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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (63868)	5/7/2003 9:07:04 AM
From: Stock Farmer	Read Replies (2) \| Respond to of 77400

Mindmeld, it's a tragedy of the commons situation. OK, the traffic on the expressway in the morning is awful. So bad we can't drive anywhere. And everybody knows it, and everybody complains about it. And everybody spends 2 hours in bumper-to-bumper traffic driving to work. They could fix it. All they have to do is avoid the road at peak times, them and everybody else. So why don't people who whine about it fix it? Because just getting off the road one's self doesn't really fix the problem. Not if you're the only one doing it. It just means (a) you're later for work, and (b) the guy behind you is 30 feet closer to his destination. You're better off hoping that the guy in front of you figures out the solution and benefiting from his generosity. Same with executive pay. The boards willing to pay the highest CEO Comp have a competitive advantage attracting top talent. No board can unilaterally reduce CEO pay. If they reduce too far, too fast, the talent that they need can move across the street where some less zealous board will be happy to pay him (and maybe give him a signing bonus too). And his commute might be shorter too! So before Buffett's board (or any other board, for that matter) can make a material reduction in CEO compensation, there has to be widespread support and recognition and a tacit understanding in industry. This is why we see extensive lobbying and political noise, months or years before substantive common reforms take place. John