Originally posted by: oogabooga
Originally posted by: LegendKiller
I am sure some people are going to justify it, just like they did with other CEOs, yet under this guy's leadership HD stock has languished.
It's funny that no matter how good or bad a big CEO is, he still gets paid like a king while the peons get paid like serfs.
If he's good he gets paid like a king for bringing the $$$
If he's bad he gets paid like a king... to leave?
It's amazing the market value CEO's have...
No, it's not amazing, it's shameful.
CEO's aren't paid like regular people. They aren't paid market wages, they are paid fixed wages by fellow buddies on cross-linked compensation boards. Other CEOs sit on those boards, voting in pay raises for each other so that their buddies will scratch their backs.
Stockholders have no power because the vast majority of most company's stocks are held by mutual funds or other institutions. These funds vote by proxy for usually around 70% of all publicly held stock. Amazingly, most fund managers either work for banks or used to be bankers, or know many. They send business to the bankers, who often grease the wheels for them. If they work for a bank they often are buddies with the CEO, because banks love to get bond offering, IPO, stock offering, M&A, or other investment bank fees. What's even funnier is that while mutual fund managers help banks make larger profits through buddy systems they also bilk investor's money by charging high fees or churning fund portfolios.
They then get soft-dollars or "IOU's" from banker brokers, who then pay for overhead of the company. That soft-dollar cost is passed to investors in mutual funds, but it lowers the overhead of the actual companies, equaling more profits and higher paychecks for fund managers and fund company CEOS.
The whole think is a massive circle-jerk of high paying and interlocked elites who do nothing but spend average worker's money. The real shame is that people think that it's a free-market capitalist way of doing business. Little do they realize that it's nothing but a wealth distribution system intended to suck money from the buttom and put it at the top.
Even more think that by lowering taxes of the wealthy it encourages "trickle-down" economics, but in reality it just allows more wealth retention by the higher ups. Further redistribution downwards is now limited by elimination of the estate tax. Thus, wealth sucked from the bottom stays at the top, creating a larger elite class while the lowers are sucked dry.
I see it every day as I work in corporate America. I am not some anti-establishment hippie, but I am a realist and those that ignore aggregious CEO pay are doomed to be sucked dry.
It used to be that CEOs made a lower multiple of the lower paid workers and got reimbursed for awesome performance and stayed level for mediocre or poor performance. Now, they get paid high no matter what, even if they sucked and wasted stockholder wealth.
It's quite sad actually, that people now congratulate them for mediocrity.