As a former employee of a worldwide company that provided salary surveys for executive compensation, I was disgusted over 15 years ago at the amount of money the top people made. It is the perfect situation, have relative standards based on equity comparison surveys, then make the deal based on the 'need' for great talent, and those guys with 'vision'. Run this by the lawyers first and then go for it! Of course the compensation levels can only go up and up in this scenario and you quote some very good references about this problem. But, it's not against the law or any standards that I know of and it hasn't been. So blame the execs if you want, but they are just exploiting a situation that exists and has been out of control for a long, long time. This is the same situation with the expensing of stock options, they are just exploiting a loophole in the tax code to their advantage, not breaking the law. Don't think that I think that either one of these things should be allowed, because I don't, but they aren't new either. I just wonder where all you outraged investors have been for the past 10 years.....Were you (the collective you) complaining about this when Cisco was $80 and kept splitting? These problems existed then, just as now, just as ten years ago. I realized way back then that I only had two choices in these matters: accept the rules of the game because I could not change them, or become an overpaid executive myself. My moral compass wouldn't let me become one of them, so I chose to play the game with their rules. I've made a lot of money on my original investment of 100 shares of Cisco back in 1995 by selling the splits when the price went up. I still have a few hundred shares and my cost is zero now. I'll keep them because regardless of the crappy rules of the game, even us poor investors can make money if we rebalance our portfolios and sell enough shares to get our original investment back. Don't get me wrong, I hope something is done about these problems, but I've been aware of them for a long time, and I think we may only get a band-aid fix. I will continue invest in the stock market and be glad for the crumbs the game gives me.
CMM |
