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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: AurumRabosa who wrote (67991)	9/21/1999 5:10:00 PM
From: Freedom Fighter	Read Replies (1) \| Respond to of 132070

Ron, There's really no real check and balance because the CEOs and other upper managers are often on each others' board. The only real check on compensation and options is the shareholders. But most direct shareholders really aren't paying attention and for some strange reason there isn't enough pressure from pension funds and mutual funds for a realistic accounting and fair compensation plan. It seems everyone is short term oriented. Wayne

To: AurumRabosa who wrote (67991)	9/21/1999 9:19:00 PM
From: Don Lloyd	Read Replies (5) \| Respond to of 132070

Ron - (...Did you see today that the new HWP CEO got $90 million in stock & options? It's a sin the ratio of compensation between executives and worker bees, there's no way on earth those people are worth that much to shareholders and directors are derelict in their duty for allowing it to happen.) With an HWP market cap of $100B and a stock price of $99.375, she will earn her compensation if she can increase the stock price by 0.09% or 9 cents per share per year as compared to someone with no compensation at all. Nothing is more important to a company than management, and the choice of a CEO can easily be the difference between stock appreciation of 1000's of percent and bankruptcy. From the stockholders' economic point of view, the CEO compensation is less than insignificant. What matters is that the choice be of someone who will enable the company to reach its competitive potential in its chosen lines of business and who is able to earn the confidence of Wall Street analysts and investors. The ratio of compensation argument for executives and line workers is nonsense. It is simply a result of political attempts to appeal to the human vice of envy and to try to further the ability of labor unions to extort wages that exceed the product value-added of the workers. The labor markets for line workers and CEOs are entirely separate and serve different purposes. If you restrict your arguments to the real misuse of corporate power by insiders to scratch each other's back and re-price options, I will not object. The hiring of an outside CEO at competitive rates is an entirely different matter. Regards, Don