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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 76.04-0.3%3:59 PM EST
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To: RetiredNow who wrote (63797)5/4/2003 10:34:40 AM
From: Don Lloyd  Read Replies (1) of 77400
 
mindmeld,

Hi all, I've been complaining about CEO pay for a long time. A little while ago I posted about how I was becoming more socialist as I got older, in part because of my disgust over the huge discrepancy between the executives of a company and the line managers and staff. My feeling was that executives are grossly overpaid in this country. I mean at what point does money no longer become and incentive, especially when you are earning millions a year?
Anyway, Buffet seems to think the same thing, which makes me think I'm on the right track:
siliconinvestor.com.

The real question is whether someone would justified in being more or less likely to invest in Cisco stock if you and WB were to become the sole arbiters of Cisco wage and salary levels, noting the extreme confidence that both of you have in your own expertise in this area.

CEO pay has little to do with incentives and much to do with the market for CEOs. Choosing or rejecting a CEO on the basis of compensation alone runs the extreme risk of future business and stock underperformance by orders of magnitude. With the choice of CEO so critical, rejecting the highest ranked CEO candidate simply because his market value is more than 50X the wage of the line worker, for example, is so absurd as to be a violation of fiduciary responsibility itself, no matter how overpaid CEOs in general may actually be.

Regards, Don
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