You're diluting the argument down to the point where it is meaningless. Yes, they both do stuff to get paid.
Those shares could have been sold on open market with proceeds distributed to shareholders instead of given to that guy. That's the opportunity cost to shareholders from this guy's compensation package.
Not just "do stuff"... abuse the power they have.
So the company was going to issue equity, then turn around and give the proceeds to the equity holders?
Now you're trying to sound stupid...
Geez, I'm an owner of this stock and I didn't authorize this outragoeus salary! Someone point me to his boss so we can have a talk...
So you admit the CEO in the OP is abusing his power.
I'm saying (as I have throughout the thread) that CEOs who appoint yes-men to boards and receive, as a result, more compensation than they otherwise would are abusing their power. That's not necessarily what happened at the company mentioned in the OP.
Those shares could have been sold on open market with proceeds distributed to shareholders instead of given to that guy. That's the opportunity cost to shareholders from this guy's compensation package.
No, what you have said throughout the thread is this argument also applies to unions.
Unions do not appoint yes-men to the employers' negotiating teams to receive more compensation.
Unions negotiate as a block to receive more compensation.
The method used is ENTIRELY different, and the result differs by orders of magnitude.
Unions don't abuse their power because there is a check on that power, that being the independent employer who can choose to do whatever they want. SOME CEOs abuse their power by completely eliminating that check.
2% to 2.5% is not negligible.
Net income for the past year for his company was ~$1.6 billion. He may have 0.05% of total revenue, but he's also got 10% of net income.
Thats one way it COULD have been done. But neither you nor I know how the dilution was structured. Bottom line.
Holy Math Fail Batman! You're off by an order of magnitude.
Opportunity cost, look it up.
I suggest you read every post of mine in this thread, not just the ones you've chosen to reply to. You'll see why you're completely wrong about what I've been saying throughout this thread.
That argument could also apply to unions in the sense that they provide their members with a lot of influence over their own pay.It's not actually a complete fail. One of the issues that the OWS people (should) have is the issue of corporate governance. CEOs shouldn't be on the board of directors (at least, they shouldn't have a voting seat... advisory is fine), and should have no ability to appoint people to the board.
It may not have been an issue in this case, but if I could pick my friends to be the people who determine my pay, I'd be making a lot more than I do. Well, maybe not, but lots of people would.
Yes you could. Unions have held (and do hold) companies hostage over pay. They don't have to negotiate as much as demand what they want.
... which is no better than what unions do. They don't negotiate, they force. Doesn't look very different from collusion at all.
oookk....
Perhaps it was a secondary offering....we....dont....know....
Looks like you still don't get it. You can lead a horse to water...
Those shares could have been sold on open market with proceeds distributed to shareholders instead of given to that guy.
It is tiresome listening to the liberal jealous arguments about pay. Limiting executive pay to a certain multiple of the lowest paid employee is socialist and has no basis in the free market. There are plenty of societies that prefer a more robust middle class with less opportunity for wealth (Canada is a good example, the people there made the choice to bear higher taxes in order to provide for medical care for everyone - I am Canadian but left over 20 years ago). They don't limit pay via laws, their society does.
I think the "fairness" discussion really sould be about fairness of opportunity. Last I checked, the USA is still a pretty open and free market where many people have an opportunity to earn large salaries. Education, hard work, skill and luck all contribute. I am not so concerned about what other people make as long as I have the opportunity to do the same.
I recommended a book a few pages back that is a good critique of the way Boards work today. I am a CFO of a public company and am on the board of one (and probably will be on another one within the next year). People are somewhat confused about what a Board does. It does not run the company, Managment does. The Board represents the owners (shareholders) and reviews managment's performance as a main function.
I have been on a compensation committee and presented to several others over the years. I have not run into a "yes man" rubber stamp Board yet. CEO comp creeps in 2 ways- the first is setting pay based on a certain target compared to the market. No company likes to say their CEO deserves less pay that the average, so the average keeps going up. They other is options and other equity. That type of pay actually aligns the CEo to the shareholders, but the typical pattern makes it very expensive (usually a large grant when the CEO starts and typically you change CEO's when there is a problem and the stock price is low reflecting the problem).
Michael
No, I do get it. From the original...odd thought that started this dialogue:
Thats like saying instead of my company building a new media wall in our NOC, they should have given it to us as bonuses.
I dont understand why the argument of opportunity cost is even part of the discussion. Its irrelevant.
(What company creates shares, sells on the open market, then gives the proceeds to stockholders just for the hell of it anyway?)
It is tiresome listening to the liberal jealous arguments about pay. Limiting executive pay to a certain multiple of the lowest paid employee is socialist and has no basis in the free market. There are plenty of societies that prefer a more robust middle class with less opportunity for wealth (Canada is a good example, the people there made the choice to bear higher taxes in order to provide for medical care for everyone - I am Canadian but left over 20 years ago). They don't limit pay via laws, their society does.
I think the "fairness" discussion really sould be about fairness of opportunity. Last I checked, the USA is still a pretty open and free market where many people have an opportunity to earn large salaries. Education, hard work, skill and luck all contribute. I am not so concerned about what other people make as long as I have the opportunity to do the same.
I recommended a book a few pages back that is a good critique of the way Boards work today. I am a CFO of a public company and am on the board of one (and probably will be on another one within the next year). People are somewhat confused about what a Board does. It does not run the company, Managment does. The Board represents the owners (shareholders) and reviews managment's performance as a main function.
I have been on a compensation committee and presented to several others over the years. I have not run into a "yes man" rubber stamp Board yet. CEO comp creeps in 2 ways- the first is setting pay based on a certain target compared to the market. No company likes to say their CEO deserves less pay that the average, so the average keeps going up. They other is options and other equity. That type of pay actually aligns the CEo to the shareholders, but the typical pattern makes it very expensive (usually a large grant when the CEO starts and typically you change CEO's when there is a problem and the stock price is low reflecting the problem).
Michael
If the employees have marketable skills and do not like the terms of their contract then they are more than welcome to take their talents to another company