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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: i-node who wrote (792489)	6/29/2014 8:18:50 PM
From: combjelly	1 Recommendation Recommended By tejek Read Replies (1) \| Respond to of 1576360

They're certainly not "unrelated". They are unrelated in that the companies with the best paid CEOs don't outperform CEOs who are paid substantially less. Often the companies with less compensated CEOs outperform companies with the "rockstar" CEOs. But the bottom line is it is no one's business but the BOD and their shareholders what a CEO is paid. 1) BOD members are often CEOs who sit on each others BOD. So there is a direct monetary incentive to keep the wage spiral going. 2) Most shareholders have no say in the compensation package. 3) Many times, the bulk of the CEO compensation package is warrants. The idea was that this would give incentives to CEOs and other management to maximize stock value. The problem is that it is pretty easy to game the system. In addition, it provides incentives to lay off critical people and even whole departments to a short term gain in profitability and long term detriment. Look what Fiorina did to that once great company, HP. This hurts the country because those warrants are taxed at a capital gains rate and not income, thus shifting the tax burden from those management people to the taxpayer. 4) To pay for the exercized warrants, there is often a stock buyback plan. These are not necessarily bad, but some companies do a lot of stock buyback, like Walmart. They buyback enough stock every year that it amounts to over $14k/year per employee. To maintain profits, they need to squeeze their employees harder. To do that, they cap raises, don't employ enough people to keep the shelves adequately stocked and engage in wage theft. Walmart is far from the only company that does this. So no, it isn't just between the BOD and the CEO. It directly involves the rest of the country. It is welfare for the 1%.