expense of societal interests for long-term investment.

 

[Cattlegod]

what they really need to regulate is professional athlete pay and celebrity pay

 

[jman19]

Originally posted by: Queasy

Originally posted by: Atomic Playboy

Originally posted by: Queasy
Link -
eskimospy had been complaining that I hadn't started any anti-McCain posts. Fortunately for him, this article on McCain's stance regarding CEO pay that I vehemently disagree with just popped up and I would've likely posted it anyway.

McCain criticizes Obama for wanting to increase dividend and capital gains taxes and aiming to raise the minimum wage and link it to an index.

But he also takes aim at top corporate executives with big salaries and excessive severance packages.

"Americans are right to be offended when the extravagant salaries and severance deals of CEOs ... bear no relation to the success of the company or the wishes of shareholders," he will say, adding that some of those chief executives helped bring on the country's housing crisis and market troubles.

"If I am elected president, I intend to see that wrongdoing of this kind is called to account by federal prosecutors. And under my reforms, all aspects of a CEO's pay, including any severance arrangements, must be approved by shareholders," he will say.

OK, prosecuting CEOs who break the law is fine and dandy. However, no where should it be under the control of the federal government how much a person is allowed to make. These are private businesses. Let them sink or swim based on their own merits and decisions. Trying to inject the federal government here is a slippery slope IMHO.

"All aspects of a CEO's pay, including any severance arrangements, must be approved by shareholders." That statement doesn't have anything to do with the federal government. I realize that he also mentions federal prosecution, so I'm not accusing you of misreading the article, I'm just curious how you react to that proposed reformation?

If a company elected to let its shareholders do that on their own, that is fine. But you cut off the words before that statement, "under my reforms,". In other words, more government regulation.

Government regulation isn't necessarily a bad thing. Absolute free market purists live in a fantasy world.

 

[Craig234]

Originally posted by: Cattlegod
what they really need to regulate is professional athlete pay and celebrity pay

Actually, I disagree.

I'm 'anti sports'. I have no interest in almost any spectator sport save a few niches like the occasional boxing match, martial arts, or those G4TV Japanese shows.

I see them as a big waste of our society's resources, not just in money, but in people who should be getting informed on issues. I think they promote a trivialization of society as well.

But having said all that, they 'work' in terms of the marketplace, and I see no reason to cap the salary of the ballplayer making $100M, however offensively unjustified it may seem.

It's all working as intended - people are choosing to watch and pay, the players getting what they can from that income. While there is some corruption, IMO, with the owners' financing of stadiums and taxpayer incentives/subsidies, that's not the issue you raised. The bottom line is that I see no broken system regarding the players' salaries justifying any government involvement. While their compensation is high, it hardly impacts society.

CEO compensation on the other hand has significant systemic corruption issues, where the intended shareholder oversight, much less society's, seems all but absent in practice.

That's a system in which you can clearly see comparisons between the ratios of today's compensation and the historic levels and international levels, and link them easily to the corrupt systems now used. It's an issue ripe for the government to set the rules of the game to fix. And society does have some interest when its corporate productivity is harmed by too many resource going to CEP compensation for inappropriate reasons.

The people who will whine with slippery slope about the government going communist if they regulate are going to complain about a thousand other things already regulated.

 

[Stunt]

Interesting information with regards to CEO pay...
"In 2006, the 20 highest-paid European managers made an average of $12.5 million, only one third as much as the 20 highest-earning U.S. executives. The Europeans earned less, despite leading larger firms. On average, the 20 European firms with the highest-paid executives on the continent had sales of $65.5 billion, compared to $46.5 billion for the 20 U.S. firms. And yet these paychecks are still staggering by European standards."

3 times more pay on average for managing smaller firms and the European CEO's are unregulated.
For those who advocate no regulation and no corruption; how do you explain this huge discrepancy in pay.
It's not like Europe is cheaper to live or have smaller tax rates...

 

[Craig234]

Originally posted by: Stunt
Interesting information with regards to CEO pay...
"In 2006, the 20 highest-paid European managers made an average of $12.5 million, only one third as much as the 20 highest-earning U.S. executives. The Europeans earned less, despite leading larger firms. On average, the 20 European firms with the highest-paid executives on the continent had sales of $65.5 billion, compared to $46.5 billion for the 20 U.S. firms. And yet these paychecks are still staggering by European standards."

3 times more pay on average for managing smaller firms and the European CEO's are unregulated.
For those who advocate no regulation and no corruption; how do you explain this huge discrepancy in pay.
It's not like Europe is cheaper to live or have smaller tax rates...

You're exactly right. But I haven't seen anyone deny the 'corruption' issue, but rather only people who blindly follow ideology and oppose doing anything that will fix it.

In other words, to them, the actual compensation corruption is bad but they can ignore it and blame the 'lazy shareholders', while the government doing anything to fix it, they'll scream.