Comments on: Fixing Executive Compensation

By: Bill

Bill — Thu, 30 Apr 2009 22:23:57 +0000

Too bad all company owners do not think like you do! All that you see the past few years is lay everybody off, sell assets & be paid more money. Greed is very rampant today & it hurts the people that made the companies profitable in the 1st place! The CEO’s & Presidents didn’t make the company work! Sure they made good decisions on the money most of the time, but they did not do the actual work that generated income! In the past this country was based on people making a living & working with other people trying to make a living. Now its just who wants to get rich quick by screwing the other person! Believe me I have been there & have enough knives sticking out of my back from the corporate world that I sprinkle my yard when I drink water! Oh I forgot, I lost my yard along with my house because of corporate greed & layoffs! Now I just sprinkle somebody elses yard! Mr. Cuban I have admired your spirit from the 1st time I read about you! Hire me for one of your companies if you please!

By: Matt

Matt — Tue, 21 Apr 2009 17:18:55 +0000

The public market is like government: it is focused on short-term solutions to appease a group with an unfair interest in the outcome of those solutions. If businesses ran in a more “private” fashion (smaller groups of investors, like VC firms, instead of a market full of stakeholders) they would be free to focus on longer-term health and the well-being of their employees. Instead, they have to bow to the will of people who have only their investment at stake. People who only care about how much money you made them this month. Employees, and therefore families, children etc., suffer in this arrangement. It is no less “capitalistic” to run businesses in a more “private” manner (again, small groups of investors, increased stakeholding by employees) and the results are better over the long run.

By: Michael Daly

Michael Daly — Tue, 21 Apr 2009 02:26:50 +0000

Why can’t there be a website called “Camode on legs” after Mr. John Thain’s renovated office. This would be a Morningstar like website that follows board of directors and compensation committees. FOr instance, why is the CEO of Dow Chemical on the board at Citigroup? Why did Lehman Brothers have a Broadway producer on it’s board of 9 with one board member having financial experience? How about Countrywide who had someone on the board who was paid to recruit other board members? Or the political appointments and two paid consultants (conflict of interest) on Enron’s board. This is the only way the public can be informed. I am sure there are some retired Lehman employees who may want to get in . Voting is controlled by the institutions. Those who own only 100 shares and are looking to buy the stock have no real knowledge of what is going on behind closed doors. Anyone interested?

By: Scott Haley

Scott Haley — Thu, 16 Apr 2009 18:50:02 +0000

Interesting thoughts. I wish more CEO’s had your ideals i.e. not laying off people. Think of the time and money spent in training them in the first place. How much will you have to spend hiring those to replace a group of highly trained and seasoned employees when the market turns up?

By: mbilinsky

mbilinsky — Tue, 14 Apr 2009 05:48:52 +0000

Going back to BoscoH’s reference to the Clinton era tax reform that capped corporate deductions in executive salaries at $1 million, I’m reluctant to lay the blame on this measure since there appear to be so many benefits for executives to take compensation in the form of stock options beyond cap avoidance.

However, the cap obviously needs to be adjusted for inflation (I’m talking 40-50% executive pay inflation, not 10-12% measly core inflation) and I’d be interested in seeing the responsiveness of executive compensation figures to a major increase in that deduction. Whatever the motivations behind that cap, it certainly hasn’t restrained executive compensation so it’s probably superfluous at this point.

http://chaosoutoforder.wordpress.com/

By: Chris

Chris — Mon, 13 Apr 2009 02:38:22 +0000

I think executives should make money only if their company is making money. In essence, executives are the vision for their company and are the ultimate executive sales force. Most sales persons do not make money if they do not sales. Take for instance, GM. The CEO makes millions and the company is not selling. He should have a base salary, but be compensated on what he actually helps bring in from his vision.

By: Karen

Karen — Fri, 10 Apr 2009 23:02:12 +0000

Executives should be compensated “if” they do a good job. Otherwise we are going to move towards a communist society. The problem is that no one controls the CEO of public companies. There’s not accountability in this cases.

By: Mike

Mike — Fri, 10 Apr 2009 00:32:49 +0000

I’m a 70-year-old man who believes Mark Cuban is a genius. Never met the boy.

By: Shake

Shake — Thu, 09 Apr 2009 21:52:15 +0000

The real truth is most companies aren’t profitable and rely on credit and debt just to make ends meet. In the last 8 years, the realiance on credit and debt instruments by companies in order to just keep operating has grown astronomically. I have no data to back it up but at least 50% of all companies in America are insolvent. You had companies of all sizes relying on the credit/debt markets in order to just pay salaries every two weeks. With an insolvent banking system that has squandered much of the cash even good companies claim to have, its a waste of time to talk about solving the symptoms of a banking crisis before addressing the insolvent banking system first. Right now, more banks are being turned into zombies similar to Japan in the 1990s and this will affect any recovery for years if not a decade.

By: Steve Hartnett

Steve Hartnett — Mon, 06 Apr 2009 14:32:36 +0000

About a month ago I sent over 1000 letters to government and media. I agree with most all Mark has to say. Stock options are definitely WEAPONS OF WEALTH DESTRUCTION. Don’t be fooled by CEO’s accepting less pay now. As soon as the heat is off they will set new records in pay. The trend is crystal clear. Their pay takes 10 steps forward and 1 step back. They trumpet and call attention to the 1 step back, everybody gets off their case and then, BOOM, new record pay. The runaway problem became more acute when they started using options in the mid 70’s. OPTIONS MUST BE TERMINATED AS A FORM OF COMPENSATION. Reasons, to numerous to list. To name just a couple: (1)Options create RISK MANAGEMENT VERTIGO where decision makers seek out risky deals. (2) Options destroy executive impartiality regarding dividends,creating huge conflicts when setting policy because it affects their options.

Steve Hartnett