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Direckshun
11-30-2012, 08:00 AM
This is something I'd like to see your explanations on.

Corporations are recording record profits in 2012. Not good profits, record profits.

And yet our economy struggles at a little under 3% growth and a high unemployment rate.

Why, in your opinion, is the economy so bad yet businesses are doing so great?

http://economix.blogs.nytimes.com/2012/11/29/record-corporate-profits/

Record Corporate Profits
United States corporate profits reached a record high in the third quarter of this year, even adjusted for inflation, according to a report from the Bureau of Economic Analysis.
By CATHERINE RAMPELL
November 29, 2012, 3:00 pm

http://graphics8.nytimes.com/images/2012/11/29/business/economy/economix-29corpprofitstotal/economix-29corpprofitstotal-blog480.jpg

The increase from the second quarter was entirely a result of stronger business at home. Profits received from American-owned businesses abroad fell slightly in the third quarter, which may not be surprising given the recession in Europe and the slowdown in China.

Additionally, all of the growth in domestic corporate profits was accounted for by the financial sector.

Domestic profits of financial corporations rose $71.3 billion in the third quarter, after falling $39.7 billion in the second. Domestic profits of nonfinancial corporations, on the other hand, decreased $1 billion in the third quarter, after rising $27.8 billion in the second quarter.

http://graphics8.nytimes.com/images/2012/11/29/business/economy/economix-19financialnonfinancialcorpprofits/economix-19financialnonfinancialcorpprofits-blog480-v2.jpg

Direckshun
11-30-2012, 08:03 AM
Crazy.

http://m.static.newsvine.com/servista/imagesizer?file=steve-benen62B0C485-A5B6-D5A1-41BD-C60EEBAEEE5F.jpg&width=600

That's during a recovery from a severe recession. That is nuts.

Fish
11-30-2012, 08:15 AM
They're the job creators. Just wait..... any minute now......................

blaise
11-30-2012, 08:30 AM
They're the job creators. Just wait..... any minute now......................

Yes, they don't currently employ anyone.

the steam
11-30-2012, 08:33 AM
Human labor is a commodity. The market is abundant so the price is down.

Fish
11-30-2012, 08:39 AM
Yes, they don't currently employ anyone.

Record profits. Record unemployment.

Maybe you're right though. Maybe they'll start hiring now. No, wait.... maybe "NOW"....

Nope? Ohh well let's just blame Obama...

petegz28
11-30-2012, 08:41 AM
Low interest rates + increase productivity with smaller labor force = corporate profits

blaise
11-30-2012, 09:08 AM
Record profits. Record unemployment.

Maybe you're right though. Maybe they'll start hiring now. No, wait.... maybe "NOW"....

Nope? Ohh well let's just blame Obama...

So, they should hire more people even though they're getting the job done now?


Maybe you'll stop waiting for corporations to hire employees they don't need.....no....no wait....NOW.

Nope? Ohh, let's just act like someone in this thread other than you mentioned Obama...

Dallas Chief
11-30-2012, 09:27 AM
Why, in your opinion, is the economy so bad yet businesses are doing so great? You first.

nstygma
11-30-2012, 09:29 AM
are not corporate executives typically rewarded based on their performance and how much profit they generate?

Radar Chief
11-30-2012, 10:28 AM
I think a better question is, if they’re so profitable why are they afraid of expanding?

Brock
11-30-2012, 11:10 AM
They've figured out they can do it without hiring a bunch of people. All you have to do is scare the shit out of your remaining employees and they'll work longer hours for free.

Cave Johnson
11-30-2012, 11:11 AM
So, they should hire more people even though they're getting the job done now?


Maybe you'll stop waiting for corporations to hire employees they don't need.....no....no wait....NOW.

Nope? Ohh, let's just act like someone in this thread other than you mentioned Obama...

Which is fine, but stop with the charade that the prospect of slightly higher taxes on corporate executives is the reason they're not hiring.

ROYC75
11-30-2012, 11:28 AM
Record profits. Record unemployment.

Maybe you're right though. Maybe they'll start hiring now. No, wait.... maybe "NOW"....

Nope? Ohh well let's just blame Obama...

Quick, Call the White House, Mr Obama is going to be pissed one of his Obots has revolted.;)

ROYC75
11-30-2012, 11:29 AM
I think a better question is, if they’re so profitable why are they afraid of expanding?

This !

ROYC75
11-30-2012, 11:32 AM
Which is fine, but stop with the charade that the prospect of slightly higher taxes on corporate executives is the reason they're not firing.

Stick your head into the sand some more, it's not a charade. All the business I deal with tell me this first hand it's the primary reason. The uncertainty of the fiscal cliff, no federal budget, taxes are what's driving the lack of jobs.

|Zach|
11-30-2012, 11:44 AM
Stick your head into the sand some more, it's not a charade. All the business I deal with tell me this first hand it's the primary reason. The uncertainty of the fiscal cliff, no federal budget, taxes are what's driving the lack of jobs.

Professionally speaking you seem to have a victim mentality.

NewChief
11-30-2012, 11:47 AM
They've figured out they can do it without hiring a bunch of people. All you have to do is scare the shit out of your remaining employees and they'll work longer hours for free.

Don't forget to have your workers agree to "temporary" salary cuts during these tough times. We'll return you to your normal wages soon.....






We promise. Any day now!

Brock
11-30-2012, 12:02 PM
Stick your head into the sand some more, it's not a charade. All the business I deal with tell me this first hand it's the primary reason. The uncertainty of the fiscal cliff, no federal budget, taxes are what's driving the lack of jobs.

Maybe they just don't want to do business with you.

Fish
11-30-2012, 12:08 PM
Don't forget to have your workers agree to "temporary" salary cuts during these tough times. We'll return you to your normal wages soon.....






We promise. Any day now!

Times are tough. Everybody is having to make sacrifices. Just appreciate the fact that you have a job. I realize we said this last year, and the year before, but hopefully next year we'll be in position to give annual raises again.

Meanwhile, in the CEO's office:

http://img405.imageshack.us/img405/547/scroogemcduck.jpg

Dallas Chief
11-30-2012, 12:35 PM
They've figured out they can do it without hiring a bunch of people. All you have to do is scare the shit out of your remaining employees and they'll work longer hours for free.

Illegal AFAIK. We watch this like a hawk in my company. No work off the clock. Zip. Zero. None. People get fired for working off the clock, no warning, no reprimand. First time and you are gone, it is that serious around here.

Cave Johnson
11-30-2012, 12:38 PM
Stick your head into the sand some more, it's not a charade. All the business I deal with tell me this first hand it's the primary reason. The uncertainty of the fiscal cliff, no federal budget, taxes are what's driving the lack of jobs.

And you take them at face value? Adorable.

RaiderH8r
11-30-2012, 12:38 PM
Looks like they've cut some dead weight and made operations more efficient. However, the consumer base hasn't rebounded to the point to justify expansion. Or they're sitting on cash for the tax bill. Or they're sitting on cash to hire lawyers to comply with the thousands of regulations coming down the pike. Or, or, or, or, or...Or is the very essence of uncertainty so until you fix "or" forget pumping cash into the system. I know for a fact that a lot of small business owners, those filing as S corps, are looking at the tax hike on individual tax rates on and that tax hike strikes right at the heart of whether they choose to hire or choose to pay the tax bill Obama is proposing. So they're sitting on assets or putting assets elsewhere until this thing plays out.

ROYC75
11-30-2012, 12:46 PM
Professionally speaking you seem to have a victim mentality.

Professionally, what are your qualifications in this field.

Do you have references, clientele that can vouch for your expertise ?
:popcorn:

ROYC75
11-30-2012, 12:47 PM
Maybe they just don't want to do business with you.

Maybe ?


Reach much? Watch out for those darts you are throwing in the air there my fellow Jayhawk brethren.:D

Mr. Kotter
11-30-2012, 01:01 PM
Illegal AFAIK. We watch this like a hawk in my company. No work off the clock. Zip. Zero. None. People get fired for working off the clock, no warning, no reprimand. First time and you are gone, it is that serious around here.

Pay your employees salaries! Magically.....the mythical 40 hour week becomes a 60 hour week. Shazaam!

Brock
11-30-2012, 01:15 PM
Illegal AFAIK. We watch this like a hawk in my company. No work off the clock. Zip. Zero. None. People get fired for working off the clock, no warning, no reprimand. First time and you are gone, it is that serious around here.

There is no clock for salaried people.

durtyrute
11-30-2012, 01:26 PM
Because

http://iswirl.info/wp-content/gallery/november/george_bush.gif

and

http://www.sinuousmag.com/wp-content/uploads/2011/01/Obama-doesnt-care.jpg

ROYC75
11-30-2012, 01:58 PM
And you take them at face value? Adorable.

Well, isn't this such a shallow post. There are other reasons to go with it but let's not get into the semantics of what and why, there are so many.

blaise
11-30-2012, 02:09 PM
Times are tough. Everybody is having to make sacrifices. Just appreciate the fact that you have a job. I realize we said this last year, and the year before, but hopefully next year we'll be in position to give annual raises again.

Meanwhile, in the CEO's office:

http://img405.imageshack.us/img405/547/scroogemcduck.jpg

There's that great American envy we all strive for! Attaboy!

JonesCrusher
11-30-2012, 02:09 PM
Because left or right, they are all bought and paid for in Washington. This pissing contest we the people have is just that.

Mr. Flopnuts
11-30-2012, 02:24 PM
Capitalism baby! It's capitalism. Make the most money you can. Don't complain. One of these days, it could be you! There is no better opportunity on earth to live a wonderful lifestyle than here in the United Corporations of America. U-C-A! U-C-A U-C-A!

If you don't love it, leave it!

whoman69
11-30-2012, 02:47 PM
Greed.

The companies are profitable because they have wrung every ounce of money they can from outsourcing or paying lower wages to their non executive employees while paying immense amounts of money to those executives who have made the company so profitable. They could certainly hire if executive pay was inline with what it was 30 years ago. Minimum wage under that scenario would be $11/hr. How many aren't even making what the equivalent was for minimum wage?

This is also why the economy cannot grow. Companies need to realize the people they outsourced can no longer afford their products and certainly the ill paid people they hired can't either.

Fish
11-30-2012, 02:52 PM
There's that great American envy we all strive for! Attaboy!

No, I'm not envious. I've never wanted to be super rich. That's an awfully simplistic and assumptive way to look at it. Stop trying to argue and make an effort to understand.

This practice of mega corporations rewarding CEOs and driving income inequality to absurd limits, while cutting jobs and forcing the workforce to work for peanuts with no benefits, is killing America. Corporations have a stranglehold on the economy. They have roots so deep into the government, that they're affecting law for themselves. That's why we have these record profits in the midst of record unemployment. They're running the game.

You're defending organizations that don't give a shit about you or anything else except the few men at the top. You're encouraging greed in the face of massive unemployment. For what? Do you really think this kind of thing makes America better? Tell me how this form of capitalism puts the American dream in reach for those who want it...

Mr. Flopnuts
11-30-2012, 02:55 PM
Corporations are killing the American dream. Swoop in, put small business out of work because they can't compete with volume pricing discounts, then put those people to work for peanuts. Capitalism baby! You could be that guy one of these days! Don't complain!

ChiTown
11-30-2012, 02:57 PM
Corporations are killing the American dream. Swoop in, put small business out of work because they can't compete with volume pricing discounts, then put those people to work for peanuts. Capitalism baby! You could be that guy one of these days! Don't complain!

That's a pretty wide sweeping generalization there.

Dallas Chief
11-30-2012, 04:13 PM
Pay your employees salaries! Magically.....the mythical 40 hour week becomes a 60 hour week. Shazaam!

Pretty much my whole adult life I have benefited from the extra hours I put in though.

Oh and yeah... you can't just make a position salaried just because you want to. There are certain criteria that need to be met in order to do so. You just can't make a cashier a salaried employee so you can make them work more hours. Nice try though...:rolleyes:

RaiderH8r
11-30-2012, 05:08 PM
Pay your employees salaries! Magically.....the mythical 40 hour week becomes a 60 hour week. Shazaam!

To be fair, if we're talking about unionized labor the 40 hour work week truly is mythical. They avoid it like Super AIDS or the 40 hr work week. I like the union 8 myself, in at 10 out at 2 and a 90 minute lunch.

KC native
11-30-2012, 05:28 PM
Looks like they've cut some dead weight and made operations more efficient. However, the consumer base hasn't rebounded to the point to justify expansion. Or they're sitting on cash for the tax bill. Or they're sitting on cash to hire lawyers to comply with the thousands of regulations coming down the pike. Or, or, or, or, or...Or is the very essence of uncertainty so until you fix "or" forget pumping cash into the system. I know for a fact that a lot of small business owners, those filing as S corps, are looking at the tax hike on individual tax rates on and that tax hike strikes right at the heart of whether they choose to hire or choose to pay the tax bill Obama is proposing. So they're sitting on assets or putting assets elsewhere until this thing plays out.

Or you could just keep building strawmen.

Easy 6
11-30-2012, 05:41 PM
No, I'm not envious. I've never wanted to be super rich. That's an awfully simplistic and assumptive way to look at it. Stop trying to argue and make an effort to understand.

This practice of mega corporations rewarding CEOs and driving income inequality to absurd limits, while cutting jobs and forcing the workforce to work for peanuts with no benefits, is killing America. Corporations have a stranglehold on the economy. They have roots so deep into the government, that they're affecting law for themselves. That's why we have these record profits in the midst of record unemployment. They're running the game.

You're defending organizations that don't give a shit about you or anything else except the few men at the top. You're encouraging greed in the face of massive unemployment. For what? Do you really think this kind of thing makes America better? Tell me how this form of capitalism puts the American dream in reach for those who want it...

Why bother arguing, no amount of common sense is going to work with some people.

Just let the big corporations do whatever they want, because eventually they're going to reinvest in the nation... a nation like China, or India, or Bangladesh, or Taiwan, or...

CoMoChief
11-30-2012, 05:53 PM
Because they can afford the hyper inflation, in fact it doesn't effect them at all because they pass it all down to the consumer. Not to mention they co-write the legislation, tax laws and monetary policy that benefit large corporations and the very top of the wealth pyramid.

Dallas Chief
11-30-2012, 05:56 PM
Because they can afford the hyper inflation, in fact it doesn't effect them at all because they pass it all down to the consumer. Not to mention they co-write the legislation, tax laws and monetary policy that benefit large corporations and the very top of the wealth pyramid.

Shhhhh... nobody wants to hear that.

CoMoChief
11-30-2012, 06:04 PM
The large Wall St. banking firms are in bed in so many important positions in DC. They've been DEEPLY rooted in our CIA. That's on record. These guys are in bed with our Treasury, Federal Reserve, the Executive Branch. These crooks like Jon Corzine can get up in front on US Congress and tell them all to fuck you he's going to do whatever the hell he wants to, and he doesn't get into any kind of trouble at all.

Easy 6
11-30-2012, 06:07 PM
Because they can afford the hyper inflation, in fact it doesn't effect them at all because they pass it all down to the consumer. Not to mention they co-write the legislation, tax laws and monetary policy that benefit large corporations and the very top of the wealth pyramid.

None of that makes it right for America.

|Zach|
11-30-2012, 06:47 PM
Well, isn't this such a shallow post. There are other reasons to go with it but let's not get into the semantics of what and why, there are so many.

If you explain the reasons for what and why that is not semantics.

You know words mean things.

go bowe
11-30-2012, 07:21 PM
If you explain the reasons for what and why that is not semantics.

You know words mean things.

whaaasis? words mean things?

bloody communist artiste savant!

this here is americur and don't you forget it!

RJ
11-30-2012, 08:56 PM
They've figured out they can do it without hiring a bunch of people. All you have to do is scare the shit out of your remaining employees and they'll work longer hours for free.

I believe Brock has summed up the answer in just two short sentences.

RJ
11-30-2012, 08:58 PM
Illegal AFAIK. We watch this like a hawk in my company. No work off the clock. Zip. Zero. None. People get fired for working off the clock, no warning, no reprimand. First time and you are gone, it is that serious around here.


Good for your company, I applaud them.

Easy 6
11-30-2012, 09:17 PM
Good for your company, I applaud them.

THE BEATINGS WILL CONTINUE

Pants
11-30-2012, 10:56 PM
Times are tough. Everybody is having to make sacrifices. Just appreciate the fact that you have a job. I realize we said this last year, and the year before, but hopefully next year we'll be in position to give annual raises again.

Meanwhile, in the CEO's office:

http://img405.imageshack.us/img405/547/scroogemcduck.jpg

True story: I used to work for UHG. In 2008, nobody got any raises or bonuses. It was due to the extremely poor economy, they said. Well, Steve Hemsley, the CEO, got a $102 million bonus. I guess the CEOs aren't really affected by the economy? I don't know.

Psyko Tek
11-30-2012, 11:19 PM
I was thinking supply demand?

no demand no hiring

no money to spend no demand

it's a nasty ass cycle

is manufacturing dead in the USA?
service jobs are gonna kill this country
and management and walls street can all be out sourced also

blaise
12-01-2012, 06:38 AM
No, I'm not envious. I've never wanted to be super rich. That's an awfully simplistic and assumptive way to look at it. Stop trying to argue and make an effort to understand.

This practice of mega corporations rewarding CEOs and driving income inequality to absurd limits, while cutting jobs and forcing the workforce to work for peanuts with no benefits, is killing America. Corporations have a stranglehold on the economy. They have roots so deep into the government, that they're affecting law for themselves. That's why we have these record profits in the midst of record unemployment. They're running the game.

You're defending organizations that don't give a shit about you or anything else except the few men at the top. You're encouraging greed in the face of massive unemployment. For what? Do you really think this kind of thing makes America better? Tell me how this form of capitalism puts the American dream in reach for those who want it...

Corporations don't have a duty to employ the American workforce. They have a duty to their shareholders. Guess what? If they cut that CEO's salary down to $5 a year it doesn't mean employees at the bottom are going to get paid more. The employees are paid the market rate. Whining about CEO salaries is just whining.
No corporation is putting the American dream out of my reach.

You're talking about over simplifications and all you're doing is regurgitating a bunch of Occupy buzzwords and phrases.

Saying some CEO is keeping you down just sounds like the excuse making of an underachiever.

blaise
12-01-2012, 06:42 AM
Capitalism baby! It's capitalism. Make the most money you can. Don't complain. One of these days, it could be you! There is no better opportunity on earth to live a wonderful lifestyle than here in the United Corporations of America. U-C-A! U-C-A U-C-A!

If you don't love it, leave it!

If a person thinks corporate profits are the reasons they're not succeeding in life then I would bet they never really had much of a chance to begin with.

RedNeckRaider
12-01-2012, 07:20 AM
Corporations don't have a duty to employ the American workforce. They have a duty to their shareholders. Guess what? If they cut that CEO's salary down to $5 a year it doesn't mean employees at the bottom are going to get paid more. The employees are paid the market rate. Whining about CEO salaries is just whining.
No corporation is putting the American dream out of my reach.

You're talking about over simplifications and all you're doing is regurgitating a bunch of Occupy buzzwords and phrases.

Saying some CEO is keeping you down just sounds like the excuse making of an underachiever.

I had a similar conversation with some guys I work with. Our company built a plant in NC. There are very few people in this area that have any aircraft experience. These guys have been working for the company for a little over a year, and are good workers. One of them was ranting about how much the CEO and other high level managers make compared to their wages. I mentioned that they had started recently and were performing well. I then pointed out that it proves whoever is driving the next car on the highway presumably could do the same. I asked them what have they done to position themselves wage wise. I suggested they review the bio of the CEO. He has several degrees, MIT among other prodigious schools of higher learning. He has spent his life tailoring his skill set to his chosen profession. We are very replaceable as there is a very large percentage of the population capable of performing our jobs. However someone with his skill set is much harder to find. Damn that is a lot of typing on a mobile device lol~

chiefzilla1501
12-01-2012, 07:39 AM
Corporations don't have a duty to employ the American workforce. They have a duty to their shareholders. Guess what? If they cut that CEO's salary down to $5 a year it doesn't mean employees at the bottom are going to get paid more. The employees are paid the market rate. Whining about CEO salaries is just whining.
No corporation is putting the American dream out of my reach.

You're talking about over simplifications and all you're doing is regurgitating a bunch of Occupy buzzwords and phrases.

Saying some CEO is keeping you down just sounds like the excuse making of an underachiever.

People shouldn't defend CEOs. They are squeezing more work out of people for less pay and cutting back on employees, while doing nothing to cut back on their own pay. The fact that CEOs are making more money, while employees are making the same money for significantly more work is a problem. Secondly, it's ridiculous that CEOs are being compensated handsomely for failure. What's the point of a bonus anymore?

Problem #2. CEOs aren't investing back into their companies. This is the biggest problem in America. They could be investing more in R&D or new plants or new ventures, but they can't do that because executives are pocketing a disproportionate amount of wealth. It could be invested into technology to make the business more efficient. In marketing. Etc.... That's bullshit. These are executives. They didn't build their business, they earned the right to own it on behalf of the shareholders.

Problem #3. They get compensated for short-term performance. It doesn't matter if they create jobs 3 years from now. Just what they do today. So many are willing to cheat or create artificial results that damn us 3 years down the road. Here's a great example. To beat sales targets, you can raise commission to your sales team.

I work for a corporation. I love it and defend the private sector. But it is mind numbing that people on the right would defend executive compensation. It's getting out of control. They shouldn't be making more money while the economy tanks, nor should they have the power to squeeze a ton of work out of existing employees, nor should we applaud them for lining their pockets with more money as they cut jobs in an economy that really could use executives' support to get the overall economy going again. They are part of the problem, not the solution.

chiefzilla1501
12-01-2012, 07:43 AM
Greed.

The companies are profitable because they have wrung every ounce of money they can from outsourcing or paying lower wages to their non executive employees while paying immense amounts of money to those executives who have made the company so profitable. They could certainly hire if executive pay was inline with what it was 30 years ago. Minimum wage under that scenario would be $11/hr. How many aren't even making what the equivalent was for minimum wage?

This is also why the economy cannot grow. Companies need to realize the people they outsourced can no longer afford their products and certainly the ill paid people they hired can't either.

I don't have a problem with outsourcing. Outsourcing is a great thing. It means we get better prices. The theory of comparative advantage (in economics) is that if your country isn't great at making it, they should rely on another country to do it cheaper.

Rather than worry about outsourcing jobs, we should be encouraging the innovation that creates jobs that are uniquely American.

Fish
12-01-2012, 09:17 AM
Corporations don't have a duty to employ the American workforce. They have a duty to their shareholders. Guess what? If they cut that CEO's salary down to $5 a year it doesn't mean employees at the bottom are going to get paid more. The employees are paid the market rate. Whining about CEO salaries is just whining.
No corporation is putting the American dream out of my reach.

You're talking about over simplifications and all you're doing is regurgitating a bunch of Occupy buzzwords and phrases.

Saying some CEO is keeping you down just sounds like the excuse making of an underachiever.

Unbelievable that you could defend that practice.

But you never answered the question. How is that type of capitalism making America better? Hostess just closed their business, and they hadn't been paying their employees' pensions for a long time. But what did they do when they liquidated? They gave their executives bonuses on the way out the door. Workers are SOL. Executives get bonuses for shutting down the company and putting hundreds of thousands of people out of work.

Let's take a guess which side of the line you would be on had you worked for Hostess? Yet you defend the greed. For what?

Again.. How is that good for America?

blaise
12-01-2012, 09:38 AM
Unbelievable that you could defend that practice.

But you never answered the question. How is that type of capitalism making America better? Hostess just closed their business, and they hadn't been paying their employees' pensions for a long time. But what did they do when they liquidated? They gave their executives bonuses on the way out the door. Workers are SOL. Executives get bonuses for shutting down the company and putting hundreds of thousands of people out of work.

Let's take a guess which side of the line you would be on had you worked for Hostess? Yet you defend the greed. For what?

Again.. How is that good for America?

Defend what practice? Paying CEO's? It's called compensation.

blaise
12-01-2012, 09:41 AM
People shouldn't defend CEOs. They are squeezing more work out of people for less pay and cutting back on employees, while doing nothing to cut back on their own pay. The fact that CEOs are making more money, while employees are making the same money for significantly more work is a problem. Secondly, it's ridiculous that CEOs are being compensated handsomely for failure. What's the point of a bonus anymore?

Problem #2. CEOs aren't investing back into their companies. This is the biggest problem in America. They could be investing more in R&D or new plants or new ventures, but they can't do that because executives are pocketing a disproportionate amount of wealth. It could be invested into technology to make the business more efficient. In marketing. Etc.... That's bullshit. These are executives. They didn't build their business, they earned the right to own it on behalf of the shareholders.

Problem #3. They get compensated for short-term performance. It doesn't matter if they create jobs 3 years from now. Just what they do today. So many are willing to cheat or create artificial results that damn us 3 years down the road. Here's a great example. To beat sales targets, you can raise commission to your sales team.

I work for a corporation. I love it and defend the private sector. But it is mind numbing that people on the right would defend executive compensation. It's getting out of control. They shouldn't be making more money while the economy tanks, nor should they have the power to squeeze a ton of work out of existing employees, nor should we applaud them for lining their pockets with more money as they cut jobs in an economy that really could use executives' support to get the overall economy going again. They are part of the problem, not the solution.


It's less about defending CEOs and more about not concerning myself with their bonuses.
Lack of ambition and laziness keep more Americans from realizing the American dream than any CEO has.
What's the problem with a corporation having profits? They don't have any obligation to hire more people than they need. That's like you getting a $500 bonus at your job and me telling you you have an obligation to hire landscapers.

Fish
12-01-2012, 09:45 AM
Defend what practice? Paying CEO's? It's called compensation.

Can't answer the question huh?

Understandable....

chiefzilla1501
12-01-2012, 09:53 AM
It's less about defending CEOs and more about not concerning myself with their bonuses.
Lack of ambition and laziness keep more Americans from realizing the American dream than any CEO has.
They are both a problem. Doesn't make one any better than the other. Americans can't expect handouts, but at the same time, we shouldn't excuse corporate greed

What's the problem with a corporation having profits? They don't have any obligation to hire more people than they need. That's like you getting a $500 bonus at your job and me telling you you have an obligation to hire landscapers.
I don't have a problem with a corporation having profits. I have a problem with executives crippling the corporation from making more profits and, worse, being rewarded handsomely for it.

The biggest problem in our economy isn't as much about laziness. It's more about innovation. If the private sector would again focus on investing back into the economy instead of executives hoarding money, our economy would be in much better shape. The problem is at both the top and the bottom, and it's the people in between that get screwed.

chiefzilla1501
12-01-2012, 09:57 AM
Defend what practice? Paying CEO's? It's called compensation.

That are set by board members, who are often in bed with the CEO. I don't care about executives being compensated handsomely, but they need to be in support of LONG-TERM objectives. A CEO that creates massive losses to his company should NOT be rewarded handsomely, but they are. A CEO that boosts short-term stock price but fails to make the company 3-year competitive should NOT be rewarded as handsomely.

Until these things change, executives will cripple the economy. Sadly, the Steve Jobs' of the worlds are becoming fewer and further between. Jobs was one of those executives who made a lot of money but was motivated to turn his company into an empire. CEOs these days are just there to collect checks.

BWillie
12-01-2012, 10:31 AM
Corporations profits will of course rise in the short term after ppl are laid off or after big fiscal cuts. They are scared as hell of the current state of the economy so many are shutting down a good portion of production, limiting their inventory and down sizing. Look, corporations are around because they provide a good or service better than everyone else. They also employ most ppl in the work force. This notion that they are evil, need to be hindered by regulation, and taxed out the wazzu is the complete opposite thinking of what should be going on.

Fish
12-01-2012, 10:33 AM
That are set by board members, who are often in bed with the CEO. I don't care about executives being compensated handsomely, but they need to be in support of LONG-TERM objectives. A CEO that creates massive losses to his company should NOT be rewarded handsomely, but they are. A CEO that boosts short-term stock price but fails to make the company 3-year competitive should NOT be rewarded as handsomely.

Until these things change, executives will cripple the economy. Sadly, the Steve Jobs' of the worlds are becoming fewer and further between. Jobs was one of those executives who made a lot of money but was motivated to turn his company into an empire. CEOs these days are just there to collect checks.

Exactly. It's not about CEOs deserving money. It's about CEOs thinking they deserve 400 times the money the underlings are making, and sacrificing the health and future of the company to obtain it.

I gave an example of how Hostess fucked over their workers by demanding pay cuts and not paying their employee pensions for months upon months, while bankrupting the company repeatedly. And during final liquidation, the executives who had repeatedly failed, caused hundreds of thousands to lose their jobs and their pensions, still gave themselves bonuses. And blaise responds with "What's the problem. Yah capitalism. Herp derp."

chiefzilla1501
12-01-2012, 11:38 AM
Corporations profits will of course rise in the short term after ppl are laid off or after big fiscal cuts. They are scared as hell of the current state of the economy so many are shutting down a good portion of production, limiting their inventory and down sizing. Look, corporations are around because they provide a good or service better than everyone else. They also employ most ppl in the work force. This notion that they are evil, need to be hindered by regulation, and taxed out the wazzu is the complete opposite thinking of what should be going on.

I am a big fan of the private sector. It's where I work and I would never want to work in the public sector. But the argument that we need to tax them less is a LOT harder to make when you know that any excess money these corporations get doesn't get invested back into the business. Instead, they go into boosting bonuses for executives.

If lower taxes encouraged a company to invest in R&D and technology and new factories and retail operations, great. But it's not. They're being invested in turning an executives' $20M compensation into $25M. There is overwhelming evidence to indicate that a disproportionate amount of money is being spent in this way.

chiefzilla1501
12-01-2012, 11:43 AM
Exactly. It's not about CEOs deserving money. It's about CEOs thinking they deserve 400 times the money the underlings are making, and sacrificing the health and future of the company to obtain it.

I gave an example of how Hostess ****ed over their workers by demanding pay cuts and not paying their employee pensions for months upon months, while bankrupting the company repeatedly. And during final liquidation, the executives who had repeatedly failed, caused hundreds of thousands to lose their jobs and their pensions, still gave themselves bonuses. And blaise responds with "What's the problem. Yah capitalism. Herp derp."

Exactly.

Compensation is a scary issue. In many cases, you have boards of directors who are in bed with executives, so many executives get paid very handsomely if they do well and still handsomely even if they sink the company. And then they can roll away with a multi-million dollar golden parachute when they're fired.

The other issue is short-term vs. long-term compensation. There are ways to boost your profits for 1 year instead of focusing on 5-year growth. For example, many companies will give more commission to sales instead of investing in R&D or marketing. When you don't invest in R&D, American companies struggle to come up with the new ideas that create jobs and develop products/services that other countries want to buy from America.

blaise
12-01-2012, 12:20 PM
Exactly. It's not about CEOs deserving money. It's about CEOs thinking they deserve 400 times the money the underlings are making, and sacrificing the health and future of the company to obtain it.

I gave an example of how Hostess ****ed over their workers by demanding pay cuts and not paying their employee pensions for months upon months, while bankrupting the company repeatedly. And during final liquidation, the executives who had repeatedly failed, caused hundreds of thousands to lose their jobs and their pensions, still gave themselves bonuses. And blaise responds with "What's the problem. Yah capitalism. Herp derp."

Yeah, herp derp. A thread about corporations making profits and your response is "herp derp, CEOs HOSTESS!" You sound like a bumper sticker. "CEOS AND GREED AND LOOK AT ALL THAT MONEY THAT CEO MAKES HERP DERP!"
You're apparently under the impression that these companies making profits should just run out and spend the money on what?

Guess what? If you're sitting around waiting for some CEO to take a pay cut to improve your life you're a sap. And if you think we're going to ever end up in some pollyanna universe where you can count on working for a company for 40 years, getting a pay raise every year, and then retiring on a pension then you're sucker. You might as well long for the days of cassette tapes, because those days are gone. You can spend your life crying about CEOs all you want.

Stewie
12-01-2012, 12:53 PM
You really don't understand why corporate profits are soaring? It's the last ditch effort of the Federal Gov't and the Federal Reserve to move anything forward in this economy. They pay corporations to borrow money and yet look at the bond ratings of said companies. Bond ratings are much more transparent than some "profit graph."

whoman69
12-01-2012, 12:57 PM
I don't have a problem with outsourcing. Outsourcing is a great thing. It means we get better prices. The theory of comparative advantage (in economics) is that if your country isn't great at making it, they should rely on another country to do it cheaper.

Rather than worry about outsourcing jobs, we should be encouraging the innovation that creates jobs that are uniquely American.

That whole thing is bull. We've been fed this line that Americans can't make good products. What is to stop those "uniquely American" jobs from being sent overseas too?

Fish
12-01-2012, 01:08 PM
Yeah, herp derp. A thread about corporations making profits and your response is "herp derp, CEOs HOSTESS!" You sound like a bumper sticker. "CEOS AND GREED AND LOOK AT ALL THAT MONEY THAT CEO MAKES HERP DERP!"
You're apparently under the impression that these companies making profits should just run out and spend the money on what?

Guess what? If you're sitting around waiting for some CEO to take a pay cut to improve your life you're a sap. And if you think we're going to ever end up in some pollyanna universe where you can count on working for a company for 40 years, getting a pay raise every year, and then retiring on a pension then you're sucker. You might as well long for the days of cassette tapes, because those days are gone. You can spend your life crying about CEOs all you want.

Your response is tough luck. That's classy. The US economy is a crumbling pile of shit, and you reply with "Quit crying, that's the way it is." Great plan to make things better.

Corporations have gotten all sorts of incentives over the last few decades because supposedly they were the job creators and the force behind the economy. Since Reagon, the government has lowered regulations and taxes to encourage free trade and get out of the market's way. Things like removing regulations like Glass-Steagall were meant to give corps freedom to grow the US economy. But here we are decades later, economy in complete shambles, record unemployment, outsourcing of jobs, poor US manufacturing, complete shit housing market, gazillion dollars in debt. All the lowering of taxes and regulations, and corporations have contributed little in return other than making the 1% at the top filthy rich while destroying small business nationwide and laying off the majority of US workers. Creating the most drastic income inequality in the world, and giving a bleak future to our next generation.

We've given corporations everything they've wanted for several decades. And what have they contributed back into the US market that they're taking advantage of? Jobs? Nope. Reinvestment? Nope. Further US development? Nope.

The current system doesn't help you. Still unsure why you're defending it. You can't come up with a single reason why this kind of capitalism is good for America as a whole. I've asked you multiple times, but you can't provide any answer. All you can do is blindly defend a minority of billionaires that you'll never be a part of. Ever.

This system doesn't help either of us. The only difference between our positions is that you're accepting the destruction of our economy thinking that nothing can be done to change it.

Easy 6
12-01-2012, 03:54 PM
Your response is tough luck. That's classy. The US economy is a crumbling pile of shit, and you reply with "Quit crying, that's the way it is." Great plan to make things better.

Corporations have gotten all sorts of incentives over the last few decades because supposedly they were the job creators and the force behind the economy. Since Reagon, the government has lowered regulations and taxes to encourage free trade and get out of the market's way. Things like removing regulations like Glass-Steagall were meant to give corps freedom to grow the US economy. But here we are decades later, economy in complete shambles, record unemployment, outsourcing of jobs, poor US manufacturing, complete shit housing market, gazillion dollars in debt. All the lowering of taxes and regulations, and corporations have contributed little in return other than making the 1% at the top filthy rich while destroying small business nationwide and laying off the majority of US workers. Creating the most drastic income inequality in the world, and giving a bleak future to our next generation.

We've given corporations everything they've wanted for several decades. And what have they contributed back into the US market that they're taking advantage of? Jobs? Nope. Reinvestment? Nope. Further US development? Nope.

The current system doesn't help you. Still unsure why you're defending it. You can't come up with a single reason why this kind of capitalism is good for America as a whole. I've asked you multiple times, but you can't provide any answer. All you can do is blindly defend a minority of billionaires that you'll never be a part of. Ever.

This system doesn't help either of us. The only difference between our positions is that you're accepting the destruction of our economy thinking that nothing can be done to change it.

:bravo:

Mr. Flopnuts
12-01-2012, 04:06 PM
Your response is tough luck. That's classy. The US economy is a crumbling pile of shit, and you reply with "Quit crying, that's the way it is." Great plan to make things better.

Corporations have gotten all sorts of incentives over the last few decades because supposedly they were the job creators and the force behind the economy. Since Reagon, the government has lowered regulations and taxes to encourage free trade and get out of the market's way. Things like removing regulations like Glass-Steagall were meant to give corps freedom to grow the US economy. But here we are decades later, economy in complete shambles, record unemployment, outsourcing of jobs, poor US manufacturing, complete shit housing market, gazillion dollars in debt. All the lowering of taxes and regulations, and corporations have contributed little in return other than making the 1% at the top filthy rich while destroying small business nationwide and laying off the majority of US workers. Creating the most drastic income inequality in the world, and giving a bleak future to our next generation.

We've given corporations everything they've wanted for several decades. And what have they contributed back into the US market that they're taking advantage of? Jobs? Nope. Reinvestment? Nope. Further US development? Nope.

The current system doesn't help you. Still unsure why you're defending it. You can't come up with a single reason why this kind of capitalism is good for America as a whole. I've asked you multiple times, but you can't provide any answer. All you can do is blindly defend a minority of billionaires that you'll never be a part of. Ever.

This system doesn't help either of us. The only difference between our positions is that you're accepting the destruction of our economy thinking that nothing can be done to change it.

BOOM!

Calcountry
12-01-2012, 04:35 PM
This is something I'd like to see your explanations on.

Corporations are recording record profits in 2012. Not good profits, record profits.

And yet our economy struggles at a little under 3% growth and a high unemployment rate.

Why, in your opinion, is the economy so bad yet businesses are doing so great?

http://economix.blogs.nytimes.com/2012/11/29/record-corporate-profits/

Record Corporate Profits
United States corporate profits reached a record high in the third quarter of this year, even adjusted for inflation, according to a report from the Bureau of Economic Analysis.
By CATHERINE RAMPELL
November 29, 2012, 3:00 pm

http://graphics8.nytimes.com/images/2012/11/29/business/economy/economix-29corpprofitstotal/economix-29corpprofitstotal-blog480.jpg

The increase from the second quarter was entirely a result of stronger business at home. Profits received from American-owned businesses abroad fell slightly in the third quarter, which may not be surprising given the recession in Europe and the slowdown in China.

Additionally, all of the growth in domestic corporate profits was accounted for by the financial sector.

Domestic profits of financial corporations rose $71.3 billion in the third quarter, after falling $39.7 billion in the second. Domestic profits of nonfinancial corporations, on the other hand, decreased $1 billion in the third quarter, after rising $27.8 billion in the second quarter.

http://graphics8.nytimes.com/images/2012/11/29/business/economy/economix-19financialnonfinancialcorpprofits/economix-19financialnonfinancialcorpprofits-blog480-v2.jpgI have a BA in economics and 25 years of experience in Business. I wouldn't give you two rats asses let alone an explanation.

whoman69
12-01-2012, 07:11 PM
I have a BA in economics and 25 years of experience in Business. I wouldn't give you two rats asses let alone an explanation.

So you got yours and fug everyone else is the answer.

blaise
12-01-2012, 07:30 PM
Your response is tough luck. That's classy. The US economy is a crumbling pile of shit, and you reply with "Quit crying, that's the way it is." Great plan to make things better.

Corporations have gotten all sorts of incentives over the last few decades because supposedly they were the job creators and the force behind the economy. Since Reagon, the government has lowered regulations and taxes to encourage free trade and get out of the market's way. Things like removing regulations like Glass-Steagall were meant to give corps freedom to grow the US economy. But here we are decades later, economy in complete shambles, record unemployment, outsourcing of jobs, poor US manufacturing, complete shit housing market, gazillion dollars in debt. All the lowering of taxes and regulations, and corporations have contributed little in return other than making the 1% at the top filthy rich while destroying small business nationwide and laying off the majority of US workers. Creating the most drastic income inequality in the world, and giving a bleak future to our next generation.

We've given corporations everything they've wanted for several decades. And what have they contributed back into the US market that they're taking advantage of? Jobs? Nope. Reinvestment? Nope. Further US development? Nope.

The current system doesn't help you. Still unsure why you're defending it. You can't come up with a single reason why this kind of capitalism is good for America as a whole. I've asked you multiple times, but you can't provide any answer. All you can do is blindly defend a minority of billionaires that you'll never be a part of. Ever.

This system doesn't help either of us. The only difference between our positions is that you're accepting the destruction of our economy thinking that nothing can be done to change it.

No, my response isn't, "tough luck." You're the one suggesting the corporations in question here; the ones in the OP, are handling profits in an unethical manner. What specifically are you saying the corporations in question should spend that money on?

I'm not defending anything. You're the one making a judgement on their profits. If that's the case then state what they should be doing, specifically, with their money that they're currently keeping as profits.

Aside from general BS like, "put it back in the economy."

blaise
12-01-2012, 07:30 PM
BOOM!

BOOM! what? A bunch of generic BS?

HonestChieffan
12-01-2012, 07:45 PM
Would all you corp bashers feel better if corporations were all in the tank, layoffs like crazy, stockholders losing their investments? Wtf is wrong with you morons? Do you look at your 401k and pick companies to invest in that are losing money?

Brock
12-01-2012, 08:29 PM
Would all you corp bashers feel better if corporations were all in the tank, layoffs like crazy, stockholders losing their investments? Wtf is wrong with you morons? Do you look at your 401k and pick companies to invest in that are losing money?

WTF are you babbling about? They ARE laying off like crazy.

|Zach|
12-01-2012, 09:20 PM
No, my response isn't, "tough luck." You're the one suggesting the corporations in question here; the ones in the OP, are handling profits in an unethical manner. What specifically are you saying the corporations in question should spend that money on?

I'm not defending anything. You're the one making a judgement on their profits. If that's the case then state what they should be doing, specifically, with their money that they're currently keeping as profits.

Aside from general BS like, "put it back in the economy."

I don't generally disagree with you. Companies don't really "owe" anything. They are separate entities beholden to their own interests and not for the greater good.

But what all of this news does is make me continually roll my eyes at this narrative that the big bad business hating Obama administration is this killer of businesses...this free market hating monster that hates profits and...I don't know there is a lot of hyperbole it goes on from there.

Good businesses get praised for personal responsibility and being smart! Bad businesses get to blame Obama or the government for their own failures in the free market.

The free market can be a cruel bitch but the left always gets cast as the villain for some reason.

It is a troublesome thing to think about because I see both sides. I agree companies are free to do whatever is in their best interest because they have earned that...but Fish is damn right...we lay out the red carpet for them...our municipalities bend over backwards for them (a lot of times at their own peril) and everyones return for that has been a shit sandwich.

Taco John
12-01-2012, 10:11 PM
It's really simple. Businesses have cut all the fat they possibly could. Doing this has streamlined their businesses and made their margins really good. Now the question is about reinvesting - how do you keep the good margins while re-investing and growing your business. Like it or not, businesses do not feel good about reinvesting under an Obama administration. The perception, whether you agree or not, is that it is much higher risk because of the amount of overhead that is involved now with such things as Obamacare. So, instead, businesses are prioritizing on how to deal with the new regulations BEFORE they reinvest. This means finding out where they can cut more, and find new efficiencies. We're probably looking at a two year cycle here as they adjust. After that two year cycle, I think we'll start to see some businesses have built up enough comfort in the new environment to start to hire again. I don't think it will be gang busters, by any stretch. It'll be a trickle. There's not a lot of room for error when you have regulations like Obamacare sitting on your margins. The comeback will be cautious.

Easy 6
12-01-2012, 10:13 PM
Would all you corp bashers feel better if corporations were all in the tank, layoffs like crazy, stockholders losing their investments? Wtf is wrong with you morons? Do you look at your 401k and pick companies to invest in that are losing money?

Well, if the All Holy Stockholders dont care what their big profits do to the buying/creating power of their own country, selling out to the cheapest bidder at every turn, hoping the megarich will spread their crumbs around this country, not dodging taxes at every turn and raising their already generous personal benefits, then **** them AND their beloved shareholders.

As blaise said "they have no obligation to employ the American workforce"... welp, yeah... WHO NEEDS AMERICA ANYWAY, I HAVE BIG MONEY!

Taco John
12-01-2012, 10:29 PM
Well, if the All Holy Stockholders dont care what their big profits do to the buying/creating power of their own country, selling out to the cheapest bidder at every turn, hoping the megarich will spread their crumbs around this country, not dodging taxes at every turn and raising their already generous personal benefits, then **** them AND their beloved shareholders.

As blaise said "they have no obligation to employ the American workforce"... welp, yeah... WHO NEEDS AMERICA ANYWAY, I HAVE BIG MONEY!

I wonder what you think you accomplish for your argument when you say things like "all holy stockholders."

You're talking about American people. You're talking about their mutual bonds. Their pensions. Their 401Ks. Their retirement plans. And you're telling them to F*** off? You clearly don't have any grasp of the subject. You're like the proverbial blind man with one hand on the elephant.

Easy 6
12-01-2012, 11:17 PM
I wonder what you think you accomplish for your argument when you say things like "all holy stockholders."

You're talking about American people. You're talking about their mutual bonds. Their pensions. Their 401Ks. Their retirement plans. And you're telling them to F*** off? You clearly don't have any grasp of the subject. You're like the proverbial blind man with one hand on the elephant.

As long as china can do it cheaper, i'm in.

You go, ayn rand fan.

Taco John
12-02-2012, 12:09 AM
whatever that means...

chiefzilla1501
12-02-2012, 12:13 AM
It's really simple. Businesses have cut all the fat they possibly could. Doing this has streamlined their businesses and made their margins really good. Now the question is about reinvesting - how do you keep the good margins while re-investing and growing your business. Like it or not, businesses do not feel good about reinvesting under an Obama administration. The perception, whether you agree or not, is that it is much higher risk because of the amount of overhead that is involved now with such things as Obamacare. So, instead, businesses are prioritizing on how to deal with the new regulations BEFORE they reinvest. This means finding out where they can cut more, and find new efficiencies. We're probably looking at a two year cycle here as they adjust. After that two year cycle, I think we'll start to see some businesses have built up enough comfort in the new environment to start to hire again. I don't think it will be gang busters, by any stretch. It'll be a trickle. There's not a lot of room for error when you have regulations like Obamacare sitting on your margins. The comeback will be cautious.

You are oversimplifying. Big time.

This isn't hard to understand. Executives are hoarding cash. They're cutting back workers, scaling back costs, NOT re-investing back into the company, yet are themselves making much more money.

When executive compensation goes up, that cuts back their margins.

Yes, I agree with curbing regulation and I don't agree with Obamacare. But let's stop using that as an excuse. If corporations were truly worried about cutting back costs, they'd not only cut back on their company, but at least keep executive compensation flat.

chiefzilla1501
12-02-2012, 12:15 AM
I don't generally disagree with you. Companies don't really "owe" anything. They are separate entities beholden to their own interests and not for the greater good.

But what all of this news does is make me continually roll my eyes at this narrative that the big bad business hating Obama administration is this killer of businesses...this free market hating monster that hates profits and...I don't know there is a lot of hyperbole it goes on from there.

Good businesses get praised for personal responsibility and being smart! Bad businesses get to blame Obama or the government for their own failures in the free market.

The free market can be a cruel bitch but the left always gets cast as the villain for some reason.

It is a troublesome thing to think about because I see both sides. I agree companies are free to do whatever is in their best interest because they have earned that...but Fish is damn right...we lay out the red carpet for them...our municipalities bend over backwards for them (a lot of times at their own peril) and everyones return for that has been a shit sandwich.

Obama is a killer of businesses. Moreso on the small business side, but a killer nonetheless. The private sector is doing okay in spite of Obama. But that doesn't mean we should make excuses for corporate greed, as we do in this thread.

Xanathol
12-02-2012, 12:15 AM
To the OP, why are you surprised by this? Some of the largest corporations in America backed Obama during his first campaign. As per Banking On Becoming President (http://www.opensecrets.org/pres08/contrib.php?cid=N00009638&cycle=2008):

University of California $1,648,685
Goldman Sachs $1,013,091
Harvard University $878,164
Microsoft Corp $852,167
Google Inc $814,540
JPMorgan Chase & Co $808,799
Citigroup Inc $736,771
Time Warner $624,618
Sidley Austin LLP $600,298
Stanford University $595,716
National Amusements Inc $563,798
WilmerHale LLP $550,668
Columbia University $547,852
Skadden, Arps et al $543,539
UBS AG $532,674
IBM Corp $532,372
General Electric $529,855
US Government $513,308
Morgan Stanley $512,232
Latham & Watkins $503,295

The question you need to ask yourself is "if these are the big bad greedy corporations and they are backing Obama, then is Obama really for the people or for the big bad businesses?" You can't have it both ways - either the "greedy corporations" are actually humanitarians or Obama is full of crap when he says he is against big business and for the people.

Radar Chief
12-02-2012, 09:16 AM
The current system doesn't help you. Still unsure why you're defending it. You can't come up with a single reason why this kind of capitalism is good for America as a whole. I've asked you multiple times, but you can't provide any answer. All you can do is blindly defend a minority of billionaires that you'll never be a part of. Ever.

So I take it you have your paycheck signed for and handed to you by a poor person?
If corporations get blame for the recession do they also get credit for the massive, record setting expansion that preceded it?

Radar Chief
12-02-2012, 09:17 AM
BOOM!

More like fizzle plop.
But I understand ranting about the corporate boogeyman sells in today's political climate.

chiefzilla1501
12-02-2012, 09:53 AM
So I take it you have your paycheck signed for and handed to you by a poor person?
If corporations get blame for the recession do they also get credit for the massive, record setting expansion that preceded it?

Somewhere along the line, executives lost themselves. They no longer serve their shareholders or act in the best interest of the corporation they work for. They are more interested in serving their own self-interest. The former expansion has a lot to do with opening up global markets (political decision), significant de-regulation which inspired wildly unethical practices that contributed to the massive economic collapse, and a massive tech boom as the world became more digital. No, not all corporations were bad during this time, but the bad ones massively contributed to the economic downturn.

Guys, this isn't rocket science. Corporations are laying off workers and our economy is in a massive recession, yet executive paychecks are going up.

I love the private sector and corporations. But good god, you can support corporations and not be blind to how wildly out of control executive compensation has become.

blaise
12-02-2012, 10:13 AM
More like fizzle plop.
But I understand ranting about the corporate boogeyman sells in today's political climate.

A bunch of buzzwords and generic phrases causes emotional responses in some.
It's akin to others starting a thread about a crime, or some bizarre incident at a school and saying it indicates the country is going down the toilet.

"CORPORATIOSNA ND GREED AND BAD!"

Bump
12-02-2012, 10:46 AM
Would all you corp bashers feel better if corporations were all in the tank, layoffs like crazy, stockholders losing their investments? Wtf is wrong with you morons? Do you look at your 401k and pick companies to invest in that are losing money?

what is wrong with you?

When people realize the damage huge greedy corporations have done and continue to do, then maybe something can be done about it.

Radar Chief
12-02-2012, 11:04 AM
Somewhere along the line, executives lost themselves. They no longer serve their shareholders or act in the best interest of the corporation they work for. They are more interested in serving their own self-interest.

Sounds to me that they're the same as they always have been, but your "no longer serve their shareholders" comment is way off the mark. If the shareholders aren't seeing a profit those executives will be shown the door, granted with a golden parachute but still out of work.
IMO what we're seeing is fewer companies owned by an individual and more run by a board of investors. That's why they're less concerned with a companies long term health as much as they are the quarterly report.

HonestChieffan
12-02-2012, 01:43 PM
what is wrong with you?

When people realize the damage huge greedy corporations have done and continue to do, then maybe something can be done about it.

What is this "damage"? They pay the CEO too much? Or is this a Walmart is bad cause they get real big? And what is this "done about it"? Shall we break up GE? Maybe go after Apple? Make apple form multiple small companies? Im always interested in these threads cause they almost never have anything actionable or even close to specifics. Rage against the man is the norm and rage against what the top guy gets paid. Garbage.

Business functions to make, market, sell something for a profit and if they sell a lot of it they make a lot of profit. If they make crap, and manage like monkeys, they go broke. Go get a job with a company that fits your desires...small, unprofitable, and slowly dying. That will work well.

Bump
12-02-2012, 02:55 PM
What is this "damage"? They pay the CEO too much? Or is this a Walmart is bad cause they get real big? And what is this "done about it"? Shall we break up GE? Maybe go after Apple? Make apple form multiple small companies? Im always interested in these threads cause they almost never have anything actionable or even close to specifics. Rage against the man is the norm and rage against what the top guy gets paid. Garbage.

Business functions to make, market, sell something for a profit and if they sell a lot of it they make a lot of profit. If they make crap, and manage like monkeys, they go broke. Go get a job with a company that fits your desires...small, unprofitable, and slowly dying. That will work well.

ya you are right. There are no problems, everything is perfect in 'Merica. GOD BLESS IT

chiefzilla1501
12-02-2012, 03:56 PM
Sounds to me that they're the same as they always have been, but your "no longer serve their shareholders" comment is way off the mark. If the shareholders aren't seeing a profit those executives will be shown the door, granted with a golden parachute but still out of work.
IMO what we're seeing is fewer companies owned by an individual and more run by a board of investors. That's why they're less concerned with a companies long term health as much as they are the quarterly report.

Like I said, the biggest problem is compensation structures. The boards aren't always in alignment with the shareholders. They push for short-term targets and punish investment, or they are so in bed with executives that they let executives essentially raid the company of money they didn't earn. My biggest concern is compensation structure.

That and there is no downside risk. It is absolutely unfathomable that a CEO can make insane bonus money in a year where the company struggles financially.

But let's not downplay the role of greed. There are lots of CEOs who have cooshy long-term situations but still hoard cash because they know they can get away with it. There are other CEOs who will doctor books or push short-term profit boosters so they can boost their own pay. There are lots of corporations where executives are given a decision between making decisions that benefits the company and their shareholders, and making decisions that will boost their own income. And too many times they are making decisions on personal interest rather than the companies they serve. That is a tremendous shame.

chiefzilla1501
12-02-2012, 04:18 PM
What is this "damage"? They pay the CEO too much? Or is this a Walmart is bad cause they get real big? And what is this "done about it"? Shall we break up GE? Maybe go after Apple? Make apple form multiple small companies? Im always interested in these threads cause they almost never have anything actionable or even close to specifics. Rage against the man is the norm and rage against what the top guy gets paid. Garbage.
Why are you bringing up successful companies? I have no problem paying executives that are successful. Strange you didn't bring up Hostess, who instead of investing in marketing, technology, new plants, etc... chose to pad their executive salaries while the company was bleeding money. Strange you don't bring up JP Morgan, whose executives are likely to earn flat or increased compensation despite making a string of unethical decisions that led to a $6 billion loss. Strange that people complain about regulation yet naively ignore the massive financial cost incurred by financial services firms either trying to game the system or cheat it.

No executive should be getting raises when the rest of the company is cutting costs or losing money. That is not a hard concept to grasp. It is driven by greed and by executives getting preferential treatment from their boards and by shitty compensation structures. You wanted solutions? We've presented plenty. Stop letting boards have so much power to determine compensation and allow shareholders a bigger voice. Stop jamming short-term incentives on executives that encourage behaviors that threaten a company's long-term health. Stop inflating executive salaries when they aren't performance-based.

Business functions to make, market, sell something for a profit and if they sell a lot of it they make a lot of profit. If they make crap, and manage like monkeys, they go broke. Go get a job with a company that fits your desires...small, unprofitable, and slowly dying. That will work well.
This is a very naive view of the business world.

There is more to business than profits and it's exactly this ridiculous short-term orientation that is causing our economic mess and is leading to more smaller, unprofitable, slowly dying businesses. So you are essentially bagging on someone for valuing a dying business model, and then recommend that they adopt a dying business model of their own.

morphius
12-02-2012, 07:02 PM
There is no easy answer as it is sort of an "all of the above" answer. Greed of course plays a part of it, answering to stock holders on why you are not making as much per customer as any of your competition each and every quarter is part of it, rising health care costs for employees, unknown tax questions, unknown effects of Obama Care, outsourcing sounds cheaper. Very, very few companies feel any obligation to try to make the US a better country.

Mr. Flopnuts
12-02-2012, 08:05 PM
Let's just go back to 90%. Fuck it.

HonestChieffan
12-02-2012, 08:51 PM
Why are you bringing up successful companies?

That is what the OP was about. "Why are corporations doing so well as the economy struggles". Hostess was not a successful company for many years.

ChiefsandO'sfan
12-03-2012, 12:53 PM
Obama kills Keystone pipeline - Oil moves less efficiently, on BNSF Raiilway - Warren Buffett owns BNSF- He profits, we pay more.

chiefzilla1501
12-03-2012, 03:22 PM
That is what the OP was about. "Why are corporations doing so well as the economy struggles". Hostess was not a successful company for many years.

It depends on your definition of success. Cutting costs, not hiring workers, and scaling back investment is not success. Profit boosts from government handouts or favorable policy is not success.

Success is when companies start feeling confident enough to invest back into their company, and still experience growth. I can assue you that the majority of the people that work for a lot of these companies that are supposedly profitable don't feel like their company is at all successful.

Fish
12-03-2012, 04:28 PM
So I take it you have your paycheck signed for and handed to you by a poor person?
If corporations get blame for the recession do they also get credit for the massive, record setting expansion that preceded it?

Huh? I don't understand what you mean. Why would I need my paycheck signed by a poor person? That doesn't make any sense.

Here's what I see:

Corporations have been given massive tax breaks and lack of regulation for several decades. It went way up under Reagon, slightly down under Clinton, then way back up under Bush. All this was done with the idea that these corporations would grow the economy better without oversight from the government.

But what's happened?

Instead of creating jobs, or reinvesting money, or expanding US development, these corporations have instead created the greatest income inequality that the world has ever seen.

CEO-to-worker compensation ratio, with options granted and options realized,1965–2011
http://img163.imageshack.us/img163/9499/ib331figureapng.png

Source: http://www.epi.org/publication/ib331-ceo-pay-top-1-percent/

From 1978 to 2011, CEO compensation increased more than 725 percent, a rise substantially greater than stock market growth and the painfully slow 5.7 percent growth in worker compensation over the same period.

Using a measure of CEO compensation that includes the value of stock options granted to an executive, the CEO-to-worker compensation ratio was 18.3-to-1 in 1965, peaked at 411.3-to-1 in 2000, and sits at 209.4-to-1 in 2011.

Using an alternative measure of CEO compensation that includes the value of stock options exercised in a given year, CEOs earned 20.1 times more than typical workers in 1965, 383.4 times more in 2000, and 231.0 times more in 2011.

So yes, corporations get credit for growing the economy around the turn of the century. But what can you say they've done since then?

They've had an incredible advantage for a long time. So why are we in an economic crisis? We've given corporations all these incentives, yet when things get tough, they have mass layoffs and hoard the money, while retaining executive pay that's well over 200% more than its workers.

I'll ask you the same question that blaise never could or would answer.... How is this practice good for America? In what ways does this type of capitalism help the US economy?

chiefzilla1501
12-03-2012, 04:43 PM
Huh? I don't understand what you mean. Why would I need my paycheck signed by a poor person? That doesn't make any sense.

Here's what I see:

Corporations have been given massive tax breaks and lack of regulation for several decades. It went way up under Reagon, slightly down under Clinton, then way back up under Bush. All this was done with the idea that these corporations would better grow the economy better without oversight from the government.

But what's happened?

Instead of creating jobs, or reinvesting money, or expanding US development, these corporations have instead created the greatest income inequality that the world has ever seen.

CEO-to-worker compensation ratio, with options granted and options realized,1965–2011
http://img163.imageshack.us/img163/9499/ib331figureapng.png

Source: http://www.epi.org/publication/ib331-ceo-pay-top-1-percent/

From 1978 to 2011, CEO compensation increased more than 725 percent, a rise substantially greater than stock market growth and the painfully slow 5.7 percent growth in worker compensation over the same period.

Using a measure of CEO compensation that includes the value of stock options granted to an executive, the CEO-to-worker compensation ratio was 18.3-to-1 in 1965, peaked at 411.3-to-1 in 2000, and sits at 209.4-to-1 in 2011.

Using an alternative measure of CEO compensation that includes the value of stock options exercised in a given year, CEOs earned 20.1 times more than typical workers in 1965, 383.4 times more in 2000, and 231.0 times more in 2011.

So yes, corporations get credit for growing the economy around the turn of the century. But what can you say they've done since then?

They've had an incredible advantage for a long time. So why are we in an economic crisis? We've given corporations all these incentives, yet when things get tough, they have mass layoffs and hoard the money, while retaining executive pay that's well over 200% than its workers.

I'll ask you the same question that blaise never could or would answer.... How is this practice good for America? In what ways does this type of capitalism help the US economy?

Capitalism is great for the US economy. In my opinion, the private sector SHOULD be the engine of the economy, but not if corporate greed leads to executives hoarding cash. Which is what's happening today.

I don't know why this is a hard concept for people to grasp. Executive compensation is a COST, not an expense. Which means that when executive compensation goes up, cost goes up. It is hypocritical for businesses to cut costs across the board, then significantly jack up compensation costs for a few. The kicker is... while investing a million dollar in new technology is an expense that improves your chances of making more revenue, investing a million dollars in a CEO bonus gives you the same CEO you had 10 years ago, but for a higher cost. And raising executive compensation to astronomical heights during a recession is just outrageous -- compensation should be performance-based, not reward those who lose.

This isn't good for America. And it's not because corporations are "evil." I support corporations, but they have to stop serving the interest of the executives who run it and go back to serving the interest of the corporations those executives are supposed to be representing.

HonestChieffan
12-03-2012, 05:08 PM
It depends on your definition of success. Cutting costs, not hiring workers, and scaling back investment is not success. Profit boosts from government handouts or favorable policy is not success.

Success is when companies start feeling confident enough to invest back into their company, and still experience growth. I can assue you that the majority of the people that work for a lot of these companies that are supposedly profitable don't feel like their company is at all successful.

Couple questions without getting too personal...

Do you now or have you ever owned a business that has more than yourself as an employee?

Have you at any time worked for a large company in a management role that gave you financial decision making responsibility?

Have you or are you now responsible for a profit and loss statement? Do you or have you ever had to detail a bank or a board on the annual plans for a business and how that relates to a long term plan?

Now that that is out of the way, you can define success as you like. For most businesses, success is a mater of year to year survival, generating enough profit to compensate ownership at a level that makes them want to continue the business another year. Lots of small companies have 3 to 5 year plans but they deal with annual issues that drive the business. These people are currently in that group that likely has been hurt by the recession and have very real concerns about an unknown cost structure due to ObamaCare and tax treatments of expenses, depreciation, investments in new equipment and maintaining inventories. You can bet, and you know, these companies from two to probably 50 or 70 employees are not hiring, they are repairing not replacing, they have slashed inventories, and are doing more with less at all levels.

Take that to a major fortune 500. These companies operate, or at least the two I spent 30 years working for, on a very bottom up management of their divisions and markets. Any department is under intense pressure to achieve the annual plan set for that department. My experience was in sales and in marketing. I managed a $42 million dollar business. I had sales people and was responsible for expense management as well as people management. Over the span of my career we went through a number of downturns.

In those downturns we knew it was coming. The successful managers were those who sized the salesforce and expense loads such that people were not laid off. No one wants to lay off people who you have invested in training and who have built relationships at customer levels and internally. But sometimes it happens. You cut staff, you cut spending, you delay expenses. Company cars are driven 100000 miles where in the great times they were traded at 48000. And managers took on more people, more area, more responsibility and a few times raises were put on hold.

As a result, we made our goals, we actually came out stronger, more profitable, and better prepared not just for the growth times but for the next downturn.

Success in bad periods is a matter of survival, not spending, retaining profits, and building cash reserves. You grow the business in the up times and you protect the future business in downtimes. No business invests in expansion unless they have solid evidence that they are in fact experiencing demand for what they sell or do that justifies investment. And no business is going to spend on expansion until they know what the return to the business is going to be.

If an employee of any company does not understand why the company is making the decisions they are making, its managements fault for not developing an understanding of the companies goals, plans, outlook and the state of the industry they are in. Or its the employees fault for not listening when it is explained. Some people never do develop that understanding and often are unhappy a lot of the time. Those who are the worst at that are often the ones who have a new opportunity presented to them to find a job that makes them happy.

chiefzilla1501
12-03-2012, 05:47 PM
Couple questions without getting too personal...

Do you now or have you ever owned a business that has more than yourself as an employee?

Have you at any time worked for a large company in a management role that gave you financial decision making responsibility?

Have you or are you now responsible for a profit and loss statement? Do you or have you ever had to detail a bank or a board on the annual plans for a business and how that relates to a long term plan?
No, I have not worked in a small business. Most of my time has been in the private sector. Yes, I have owned a P&L and a strategic plan/budget. Yes, I love working for a corporation and I love my job. I think most managers do a very good job of running their business units or at least try to. A lot of corporations function nicely, except the part where executives are creating top-down decisions that are based on self-interests instead of what's best for their corporation. incidentally, I don't feel that way where I work, but think it's prevalent lots of places where it shouldn't be.

Now that that is out of the way, you can define success as you like. For most businesses, success is a mater of year to year survival, generating enough profit to compensate ownership at a level that makes them want to continue the business another year. Lots of small companies have 3 to 5 year plans but they deal with annual issues that drive the business. These people are currently in that group that likely has been hurt by the recession and have very real concerns about an unknown cost structure due to ObamaCare and tax treatments of expenses, depreciation, investments in new equipment and maintaining inventories. You can bet, and you know, these companies from two to probably 50 or 70 employees are not hiring, they are repairing not replacing, they have slashed inventories, and are doing more with less at all levels.
Regulation is necessary to some extent, but I generally want the government to back off. I would back tax cuts if I felt they would be invested back into the business. That's not happening. You can't give a sob story about an executive forced to make cuts when he/she is simultaneously in cahoots with boards that are driving their compensation up at a disproportionate rate. If they really cared about the success of their company, it is outrageous that at a time when they're cutting costs to "better" their company that they're adding a shitload of cost to line their own pockets.

Take that to a major fortune 500. These companies operate, or at least the two I spent 30 years working for, on a very bottom up management of their divisions and markets. Any department is under intense pressure to achieve the annual plan set for that department. My experience was in sales and in marketing. I managed a $42 million dollar business. I had sales people and was responsible for expense management as well as people management. Over the span of my career we went through a number of downturns.
I am in strategy/marketing. I know I am limited by what is allocated to me. It is ridiculous to cripple our sales force with poor technology while the company is sitting on cash. When your executives get paid disproportionately more, that forces your business units to do more with less. Every extra dollar a CEO makes is a dollar you could have spent on, for example, a marketing awareness campaign or a tech upgrade or a better sales commission.

In those downturns we knew it was coming. The successful managers were those who sized the salesforce and expense loads such that people were not laid off. No one wants to lay off people who you have invested in training and who have built relationships at customer levels and internally. But sometimes it happens. You cut staff, you cut spending, you delay expenses. Company cars are driven 100000 miles where in the great times they were traded at 48000. And managers took on more people, more area, more responsibility and a few times raises were put on hold.

As a result, we made our goals, we actually came out stronger, more profitable, and better prepared not just for the growth times but for the next downturn.

Success in bad periods is a matter of survival, not spending, retaining profits, and building cash reserves. You grow the business in the up times and you protect the future business in downtimes. No business invests in expansion unless they have solid evidence that they are in fact experiencing demand for what they sell or do that justifies investment. And no business is going to spend on expansion until they know what the return to the business is going to be.
What you are saying is the exact opposite of what is going on. Again, cost structures are going down but executive compensation is going up disproportionately. Investment back into the company is going down. Executives are hoarding cash, and they are bragging about having a ton of cash lying around that isn't being put back into the company. You don't have to invest in a new plant. You can invest in R&D. You can invest in employee training or engagement programs that improve your retention rate. You can invest in new technology, because almost every company can improve. You can invest in marketing which has a long tail to it. This is all about opportunity cost. Again, think about how much MORE money executives are making and think about all the things those same dollars could have been invested back into the company for.

If an employee of any company does not understand why the company is making the decisions they are making, its managements fault for not developing an understanding of the companies goals, plans, outlook and the state of the industry they are in. Or its the employees fault for not listening when it is explained. Some people never do develop that understanding and often are unhappy a lot of the time. Those who are the worst at that are often the ones who have a new opportunity presented to them to find a job that makes them happy.
And the problem is that today's executive is rewarded for failure and short-term growth. They get handsomely rewarded for big profits, even if that meant they took a huge chunk out of R&D that makes them competitive 5 years from now. They get rewarded even for making massive mistakes, especially when you have the luxury of a golden parachute if you really screw up. This is messed up. Executive compensation needs to be based on LONG-TERM incentives and there has to be some way to lower the reward for failure.

mlyonsd
12-03-2012, 06:23 PM
Why is this still being discussed?

Corporations that offer wanted products and services have the resources to cut during down times and still survive.

Reducing their work forces, cutting benefits, stopping capital projects when their products and services are still needed will increase profits. It aint rocket science.

chiefzilla1501
12-03-2012, 06:26 PM
Why is this still being discussed?

Corporations that offer wanted products and services have the resources to cut during down times and still survive.

Reducing their work forces, cutting benefits, stopping capital projects when their products and services are still needed will increase profits. It aint rocket science.

Because the question is that when you're cutting costs, why are they adding disproportionate executive compensation costs simultaneously.

Because executives are serving their self interests instead of doing what's best for their corporation. And not even just a little bit. A lot.

mlyonsd
12-03-2012, 06:31 PM
Because the question is that when you're cutting costs, why are they adding disproportionate executive compensation costs simultaneously.

Because executives are serving their self interests instead of doing what's best for their corporation. And not even just a little bit. A lot.
I thought the question was why are corporations doing so well when the economy struggles.

You seem to be arguing a different question. And to that, I'd say the vast majority of executives whose corporations are flourishing have the company interests ahead of their own.

HonestChieffan
12-03-2012, 06:51 PM
I thought the question was why are corporations doing so well when the economy struggles.

You seem to be arguing a different question. And to that, I'd say the vast majority of executives whose corporations are flourishing have the company interests ahead of their own.


This is his issue. Cant argue his pov. He thinks CEOs get paid too much. Simple opinion, thats cool. Obviously the Board of Directors see it quite different.

Garcia Bronco
12-03-2012, 07:17 PM
(Technology + Automation)innovation = jobless recovery


The economy is/has shed jobs it should have lost sometime ago. Business can reach more customers from the above with less overhead.

Combine that with competing in a global market...man...people in the US will have to adjust.

chiefzilla1501
12-03-2012, 07:55 PM
I thought the question was why are corporations doing so well when the economy struggles.

You seem to be arguing a different question. And to that, I'd say the vast majority of executives whose corporations are flourishing have the company interests ahead of their own.

And I'm arguing... what is the definition of "flourishing"? Because their profits are up?

Meanwhile, our American businesses are getting crushed by foreign competition. These profits aren't being driven by American industry. It's being heavily driven by financial services. Thank God for Google and Apple, or we'd be getting annihilated in tech too. Because those are companies that value innovation and an unbelievable environment of R&D and test/learn.

I'm sorry. I get that companies have to cut expenses in a recession. But unless your business is one of the lowest cost in your industry, you have to win with value-add. If you're not going to offer the cheapest car, you sure as shit better find something about your car you can't find in a different car. The economy will never recover until we encourage innovation. That's not going to happen if the government punishes risk-takers, and it sure as shit isn't going to happen if executives hoard cash and try to boost their short-term paycheck at the expense of making their corporation competitive globally.

chiefzilla1501
12-03-2012, 07:57 PM
(Technology + Automation)innovation = jobless recovery


The economy is/has shed jobs it should have lost sometime ago. Business can reach more customers from the above with less overhead.

Combine that with competing in a global market...man...people in the US will have to adjust.

American businesses have to adjust too.

It's not that hard. If you give an executive a $5 million pay raise, what if you invested that into getting your technology up to global competition? What if you used that money to re-train your workers to adjust to the new economy?

But no. We continue to defend executives who are increasingly selfishly lining their pockets while their corporation becomes less competitive.

KCWolfman
12-03-2012, 10:48 PM
http://economistsview.typepad.com/timduy/2012/11/industrial-production-stalls.html

chiefzilla1501
12-03-2012, 11:04 PM
http://economistsview.typepad.com/timduy/2012/11/industrial-production-stalls.html

And again... it is hypocritical for executives to blame Europe or government when they are getting huge pay raises in an economy where everything is being cut back. It's like Jamie Dimon going on a rant about government regulation when his lack of oversight led to a freaking $6B loss to the company. Look, steroids need to be eliminated in the game of baseball, but I don't want to hear people like Barry Bonds complain about it.

KCWolfman
12-03-2012, 11:14 PM
And again... it is hypocritical for executives to blame Europe or government when they are getting huge pay raises in an economy where everything is being cut back. It's like Jamie Dimon going on a rant about government regulation when his lack of oversight led to a freaking $6B loss to the company. Look, steroids need to be eliminated in the game of baseball, but I don't want to hear people like Barry Bonds complain about it.

It's just as critical to blame ALL American corporations for a small percentages stupid decisions.

Corporations are not the Empire lead by a lightning bolt wielding old man with a hard breathing black masked thug crushing the American worker with his Force Choke.

In 2008, more than 1000 major US registered companies filed Chapter 11. Most American corporations are struggling to show a profit, just like the American family.

If people want to get angry about a corporation-like entity voting themselves huge bonuses while abusing the people who they represent - get pissed at your federal government. They are the ones spending money they don't have for stuff you don't want and taking more from you without your permission.

chiefzilla1501
12-04-2012, 06:26 AM
It's just as critical to blame ALL American corporations for a small percentages stupid decisions.

Corporations are not the Empire lead by a lightning bolt wielding old man with a hard breathing black masked thug crushing the American worker with his Force Choke.

In 2008, more than 1000 major US registered companies filed Chapter 11. Most American corporations are struggling to show a profit, just like the American family.

If people want to get angry about a corporation-like entity voting themselves huge bonuses while abusing the people who they represent - get pissed at your federal government. They are the ones spending money they don't have for stuff you don't want and taking more from you without your permission.

Executive compensation is up. Dramatically. That's not just a few corporations. That's the entire U.S. and this is all happening during a recession where most corporations are cutting costs.

And don't feed me the government spending spiel. I am much more conservative than I am liberal and dislike a lot of government spending and intervention. I don't know why people act like you have to choose which one is right, corporations or government. Isn't it possible that BOTH are responsible for problems facing America?

America used to be a global economic leader. We are losing our competitive edge. This doesn't represent a short-term problem. It's a long-term problem. Again, this is NOT a hard problem to grasp. Every extra dollar executives make could be going toward re-training and developing your employees, upgrading their technology, buying new plants, building a new retail location. People keep coming back with the excuse that CEOs aren't spending money because they're being conservative right now. B.S. They ARE spending money. They're spending it ON THEIR OWN SALARIES.

KCWolfman
12-04-2012, 06:40 AM
Executive compensation is up. Dramatically. That's not just a few corporations. That's the entire U.S. and this is all happening during a recession where most corporations are cutting costs.

And don't feed me the government spending spiel. I am much more conservative than I am liberal and dislike a lot of government spending and intervention. I don't know why people act like you have to choose which one is right, corporations or government. Isn't it possible that BOTH are responsible for problems facing America?

America used to be a global economic leader. We are losing our competitive edge. This doesn't represent a short-term problem. It's a long-term problem. Again, this is NOT a hard problem to grasp. Every extra dollar executives make could be going toward re-training and developing your employees, upgrading their technology, buying new plants, building a new retail location. People keep coming back with the excuse that CEOs aren't spending money because they're being conservative right now. B.S. They ARE spending money. They're spending it ON THEIR OWN SALARIES.
The "Entire US"? I would need some sort of verification on that statement. That is about as far fetched as it gets.

As far as corporations vs govt. You can control corporations immediately. You don't even need a bulletin board, just simply don't support the ones with which you disagree - pretty damned simple.

Government on the other hand takes time (and usually a revolution). I am more concerned about a government I can't control than a corporation I can.

KCWolfman
12-04-2012, 06:43 AM
This class warfare BS is old hat.

chiefzilla1501
12-04-2012, 06:57 AM
The "Entire US"? I would need some sort of verification on that statement. That is about as far fetched as it gets.

As far as corporations vs govt. You can control corporations immediately. You don't even need a bulletin board, just simply don't support the ones with which you disagree - pretty damned simple.

Government on the other hand takes time (and usually a revolution). I am more concerned about a government I can't control than a corporation I can.

Far fetched? Look up wage gaps, executive compensation (be sure to look at overall compensation including bonuses), and overall pay of executives not just ceo's.

I can't believe there are people in denial that executive pay is going up across the board.

chiefzilla1501
12-04-2012, 06:58 AM
This class warfare BS is old hat.

This isn't class warfare. This is about executives serving their corporation vs working their own self interests.

blaise
12-04-2012, 07:04 AM
This isn't class warfare. This is about executives serving their corporation vs working their own self interests.

I bet most executives serve their corporation first.

KCWolfman
12-04-2012, 08:56 AM
Far fetched? Look up wage gaps, executive compensation (be sure to look at overall compensation including bonuses), and overall pay of executives not just ceo's.

I can't believe there are people in denial that executive pay is going up across the board.

I would not be in denial if I had a viable source telling me EVERY corporation is increasing executive compensation to astronomical amounts. All it takes is a link to an unbiased source.

KCWolfman
12-04-2012, 09:04 AM
Kodak, Schwinn, Lehmann Brothers, Reader's Digest, Hostess have all declared bankruptcy over the last 3 years.

Cost Plus, Ram Energy, Crown Media, Thompson Reuters, Great Wolf Resorts, Dex One, Metalico, American Apparel, and Inventure Foods have all asked for a restructure review from the courts.

This doesn't support your wealthy eating poor people scenario at all.

chiefzilla1501
12-04-2012, 10:18 AM
I would not be in denial if I had a viable source telling me EVERY corporation is increasing executive compensation to astronomical amounts. All it takes is a link to an unbiased source.

Again... I seriously can't believe there are people who can't see the obvious here.

http://online.wsj.com/article/SB10001424052702304458604577490842584787190.html
http://www.haygroup.com/us/press/details.aspx?id=33833

What you see are two stories. Corporations were so oblivious that in 2010, in the midst of a recession, they raised executive compensation by 10%. This is MEDIAN value, not average value. So yes, this indicates that it's happening in lots of places, not just with a few bad apples. Secondly, what you're seeing is a trend where shareholders are putting more pressure on boards of directors to finally restructure executive pay. Good step, but why did it take this long? And how long before the boards and shareholders stop paying attention? And keep in mind that these increases are ON TOP of massive increases made to median compensation pay during recessionary years. Let that sink in. That while corporations were tanking during the recession, MEDIAN executive pay was hitting record level increases.

So good progress. But it has to keep going, and it's not nearly enough to balance the gap. The best corporations are the ones where boards heavily monitor the gap between executive and median wages. But many of them don't care. In fact, there are too many boards that are serving their executives instead of working on behalf of their shareholders.

La literatura
12-04-2012, 10:19 AM
chiefzilla is a communist. Kill him.

chiefzilla1501
12-04-2012, 10:25 AM
Kodak, Schwinn, Lehmann Brothers, Reader's Digest, Hostess have all declared bankruptcy over the last 3 years.

Cost Plus, Ram Energy, Crown Media, Thompson Reuters, Great Wolf Resorts, Dex One, Metalico, American Apparel, and Inventure Foods have all asked for a restructure review from the courts.

This doesn't support your wealthy eating poor people scenario at all.

Stop with the ridiculous accusation that I'm crying class warfare. I am talking about executives that have jobs and are working on behalf of their own self interests instead of the company they work for or the shareholders they serve.

I don't care about the wage gap. I'm not going to complain about Apple executive pay increases, which are based on performance AND are in addition to massive investments they are making to R&D and marketing. I am critical of executives who are raising their compensation by 10% while they are making cuts across the company and not investing in their companies, and the boards that enable that behavior.

La literatura
12-04-2012, 10:27 AM
Kodak, Schwinn, Lehmann Brothers, Reader's Digest, Hostess have all declared bankruptcy over the last 3 years.

Cost Plus, Ram Energy, Crown Media, Thompson Reuters, Great Wolf Resorts, Dex One, Metalico, American Apparel, and Inventure Foods have all asked for a restructure review from the courts.

This doesn't support your wealthy eating poor people scenario at all.

I'm not connecting the dots. How do bankruptcies go against his argument?

chiefzilla1501
12-04-2012, 10:28 AM
I bet most executives serve their corporation first.

Raising your compensation while you are asking all your division heads to make massive cuts (and then demanding that less people work more hours to drive even higher results on limited budgets) is NOT serving your corporation first. It's selfish.

If this behavior was going on and executive pay stayed flat, dropped, or increased moderately... fine. But instead, executives are making a strategic decision that rather than use an extra few million dollars to invest in their company, they are going to instead use it to fund a bonus increase for themselves.

HonestChieffan
12-04-2012, 10:33 AM
Raising your compensation while you are asking all your division heads to make massive cuts (and then demanding that less people work more hours to drive even higher results on limited budgets) is NOT serving your corporation first. It's selfish.

If this behavior was going on and executive pay stayed flat, dropped, or increased moderately... fine. But instead, executives are making a strategic decision that rather than use an extra few million dollars to invest in their company, they are going to instead use it to fund a bonus increase for themselves.


How wide spread is this behavior? Do you have some information on the ceo pay levels in various corporations and industries that show its widespread?

How many CEOs have taken a no raise or a reduction?

Is the data different for companies that are growing in profitability vs those flat or in a decline?


oops never mind. Here is a link to 2009 pay for CEOs. Looks like many actually did take a reduction.

http://usatoday30.usatoday.com/money/companies/management/2010-04-01-ceo-compensation-database_N.htm

chiefzilla1501
12-04-2012, 10:47 AM
How wide spread is this behavior? Do you have some information on the ceo pay levels in various corporations and industries that show its widespread?

How many CEOs have taken a no raise or a reduction?

Is the data different for companies that are growing in profitability vs those flat or in a decline?


oops never mind. Here is a link to 2009 pay for CEOs. Looks like many actually did take a reduction.

http://usatoday30.usatoday.com/money/companies/management/2010-04-01-ceo-compensation-database_N.htm

I have a lot more faith in the Wall Street Journal to get the story right, and they showed 10% increases on MEDIAN executive pay. Which means that even halfway down the list, you're seeing exorbitant pay increases. This wasn't based on average pay. Executive compensation has become so complicated that the source of data is pretty critical.

I don't know the answer to growing in profitability vs. those flat or in a decline. But given that this economy is in a recession and most companies heavily skew toward the latter, it should be unsettling that we're seeing pay increases at all, let along exorbitant increases.

And keep in mind... this is a minimum of what they're making. We're not factoring in things we may not realize they are making but were difficult to account for. And we're not even touching the key discussion point that many executives are paid on options, which means they make a shitload of money when their company grows and they make a lot of money if the company tanks too. So we're not even factoring in the economic impact of our executives gambling on decisions to boost their own pay -- that needs to be factored in to, because the risk of a bad decision becomes an added cost to the corporation.

HonestChieffan
12-04-2012, 10:59 AM
I have a lot more faith in the Wall Street Journal to get the story right, and they showed 10% increases on MEDIAN executive pay. Which means that even halfway down the list, you're seeing exorbitant pay increases. This wasn't based on average pay. Executive compensation has become so complicated that the source of data is pretty critical.

I don't know the answer to growing in profitability vs. those flat or in a decline. But given that this economy is in a recession and most companies heavily skew toward the latter, it should be unsettling that we're seeing pay increases at all, let along exorbitant increases.

And keep in mind... this is a minimum of what they're making. We're not factoring in things we may not realize they are making but were difficult to account for. And we're not even touching the key discussion point that many executives are paid on options, which means they make a shitload of money when their company grows and they make a lot of money if the company tanks too. So we're not even factoring in the economic impact of our executives gambling on decisions to boost their own pay -- that needs to be factored in to, because the risk of a bad decision becomes an added cost to the corporation.



Source of pay is easy to get to, its public information for publicly traded companies. You can go to the use link and pick by company and see the pay in total

chiefzilla1501
12-04-2012, 11:16 AM
Source of pay is easy to get to, its public information for publicly traded companies. You can go to the use link and pick by company and see the pay in total

How are you measuring options, including backdated options? Were they exercised? Are you factoring in long-term incentive payouts? Are you factoring in that at any point in time, the CEO can walk out the door and collect an astoundingly high golden parachute and retirement package EVEN IF THEY FAILED? Are you factoring in the 5-year cost the CEO incurs on the corporation for making a terrible long-term decision and then walking out before the decision actually negatively affects the company? What about perks, including non-related work expenses on the company dime?

On the surface alone... median pay is way up. Beneath the surface, there's a ton of that shit above that makes the problem even worse, because we're not even fully calculating the cost of executive compensation.

chiefzilla1501
12-04-2012, 11:25 AM
How are you measuring options, including backdated options? Were they exercised? Are you factoring in long-term incentive payouts? Are you factoring in that at any point in time, the CEO can walk out the door and collect an astoundingly high golden parachute and retirement package EVEN IF THEY FAILED? Are you factoring in the 5-year cost the CEO incurs on the corporation for making a terrible long-term decision and then walking out before the decision actually negatively affects the company? What about perks, including non-related work expenses on the company dime?

On the surface alone... median pay is way up. Beneath the surface, there's a ton of that shit above that makes the problem even worse, because we're not even fully calculating the cost of executive compensation.

You asked for solutions. There are plenty out there.

Stop croney practices between boards and executives. Boards should to the greatest extent possible serve the shareholders, not be in cahoots with executives
Force boards to set more compensation on long-term incentives
Have actual threat of negative financial compensation for failure. This is huge. Our compensation structure rewards gambling and it rewards failure (it definitely doesn't punish failure)
Continue to force transparency behind exactly what executives are being paid for and how much the median worker is being paid
Continue to reduce cheating. Stop CEOs who are using unethical but legal practices to boost their compensation.
Give shareholders more power to affect compensation decisions

HonestChieffan
12-04-2012, 11:35 AM
How are you measuring options, including backdated options? Were they exercised? Are you factoring in long-term incentive payouts? Are you factoring in that at any point in time, the CEO can walk out the door and collect an astoundingly high golden parachute and retirement package EVEN IF THEY FAILED? Are you factoring in the 5-year cost the CEO incurs on the corporation for making a terrible long-term decision and then walking out before the decision actually negatively affects the company? What about perks, including non-related work expenses on the company dime?

On the surface alone... median pay is way up. Beneath the surface, there's a ton of that shit above that makes the problem even worse, because we're not even fully calculating the cost of executive compensation.

Depends on the option but the options I received were of zero value until they were exercised. We were awarded so many shares at market price the day of option declaration. We could not exercise for 3 years and had to exercise in 10. To exercise we had to pay the option price.

Options are not a gift of stock. I recall only one option I received that was never exercised. I know a couple were dynamite with splits taking place. And a couple were not so much.


Another incentive was paid in the form of a Incentive award. That was stock that was given to the managers who earned them. No cost to the awardee. However, you paid regular income tax in the year of the award on the full value.

Another compensation was a Long Term Incentive. I don't even recall how that was supposed to work but I recall it didn't pay squat.

Do you have any actual examples of the things you rail against or is it just a global broad sweeping diatribe?

chiefzilla1501
12-04-2012, 02:29 PM
Depends on the option but the options I received were of zero value until they were exercised. We were awarded so many shares at market price the day of option declaration. We could not exercise for 3 years and had to exercise in 10. To exercise we had to pay the option price.

Options are not a gift of stock. I recall only one option I received that was never exercised. I know a couple were dynamite with splits taking place. And a couple were not so much.

I know how options work. Our focus on stock options as compensation has encouraged gambling and short-term orientation. It basically says you get to keep money you make, but you're protected if things go south.

Another incentive was paid in the form of a Incentive award. That was stock that was given to the managers who earned them. No cost to the awardee. However, you paid regular income tax in the year of the award on the full value.

Another compensation was a Long Term Incentive. I don't even recall how that was supposed to work but I recall it didn't pay squat.

Do you have any actual examples of the things you rail against or is it just a global broad sweeping diatribe?

I am merely talking about your claim that determining executive compensation is a simple calculation. How are you valuing your options? Through Black-Scholles? Are you factoring in the opportunity cost of what that increase in compensation could have been spent on instead? There are multiple ways to calculate executive compensation and even those ways don't always account for everything.

And no, it is not a sweeping diatribe. I am not talking about average compensation. I am talking about median. Median isn't talking about a few bad eggs skewing the results. Median means that the result is true for at least half of the list if not more.

HonestChieffan
12-04-2012, 02:37 PM
I know how options work. Our focus on stock options as compensation has encouraged gambling and short-term orientation. It basically says you get to keep money you make, but you're protected if things go south.



I am merely talking about your claim that determining executive compensation is a simple calculation. How are you valuing your options? Through Black-Scholles? Are you factoring in the opportunity cost of what that increase in compensation could have been spent on instead? There are multiple ways to calculate executive compensation and even those ways don't always account for everything.

And no, it is not a sweeping diatribe. I am not talking about average compensation. I am talking about median. Median isn't talking about a few bad eggs skewing the results. Median means that the result is true for at least half of the list if not more.



Options in the USA chart are valued at issue price. Thus it does not reflect true value as the share price can drop and the option has no value or a negative value.

There is no cost to the company for issuing an option until it is exercised. Thus there is no opportunity cost.

You are absolutely wrong on the impact on the decision making by issuing options. In the case I referenced, three years had to pass before the option was exercise able. That creates agape between short and longer term decisions. And they can go ten years so if the company does have a downturn, it may be 10 years before they have value.

I think your position would have merit if you had a specific that you could reference. Just railing against the man is not getting it done.

chiefzilla1501
12-04-2012, 03:38 PM
Options in the USA chart are valued at issue price. Thus it does not reflect true value as the share price can drop and the option has no value or a negative value.

There is no cost to the company for issuing an option until it is exercised. Thus there is no opportunity cost.
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/07/AR2009020700044.html
This explains it as well as I ever could. Interpreting executive compensation is extremely difficult and most will tell you there are several different approaches you can take.

You are absolutely wrong on the impact on the decision making by issuing options. In the case I referenced, three years had to pass before the option was exercise able. That creates agape between short and longer term decisions. And they can go ten years so if the company does have a downturn, it may be 10 years before they have value.

I think your position would have merit if you had a specific that you could reference. Just railing against the man is not getting it done.

I've done a ton of research on this. Business Week. Wharton. HBR. Wall Street Journal. There is overwhelming criticism of stock-based incentives. Don't' act like this is just me talking. If you want me to keep posting even more links, I will, because it's everywhere.

http://www.businessweek.com/stories/2009-04-17/rethinking-ceo-stock-optionsbusinessweek-business-news-stock-market-and-financial-advice

http://knowledge.wharton.upenn.edu/article.cfm?articleid=2807

http://blogs.hbr.org/martin/2011/06/volatility-the-nasty-truth-abo.html

http://online.wsj.com/article/SB10001424052748703789104576273042510527896.html

chiefzilla1501
12-04-2012, 03:42 PM
Options in the USA chart are valued at issue price. Thus it does not reflect true value as the share price can drop and the option has no value or a negative value.

There is no cost to the company for issuing an option until it is exercised. Thus there is no opportunity cost.

You are absolutely wrong on the impact on the decision making by issuing options. In the case I referenced, three years had to pass before the option was exercise able. That creates agape between short and longer term decisions. And they can go ten years so if the company does have a downturn, it may be 10 years before they have value.

I think your position would have merit if you had a specific that you could reference. Just railing against the man is not getting it done.

And just to clarify...

If you earn dollars at $7M, those dollars are valued at $7M.

If you earn stock at $7M, that stock is valued as $7M in equity. It is essentially valued as $7M. If you tank the company and the stock is then valued at $1M, guess what... your equity is now valued at $1M. You just lost $6M.

If you earn a stock option at $7M... that stock is valued at $0. You usually do not lose money on an option. You can only gain money on it. If your stock is below strike price... if this were a stock, you'd lose money every time the stock price dropped. In an option, you don't lose anything even if you send the stock to the cellar. Hence, when executives get huge payouts for big success but are capped in how much they lose if they business tanks... what would you do? Of course you're going to to gamble. Go big or go home.

HonestChieffan
12-04-2012, 03:44 PM
And just to clarify...

If you earn dollars at $7M, those dollars are valued at $7M.

If you earn stock at $7M, that stock is valued as $7M in equity. It is essentially valued as $7M. If you tank the company and the stock is then valued at $1M, guess what... your equity is now valued at $1M. You just lost $6M.

If you earn a stock option at $7M... that stock is valued at $0. You usually do not lose money on an option. You can only gain money on it. If your stock is below strike price... if this were a stock, you'd lose money every time the stock price dropped. In an option, you don't lose anything even if you send the stock to the cellar. Hence, when executives get huge payouts for big success but are capped in how much they lose if they business tanks... what would you do? Of course you're going to to gamble. Go big or go home.


Well no sense in arguing how its valued, its not a matter of your opinion its a simple fact. You either get it or you dont and you chose to not....Rail on my friend, you are a dedicated soldier Ill give you that.

Stewie
12-04-2012, 04:02 PM
Look at the bond ratings of the companies that have these "profits." I'm not talking about the "big profit" companies because it doesn't matter, they just borrow more. These "corporations" make profit while being saddled with huge debt. It's the government approved accounting method that says, "See? Everything is golden. Look at the numbers you dumbass!"

chiefzilla1501
12-04-2012, 04:11 PM
Well no sense in arguing how its valued, its not a matter of your opinion its a simple fact. You either get it or you dont and you chose to not....Rail on my friend, you are a dedicated soldier Ill give you that.

There is nothing non-factual about what I said. If a stock drops below a strike price, the option is valued at $0 and you lose no money. If it's stock, you lose money every time the stock price drops. The difference in downside risk is tremendously different.

As for vesting... many CEOs can exercise their stock options after 1-3 years. That's not a lot of time and it creates enormous incentive to inflate earnings today then cash out.

HonestChieffan
12-04-2012, 04:13 PM
There is nothing non-factual about what I said. If a stock drops below a strike price, the option is valued at $0 and you lose no money. If it's stock, you lose money every time the stock price drops. The difference in downside risk is tremendously different.

As for vesting... many CEOs can exercise their stock options after 1-3 years. That's not a lot of time and it creates enormous incentive to inflate earnings today then cash out.

Must be new math. Good luck in your endeavors.

chiefzilla1501
12-04-2012, 04:21 PM
Must be new math. Good luck in your endeavors.

Then tell me what's incorrect. If your stock option is underwater (strike price is higher than actual stock price), you won't exercise the option and your option is basically worth $0. You can't lose money on an option. You can only not make money on it. That's at tremendous difference in terms of downside risk.

Rather than insulting, tell me what is incorrect.

HonestChieffan
12-05-2012, 10:45 AM
Then tell me what's incorrect. If your stock option is underwater (strike price is higher than actual stock price), you won't exercise the option and your option is basically worth $0. You can't lose money on an option. You can only not make money on it. That's at tremendous difference in terms of downside risk.

Rather than insulting, tell me what is incorrect.


Thats true up to a point. As you state it it is 100% correct. But if that option represents a substantial part of your compensation and it drops to the negative side, then in essence what you hoped, or had valued it in your planning, then you just took a hell of a hit in income.

Its a matter of perspective at that point.

petegz28
12-05-2012, 11:01 AM
Must be new math. Good luck in your endeavors.

Actually he is correct. If you are granted options and the stock never gets to or above the strike price then the value of the options is $0. As long as you didn't pay for the options then you lost no money.

petegz28
12-05-2012, 11:04 AM
Thats true up to a point. As you state it it is 100% correct. But if that option represents a substantial part of your compensation and it drops to the negative side, then in essence what you hoped, or had valued it in your planning, then you just took a hell of a hit in income.

Its a matter of perspective at that point.

First lesson of good finance, don't ever plan on getting money that is in the form of options and bonuses. To do so is idiotic. If you took a job based on the hopes that bonuses or stock options would be where you make your money then you got perma-fucked unless you worked out a very beneficial contract for yourself.

I remember interviweing at companies and they would always try to toss in a "bonus" as a perk and I would stop them there. I never wanted to hear about bonuses. If I got one great. Otherwise, just tell me what I am getting in salary and the rest is gravy if it happens.

HonestChieffan
12-05-2012, 03:00 PM
First lesson of good finance, don't ever plan on getting money that is in the form of options and bonuses. To do so is idiotic. If you took a job based on the hopes that bonuses or stock options would be where you make your money then you got perma-****ed unless you worked out a very beneficial contract for yourself.

I remember interviweing at companies and they would always try to toss in a "bonus" as a perk and I would stop them there. I never wanted to hear about bonuses. If I got one great. Otherwise, just tell me what I am getting in salary and the rest is gravy if it happens.


Having thrown away an option as well as one Long term Incentive that were both zeroed....I understand.

BucEyedPea
12-05-2012, 03:23 PM
This is something I'd like to see your explanations on.

Corporations are recording record profits in 2012. Not good profits, record profits.

And yet our economy struggles at a little under 3% growth and a high unemployment rate.

Why, in your opinion, is the economy so bad yet businesses are doing so great?



Well Obama's policies are corporatist and Keynesian. This benefits those guys. Take a look at it.

BucEyedPea
12-05-2012, 03:24 PM
First lesson of good finance, don't ever plan on getting money that is in the form of options and bonuses. To do so is idiotic. If you took a job based on the hopes that bonuses or stock options would be where you make your money then you got perma-****ed unless you worked out a very beneficial contract for yourself.

I remember interviweing at companies and they would always try to toss in a "bonus" as a perk and I would stop them there. I never wanted to hear about bonuses. If I got one great. Otherwise, just tell me what I am getting in salary and the rest is gravy if it happens.

I have a friend who is a millionaire today by getting hired at start-ups offering stock options.
He did it three times.

chiefzilla1501
12-05-2012, 03:38 PM
Thats true up to a point. As you state it it is 100% correct. But if that option represents a substantial part of your compensation and it drops to the negative side, then in essence what you hoped, or had valued it in your planning, then you just took a hell of a hit in income.

Its a matter of perspective at that point.

So then you would agree that an executive may be motivated to boost short term initiatives that drive up the stock price in order to exercise options instead of long term initiatives to boost long term value? You have three years vested which isn't bad (I've heard people say 4 is optimal) but in situations where you have less, that just encourages CEOs to inflate value, cash out, then claim that problems in the future are somebody else's problem.

Not to mention the way issuing options dilutes shareholder value by giving them significantly less ownership stake in a company.

I am a firm believer that executives will take what they're given. Again, this is less of an indictment on executives as it is the compensation structure that encourages bad behavior.

HonestChieffan
12-05-2012, 03:48 PM
So then you would agree that an executive may be motivated to boost short term initiatives that drive up the stock price in order to exercise options instead of long term initiatives to boost long term value? You have three years vested which isn't bad (I've heard people say 4 is optimal) but in situations where you have less, that just encourages CEOs to inflate value, cash out, then claim that problems in the future are somebody else's problem.

Not to mention the way issuing options dilutes shareholder value by giving them significantly less ownership stake in a company.

I am a firm believer that executives will take what they're given. Again, this is less of an indictment on executives as it is the compensation structure that encourages bad behavior.


The longer required time the better for an option, yes. But I may be wrong but I believe IRS rules define the terms of any option nowadays. Its been a while since I was involved in options and in incentive awards. (Nowdays, I have to give myself a performance review and usually I reward myself with something outlandish like a fishing reel or a new pair of insulated carharts and a few chainsaw blades.)

That said, I know my compensation was strongly tied to our business plan, I had to deliver on both sales as well as net, and I had to manage the budgets for the business. I had metics applied to all of those as well as the non numeric measurements applied to how well I did by job managing my staff and how well I did in participation on our strategic planning team and the information management team. Each level of compensation was tied to a lot of other things so that we did not have bad long term decisions that were only made to look good for a year or a quarter.

I worked for two outstanding fortune 500s. Both managed extremely well. And both would hang your ass if you did things that were not in the best interest of your sphere of responsibility and not in keeping with the 5 year plan that consistently drove business decisions.

BigRedChief
12-05-2012, 07:15 PM
chiefzilla is a communist.
http://ferrellgummit.files.wordpress.com/2011/08/thanks-obama.png

chiefzilla1501
12-05-2012, 08:41 PM
The longer required time the better for an option, yes. But I may be wrong but I believe IRS rules define the terms of any option nowadays. Its been a while since I was involved in options and in incentive awards. (Nowdays, I have to give myself a performance review and usually I reward myself with something outlandish like a fishing reel or a new pair of insulated carharts and a few chainsaw blades.)

That said, I know my compensation was strongly tied to our business plan, I had to deliver on both sales as well as net, and I had to manage the budgets for the business. I had metics applied to all of those as well as the non numeric measurements applied to how well I did by job managing my staff and how well I did in participation on our strategic planning team and the information management team. Each level of compensation was tied to a lot of other things so that we did not have bad long term decisions that were only made to look good for a year or a quarter.

I worked for two outstanding fortune 500s. Both managed extremely well. And both would hang your ass if you did things that were not in the best interest of your sphere of responsibility and not in keeping with the 5 year plan that consistently drove business decisions.

I think you've just been fortunate. Again, you've challenged me to find evidence beyond a sweeping assumption. I don't have direct evidence on the average vesting period but what we are seeing is median compensation going up in a down economy and a high % of cash outs even though the stock market has been struggling. And the overwhelming sentiment on options from credible publications like the Wall Street Journal and HBR consistently say option-based incentives are poorly aligning with shareholder incentives.

Pretty clear that there is a widespread problem. Good news is, some things seem to be working. I don't like Dodd Frank, but "say on pay" seems to be forcing boards to realize they can't just get away with murder and that crony relationships with executives will get them "fired" from the board.