<p>Razor, Not even other CEO’s love CEO’s the way you do.</p>
<p>And those women are not nobodies. They are very, very talented.</p>
<p>Maybe retail of the everyday was out of the purview of Ron, but he crashed and burned. End of story. You don’t have to praise his failure. For which he was paid 12 million dollars in stock.</p>
<p>ETA: there is no free market. It doesn’t exist. The government regulates to protect some favored parties. Oligarchy</p>
<p>Razorsharp, you have no clue who should be a CEO of whatever company. And why should you? You don’t have the knowledge. The same with most shareholders, myself included.</p>
<p>We don’t choose.</p>
<p>Hell…the last company I was involved with only had 15 shareholders of which I was one and I still didn’t choose the CEO. And the CEO sucked.</p>
<p>Blankfein and Dimon don’t know the risk their companies have…
These companies that clear hft firms…these companies don’t know their risk. :)</p>
<p>We could have taken cost them billions. ;)</p>
<p>I know, right? Dimon on the phone “oh it’s just a hitch.” No. It’s the whale. But, he is worth every penny.</p>
<p>The thing is, Dimon is even good, and he is not worth it.</p>
<p>“Well, he is connected.”</p>
<p>put anyone in that seat and they are connected. Immediately.</p>
<p>yikes! That was one of those popcorn cans with coiled snakes that jump out. </p>
<p>Let me take one: I am not saying that the size of the company is an indicator of a free market per se. Kluge, the OP, sited that the HP management was paid a large amount and said “What’s that about “the free market” again”.</p>
<p>I brought up the size of the company and it giant revenue as the justification of why their C-level should be paid a lot. </p>
<p>I am not the one advancing a thesis- Kluge is. The burden is on him.</p>
<p>Argbargy, so do you acknowledge the United States is not a free market?</p>
<p>I don’t have the contacts poetgrl or her husband have, but I have had enough experience in the marketplace to know that Dimon and Blankfein and others do not have the knowledge of what is going on that they pretend to have. How could they? Nobody could. It is the pretending that they have the knowledge that bugs me. Because people buy the bs.</p>
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<p>Very simply, this is why no CEO is worth these kinds of multiples.</p>
<p>We need some Henry Fords, now. More than ever.</p>
<p>The ceo isnt micromanaging every aspect of the business. </p>
<p>They are setting direction, putting the people they want in place and reviewing progress. </p>
<p>Ron Johnson had a perfectly plausible plan- value pricing, no promotions, make the stores younger and trendier. He is responsible for that plan and getting it executed. </p>
<p>In practice when I took my mother there, they no longer carried clothes she would wear and they had dance music pumping in every department. And the sales staff, when you could find them, dont even carry a tape measure. We had to leave without buying anything. </p>
<p>The difference between perusing a number of completely plausible expansion plans is what a CEO is in charge of. And its pretty visible when it doesnt go right.</p>
<p>
So let me restate my thesis:<br>
<p>Incidentally, for those who accuse me of “leftist” leanings on this point, consider again that I have no problem with people being paid a lot of money if it is capitalistically-justified, which is why you won’t hear me saying that athletes or actors are “overpaid”, since their compensation is based on a straightforward cost/benefit analysis. I just don’t see any free market forces at work in the area of CEO compensation, or evidence that it’s really cost/benefit driven. I’m for capitalism, but frown on cronyism.</p>
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<p>How many times do I have to say this. Shareholders chose the directors who chose the CEO. Maybe there are companies that let shareholders chose their CEO but I am no aware of any public ones.</p>
<p>Shareholders go to shareholder meetings and can offer resolutions. Usually they are nutty and defeated. I have had to vote on numerous resolutions saying the company should not do business in this country or that country or with this group or that group.</p>
<p>Razorsharp, in a true democracy the governing body can lose an election. When was the last time the board of a major American corporation was defeated in a shareholder election?</p>
<p>A shareholder election isn’t a voter’s democracy like an election. If I have a million shares and you have 3 I get the candidate I want even though your candidate for the board may be better. The reason MSFT can’t get rid of Ballmer is because he has so many shares and he vote them for his board members.</p>
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<p>The source the article links to is AFL-CIO. The AFL page says that its calculations uses the BLS Current Employment Statistics Survey table B-2 compared to the BusinessWeek Executive compensation survey. </p>
<p>BLS is a survey of earnings: pay + overtime pay. BusinessWeek is a Compensation survey, which includes all sorts of pay categories beyond salary. </p>
<p>401K matches, heath care expense, bonus pay have obviously become a much bigger factor in the cost of a worker since the '80’s but they are unaccounted for in this methodology. </p>
<p>CEO’s are also much more likely to have advanced degrees and be towards the end of their career then the average worker. </p>
<p>The whole thing is an apples oranges comparison.</p>
<p>Somebody said this point earlier:</p>
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<p>[Cracking</a> the CEO Pay Puzzle ? The American Magazine](<a href=“http://www.american.com/archive/2008/march-april-magazine-contents/cracking-the-ceo-pay-puzzle]Cracking”>http://www.american.com/archive/2008/march-april-magazine-contents/cracking-the-ceo-pay-puzzle)</p>
<p>No, argybargy, you’re making the apples-to-oranges comparison.<br>
The comparison is CEO pay vis a vis average worker pay 1982 vs. CEO pay vs. average worker compensation 2013. Whatever factors are included in the 1982 figures should be repeated in the 2013 figures for apples to apples. CEO’s have always tended to have advanced degrees and be towards the end of their careers. Nobody is saying CEO’s shouldn’t be paid more than janitors - that is the “apples to oranges” comparison you’re making.</p>
<p>Maybe in your world 401k and bonuses “have become a much bigger factor in the cost of a worker since the 80’s” but I think that, overall, the demise of defined benefit pensions for almost all private sector workers dwarfs that for the workforce as a whole. Regardless, the variation in how much fringe benefits cost vs. base pay from 1982 to 2013 is certainly less than 50%, meaning it’s a non-factor compared to the eight-fold increase on the other side of the equation.</p>
<p>Razorsharp, with all due respect, that rationalization makes no sense at all. The responsibility and value of a CEO is not directly proportionate to the capitalization of the company. The CEO of a rising new company may work harder and have greater personally responsibility and value-added than the CEO of an established corporation that’s mostly “going through the motions.” And as the article acknowledges, the model only “works” for America (not other countries) and only from 1970 on. That’s a fig leaf - which, incidentally, resembles the fatuous justifications I saw for giving a corporate CEO a huge compensation package despite the fact that he hadn’t really done much of anything for his company.</p>
<p>[Firms</a> Cringe at Revealing CEO-Worker Pay Gap - WSJ.com](<a href=“Firms Cringe at Revealing CEO-Worker Pay Gap - WSJ”>Firms Cringe at Revealing CEO-Worker Pay Gap - WSJ)</p>
<p>If they thought they could actually justify it with numbers, they would be out in the open. But they are hiding. </p>
<p>Even the notoriously pro-ceo WSJ comments are in favor of CEO compensation linked to actual metrics.</p>
<p>As for Ron and JCPenny, he just never had any experience working with a company that wasn’t “hip.” JCPenny has an audience. They just aren’t “hip.” It would take a good long time to make them hip and cool, and nobody in retail has that kind of time right now.</p>
<p>If you put out too many flops in hollywood? You don’t direct anymore. Know your audience. Very, very simple concept, but tough to grasp when you’ve been at apple for so long. Probably not his fault. They hired a one product guy, a guy who was always given the easiest stuff in the world to Market, and they said, “Go sell pots and pan and slacks.” They would have been better off stealing somebody from Target, frankly.</p>
<p>Let’s see, CEO compensation is set by BoD’s that are never subject to any actual shareholder control, and they want to keep the gap between CEO pay and average worker pay secret.</p>
<p>What could possible be wrong with that? :rolleyes:</p>
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<p>Are you kidding me? I would say the sole value of a CEO is market capitalization. Market capitalization is the number of share existing times the stock price. I only invest in companies that I think the market capitalization will increase through stock price appreciation. The purpose of the CEO is to run the public company to make money and a lot of it. The more money the company makes, the higher is its market capitalization.</p>
<p>That’s an interesting study, Razor, except it is pre great recession. And some of the assertions haven’t held true in our current oligarchical, crony capitalist structure.</p>
<p>ETA: Maybe that is the problem, then, Razor. it certainly doesn’t seem to be the solution to our economic situation. At all.</p>
<p>Shareholders vote for the directors after the directors are already chosen…razorsharp.</p>