Comments on: U.S. CEOs Could Learn From Their Asian Counterparts

By: Banks That Got $188 Billion in Bailout Money This Year Paid Out $1.6 Billion to Top Execs Last Year

Tue, 27 Jan 2009 18:18:25 +0000

[...] when virtually the entire sector needs bailing out [Check out this related story on the growing U.S. CEO pay controversy that appears elsewhere in today’s issue of Money [...]

By: Searcher

Searcher — Sun, 28 Dec 2008 16:29:54 +0000

I am usually very uncomfortable with any position that smacks of populism. However, the marginal value to a highly paid executive of that extra 10(100!) million is merely score keeping. They expect the largesse and the BOD expects them to be unfavorably motivated if their value relative to their peer executives is diminished. These expectations are now in the process of being ratcheted down. Those formerly rudderless proxy 'owners' must step up and enforce realistic expectations by persistent pressure on all BOD's for an entire generation to come.

By: Dale Mahlum

Dale Mahlum — Fri, 26 Dec 2008 19:35:51 +0000

I do not believe any CEO is worth more than 1 million a year in pay—bonus's can be paid if the company makes money, but bonus money cannot exceed yearly pay. The BofD have become too cozy with oneanother , and letting the CEO have these large salaries is just criminal and they should be punished.

By: Ruby Schwanke

Ruby Schwanke — Thu, 25 Dec 2008 03:36:36 +0000

Chryler and those other corporations should not be getting taxpayer money unless the big Executives, etc start taking a big pay cut with no Bonus. It is about time the taxpayers lay down some hard facts to these Rich People who want to live high on taxpayer money. Thanks

By: Jutia Group - Market Jitters & Political Critters

Jutia Group - Market Jitters & Political Critters — Wed, 24 Dec 2008 15:18:28 +0000

[...] Keith Fitz-Gerald Money Morning addthis_pub = 'jutiagroup'; addthis_logo = 'http://www.jutiagroup.com/favicon.ico'; addthis_brand [...]

By: theceodaily.com» Morning Update » December 24, 2008

theceodaily.com» Morning Update » December 24, 2008 — Wed, 24 Dec 2008 12:13:33 +0000

[...] Warren Buffett – USA Today CEO says Chrysler turnaround plan "achievable" – Reuters US CEOs could learn from their Asian counterparts – Money Morning Redbox CEO says company will continue innovating – Home Media Magazine Magazine: [...]

By: Nintendo DS Lite

Nintendo DS Lite — Wed, 24 Dec 2008 05:32:27 +0000

CEOs in China should keep tradition rather than follow USA.

By: s c sekar

s c sekar — Wed, 24 Dec 2008 05:15:56 +0000

Sir,
It is great and knowledgeable. This is all come out when the days are not great. We dont say anything if the results of the companies are good. Now each should save when the company earns profit and invest the same when they dont do good. Indian companies are doing the same. This will save them when the whole world face trouble.

Any how it nice to know about others.
s c sekar

By: malcolm rollinson

malcolm rollinson — Wed, 24 Dec 2008 05:15:20 +0000

In 60 years of investing , I conclude that there are 2 kinds of C.E.O's and directors. The greedy and the greedier.

By: Paul Coote

Paul Coote — Wed, 24 Dec 2008 03:54:28 +0000

The problem is not how much these CEOs earn. It is rather what value you bring to your company. So, a CEO can always earn $50 Million per year, as long as he or she is generating revenue amounting to at least ten times that $50 million. The Capitalist System was designed to reward those who are innovative and hardworking. It was not meant for a bunch of parasites who think the world earn them a living. Good Corporate Governance is absent from many Corporations, both public and private. They are replaced by greed and rampant corruption. It cannot be business as usual. If the captain of these Corporations cannot run their businesses, then someone else is going to run it for them. When the dust finally settles, we will be faced with one gigantic predicament. That is, whether to sell off these iconic corporations to foreigners; and when I say foreigners I mean the Chinese, Middle- east, Asians; or to allow this great bastion of capitalism to metamorphose into State Capitalism. The Corporate landscape of America is about to change its face, defeated by the underbelly of the very system that was designed to be just and equitable.

By: WARREN P. FREED,CPA

WARREN P. FREED,CPA — Tue, 23 Dec 2008 19:17:07 +0000

These bums should remind themselves that to enter paradise will be like a camel passing through the eye of a needle. Even worse is that these same leaders turned their heads to the fraudulent practices taking place by the Ivy League grads on Wall Street. What with their development of practically worthless packaged deals, CDO's, CDS's and other acronyms. And being paid obscene salaries and bonuses and now outside our law in their Hampton mansion and large bank account free from the market freefall.

By: Bill White

Bill White — Tue, 23 Dec 2008 17:34:56 +0000

There are two types of CEOs. The first is the man or woman who has to wear all of the hats and pushes a dream into reality, working late into the evening 7 days a week and deserves the compensation he or she gets. In truth, much like the sales executive, the salary is commensurate with the performance.

On the other hand, the CEO who steps into to run the company in its mid to mature growth, systems in place, marketing churning in the prospective customers rarely ever gets a salary tied to a specified outcome.

Herein lies the problem. I have no problem with an exec making 75 million a year if he pushed his companies profit up by twice that. The expertise and mastery of their market would gladly command such a fee. However, for a CEO to bleed a company of profits at the expense of their customers and shareholders then brazenly seek assistance from the government (which we all know means our pocketbooks) is double dipping the system and stepping into the rabbit hole of deceipt.

Free enterprise means you are free to succeed or free to fail, but with this right comes the responsibility to manage with fiduciary responsibility.

And for the shareholders, I can understand the desire to grow security and wealth, the right to seek happiness is woven into the American tapestry and in our market we should encourage that. But I must ask you, can any amount of money actually wash away the sins of profiting without care for ethics? Can you truly sleep well each night knowing your profit cost 30,000 jobs? If you can, then sleep well now while you're alive to do so, because I suspect that your sleep may not be as peaceful when it's time to transition into the next world.

The behaviours we are seeing in the elitist components of modern commerce ought to go back and read about the French Revolution, there are many among us growing ready to bring out the guillotines.

The problem is simple, we were once a nation who built the archetype of our leadership based on the hero/king, but somewhere in the last several decades we have thrown the hero to the minotaur and taken the villian as our guide.

Perhaps you find evil shrouded in more glitter.

This is a time of great opportunity, but it comes only from growing pains. The leadership who can stand up today and run a company with true integrity; sacrifice the occassional profit to show greater humanity to your workers and to your consumers; this will be the leadership who will grow in the decades to come. For those who would rise to this challenge, know, you will have to live it, not just talk it…thinly disguised veils of eco-friendliness and denim Fridays won't do anymore.

By: Chris Hahin

Chris Hahin — Tue, 23 Dec 2008 16:58:15 +0000

I have filed proxy proposals in the past to limit executive compensation only to find that the SEC previously considered pay and stock options as an "ordinary business decision" not subject to stockholder approval. The other startling fact was that other stockholders had literally filed hundreds of similar proposals. That rule was changed to making the stockholder proposals "advisory". Therefore, even if the stockholders overwhelmingly approve pay and compensation reductions for a failing executive, the corporate board can simply set the stockholder intentions aside. Every stockholder proposal I have ever seen always is described by these boards as "not in the best interests of the corporation", and the actual proposal is annotated with the note: "management suggests you vote no on this proposal". This is equivalent to going into the voting booth where individual candidates have "yes" and "no" listed next to their names. The stockholder voting process is not corporate democracy, it is corporate dictatorship.

By: Josh Armstrong

Josh Armstrong — Tue, 23 Dec 2008 15:45:19 +0000

I think the biggest problem(s) lie not only with the CEO's but the greedy stockholders and board of directors. They want to make money fast, and line their own pockets first. But that never seems to enough with them it is always more, more, more. So they get the CEO that puts more of a show towards fast earnings. They are not realizing that it takes employees who are dedicated to make the company grow, and a giving back to the people, taking responsibility for their actions and actually doing some work in the end.

By: John Lounsbury

John Lounsbury — Tue, 23 Dec 2008 15:23:31 +0000

I have proposed that any compensation over approximately $1M per year (about 20X median family income) should be deferred and payable only after 10 years deferral. The a ultimate pay-out should be linked to company performance over the ten years, with the later years getting modestly more emphasis than the earlier years. The deferred amount would be be reduced if the executive did not stay with the company to the deferred payment year.

Even with this formula, the maximum compensation needs to be limited below some of the extreme amounts that have been occurring over the past 2-3 decades.

All of these reforms are in the domain of boards of directors and will not happen until the incestuous control of boards is changed.

By: Thomas

Thomas — Tue, 23 Dec 2008 15:20:22 +0000

I agree with the general concept of the article. CEOs do get paid too much.

However, it's obvious that the surveys you are looking at include stock and option based compensation. This skews the discrepancy for more shock value.

But this compensation, especially in times like these, is worth $0. Richard Fairbank's, the CEO of COF, salary is actually $0. Fifteen years ago, when COF was spun off as a public company, he decided to take no salary and only be paid in stock options. If he's willing to take a risk like that, more power to him. He deserves what he gets, good or bad.

Do CEOs get too many stock options? Sure, many do. But that practice has also been reigned in from the excesses of the late 1990s.

Anyway, there's definitely too much camaradeie in the board room, where most board members are hand picked by management and are essentially a rubber stamp for whatever the CEO wants to do. That's the fault of investors. Many CEOs are just playing this system to their full advantage, which is a shame and, I'm guessing, will soon become a crime.

By: R Tauss

R Tauss — Tue, 23 Dec 2008 15:17:56 +0000

The heart of the problem is an ideology that has permeated U.S. corporations, media, and government. When Sen. Corker et. al. were demanding that auto workers cut their pay to that of Japanese companies, where were the accompanying demands that auto company CEO's cut their pay to that of Japanese auto CEO's?

By: M. Sloane

M. Sloane — Tue, 23 Dec 2008 14:51:28 +0000

Excuse Me, How many times have I seen a CEO of a major corporation being introduced as CEO and Chairman of the Board. That's right, Chairman of the Board who stuffs HIS/HER board with members who are friendly to HIM/HER. Therefore, the CEO gets whatever he wants.

I call this Crony Capitalism. In fact, I have changed the Kudlow Creed to read: "We believe Crony Capitalism is the best path to our Prosperity!"

By: Garry

Garry — Tue, 23 Dec 2008 14:25:18 +0000

I believe the "real" problem is the stockholders who have no idea how the company they invested in is conducting business.
But this problem is being worked out as investors become aware of the need to know what is happening with their money.
Also, as a retiree living on a very modest income, I don't blame CEO's who were smart enough to get paid well when they had the chance. They were paying attention when others weren't.

By: Daduce

Daduce — Tue, 23 Dec 2008 13:45:02 +0000

Bingo ! They agreed to the deals with their respective CEOs, CFO's, they (the boards of dir) sucked their corporations dry – now they can shoulder the mess as far as we Joe & Suzie SixPacks are concerned.

By: H Therrien

H Therrien — Tue, 23 Dec 2008 13:18:38 +0000

The real problem with CEO pay scales lies with the incompetent Board of Directors who hire the CEOs and agree to whatever pay they ask for.

The Board of Directors makes the decision. If they are dumb enough to pay $10 million+ why not ask for it as a CEO.

Clearly they don't have enough imagination or IQ to figure out a system that makes sense.

The real problem is the incompetent Board members.