Disagree. Quality CEOs are in short supply. They must be paid more or companies can't survive.
Agree. Times are tough. CEOs should take pay cuts to help their companies be more profitable.
You didn't give me a choice on this poll. Almost nobody knows how much CEO’s are paid. They get money from the company via mechanisms that don’t have to even be revealed to the whole board, or to stock holders, or to the government. Some of these techniques have been made illegal, but not enough. One favorite of mine, which is now has to be revealed to the board, is differed pay. Money earned this year but paid to the CEO after he leaves the company. So, what pay are you asking about, the pay we know about or the pay we don’t know about? Do you want to be made happy by what you’re told or by what is real? (I had a short conversation with a high level accountant at a large US corporation that confirmed other reports I’d read.)
Liberté. Égalité. Fraternité.
Note that I know that if you total all the CEO ‘income’ relative to the total amount paid to all the other employees. However, what you end up with is workers that have almost no influence via disposable income vs. a CEO that has a huge disposable income.
Think about your senator being influenced by visiting with 1,000 people contributing $100 each ($100,000) vs. a visiting lobbyist representing a CEO offering $100,000 direct support via an organization that is difficult to trace to the CEO, $100,000 indirect support, and some vacations at his properties.
I was interested if there were any companies who asked workers to take a pay cut and also cut their CEO's pay. I did a search of google news and didn't find anything. I did find that Sony's CEO took a pay cut. The article didn't say whether workers were also taking a cut:
Sony's CEO Howard Stringer Takes Pay Cut as Profit Drops - WSJ.com
I wonder if there are companies out there whose CEOs are writing memos like this one: "Times are tough; we've asked you to take a pay cut. I will also be taking a cut." That would be the right thing to do. If a CEO out there did that, I would have a lot of respect for him.
I wonder if Congress will vote themselves a hard times pay cut. Hahahahahahahah! I had to include some humor in this thread.
Since CEO pay is almost entirely based on options and incentives, I don't have a problem with it. Pay is determined on the success of the company, specifically book value. Now I would have a problem if a company was drowning in red ink and its CEO was getting more and more money, like the banking giants were doing during the FNMA and FHLMC (that's Fannie Mae and Freddie Mac for those of you without a degree in finance) days. However, if a company was going "lean and mean" to propel themselves up, then the CEOs should get a reward for shrewd business practices. The truth is that we were running on a faulty business model for many decades, as GM has taught us in spades.
Besides, with the difficulty involved in being a CEO, they earn the right to demand a lot.
This is from a WSJ piece a few months ago on the topic of 2010 CEO pay increases.
The Year's Highest Paid CEOs - WSJ.comSeveral chief executives experienced sizable drops in pay. Occidental Petroleum Corp.'s Ray Irani, who retired Friday, saw his 2010 compensation shrink 71% to $14.9 million.
The decline mainly grew out of a shareholder backlash that prompted the big oil concern to set a new policy last year cutting its longtime leader's maximum compensation by nearly three quarters.
But Mr. Irani received an additional $70 million in long-term payouts in 2010—largely as a result of meeting performance goals set by Occidental's board in 2007. (The Journal does not count the payout of prior awards as part of annual compensation.)
While serving as executive chairman until 2014, Mr. Irani still will have most compensation based on long-term performance, an Occidental spokesman said.
Last edited by LuckyDan; 07-05-11 at 12:47 PM.
Morally I agree - they should voluntarily take a pay cut. Realistically however, the amount saved by a CEO cutting 10% of their salary is next to nothing.
“I think if Thomas Jefferson were looking down, the author of the Bill of Rights, on what’s being proposed here, he’d agree with it. He would agree that the First Amendment cannot be absolute.” - Chuck Schumer (D). Yet, Madison and Mason wrote the Bill of Rights, according to Sheila Jackson Lee, 400 years ago. Yup, it's a fact.
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