PDA

View Full Version : U.S. Issues CEO Makes $30 mill By Getting Fired


gblowfish
05-06-2013, 02:21 PM
Eat the rich:

http://finance.yahoo.com/blogs/daily-ticker/50m-getting-fired-oxy-ray-irani-takes-c-160355499.html

Occidental Petroleum chairman Ray Irani lost his job Friday after 76% of shareholders opposed his reelection, the latest high-profile executive to be shown the doors.

He won’t be able to collect unemployment but, in this case, getting fired might be the best thing to happen to the longtime oil executive: Irani stands to receive an exit package of over $50 million if his departure is considered a “termination” vs. a merely $20 million package had he retired at the end of 2012, The WSJ reports.

The heft of Irani’s golden parachute adds a bit of absurdity to the excess of his tenure at Occidental: Always among America’s most highest-paid executives, Irani’s total compensation from 2004-2012 totaled over $1.1 billion.

Two years ago, shareholders voted to remove Irani as CEO, in part because of a backlash against his outsized compensation given Occidental shares were lagging major competitors. Scheduled to retire at the end of 2014, Irani sought to install a former executive as CEO, which prompted the latest shareholder revolt. Arguably, it’s also a sign of how the executive had come to believe the company belonged to him vs. other stakeholders, i.e. shareholders, customers, employees and the community at large.

As Henry Blodget and I discuss in the accompanying video, Irani is just one extreme example of the sickness infection corporate America: The Myth of the Irreplaceable Executive.

The myth holds that certain individuals must be paid extravagantly because they and only they have the talent and temperament to guide XYZ company. History has shown that’s almost never the case and the 2008 financial crisis pretty clearly showed these "masters of the universe" are all too human.

The dirty (yet open) secret is C-level executives often serve on the boards of other companies where they vote for outsized pay packages; in turn, compensation consultants then cite those packages as a rationale for paying other CEOs big bucks. To say that it’s very clubby and cliquey*is an understatement.

Even worse, these compensation packages are often tied to specific company performance metrics, giving individual executives huge personal incentives to focus on short-term goals vs. what’s in the company’s best long-term interests. This focus on the short-term – exacerbated by Wall Street’s fixation with quarterly results -- has contributed to the erosion of American industry’s long-term ability to compete in a global economy.

Furthermore, a combination of stagnant wages for median workers and rising CEO pay undermines our democracy and, if left unchecked, is the building blocks for a populist uprising, if not outright revolution. Sound far-fetched? Louis XVI and Marie-Antoinette didn’t see it coming either, much less more recent examples like Hosni Mubarak and other autocratic Arab leaders.

As noted above, Irani joins executives such as Hewlett-Packard’s Ray Lane, Chesapeake Energy’s Aubrey McClendon, Wellpoint’s Angela Braly and JC Penney’s Ron Johnson who’ve been shown the door recently in what The Wall Street Journal calls “a rising wave of shareholder activism.”

With income inequality continuing to rise, corporate wages hitting all-time lows as a percent of the economy and the ratio of CEO-to-worker pay hitting new heights, it’s a stretch to say the ‘Era of the Imperial Executive’ is ending.
But perhaps the pendulum is finally starting to swing against the C-Suite.

BucEyedPea
05-06-2013, 02:54 PM
Good for him. You sound envious that it wasn't you able to pull that off.

Anyhow, anyone getting that does not make others poorer. You should be putting that on Bernanke and Obama. That is if you really cared about solving the problem instead of just being jealous.

Donger
05-06-2013, 02:56 PM
$24 billion in revenue last year.

BigChiefTablet
05-06-2013, 03:53 PM
This is where I jump off the mostly libertarian train and realize that top executive salaries have climbed exponentially to insane levels over the past few decades and it isn't because they are so good at their jobs.

I think the government should stay out of business for the most part and let the free market do what it does, but I also realize that the robber barons of the industrial revolution got disgustingly rich off the backs of what amounts to slave labor. And I see us heading in that direction again. Of course they already went pretty far down the path of getting rich off of slave labor when they moved all the jobs to China.

The banks and the government should definitely get plenty of blame, for sure. And again, I don't really think the government is capable of "fixing" this problem. But I really don't know what can be done about it.

Apparently a lot of people believed Gordon Gecko when he said that greed was good.

KILLER_CLOWN
05-06-2013, 03:58 PM
This is where I jump off the mostly libertarian train and realize that top executive salaries have climbed exponentially to insane levels over the past few decades and it isn't because they are so good at their jobs.

I think the government should stay out of business for the most part and let the free market do what it does, but I also realize that the robber barons of the industrial revolution got disgustingly rich off the backs of what amounts to slave labor. And I see us heading in that direction again. Of course they already went pretty far down the path of getting rich off of slave labor when they moved all the jobs to China.

The banks and the government should definitely get plenty of blame, for sure. And again, I don't really think the government is capable of "fixing" this problem. But I really don't know what can be done about it.

Apparently a lot of people believed Gordon Gecko when he said that greed was good.

Yup.

blaise
05-06-2013, 03:59 PM
So what?

Donger
05-06-2013, 04:01 PM
This is where I jump off the mostly libertarian train and realize that top executive salaries have climbed exponentially to insane levels over the past few decades and it isn't because they are so good at their jobs.

I think the government should stay out of business for the most part and let the free market do what it does, but I also realize that the robber barons of the industrial revolution got disgustingly rich off the backs of what amounts to slave labor. And I see us heading in that direction again. Of course they already went pretty far down the path of getting rich off of slave labor when they moved all the jobs to China.

The banks and the government should definitely get plenty of blame, for sure. And again, I don't really think the government is capable of "fixing" this problem. But I really don't know what can be done about it.

Apparently a lot of people believed Gordon Gecko when he said that greed was good.

Reminds me of when I was in middle school and they had that day were they asked everyone what profession they'd like. After the usual "brew master!" and such, they got to me. I replied, "Robber baron." Had a few sideways looks that day, more than usual.

KILLER_CLOWN
05-06-2013, 04:06 PM
Reminds me of when I was in middle school and they had that day were they asked everyone what profession they'd like. After the usual "brew master!" and such, they got to me. I replied, "Robber baron." Had a few sideways looks that day, more than usual.

http://us.123rf.com/400wm/400/400/tlorna/tlorna0912/tlorna091200008/6095921-avarice-businessman-with-money-man-or-devil-holding-dollars-in-display-of-greed-in-hell-fire-a-deadl.jpg

Donger
05-06-2013, 04:12 PM
Does this bother anyone?

Oracle CEO Larry Ellison makes Malibu real estate his own (http://www.latimes.com/business/realestate/la-fi-ellison-malibu-20130505,0,31151.story)

BucEyedPea
05-06-2013, 04:29 PM
This is where I jump off the mostly libertarian train and realize that top executive salaries have climbed exponentially to insane levels over the past few decades and it isn't because they are so good at their jobs.

I think the government should stay out of business for the most part and let the free market do what it does, but I also realize that the robber barons of the industrial revolution got disgustingly rich off the backs of what amounts to slave labor. And I see us heading in that direction again. Of course they already went pretty far down the path of getting rich off of slave labor when they moved all the jobs to China.

The banks and the government should definitely get plenty of blame, for sure. And again, I don't really think the government is capable of "fixing" this problem. But I really don't know what can be done about it.

Apparently a lot of people believed Gordon Gecko when he said that greed was good.

Only thing is, the there weren't any Robber Barons back in the day. That's another myth. If there were any, they were getting subsidies from the govt or preferential treatment. Then markets were blamed.

The key is to look where there really isn't a free market while one is being promoted.

BucEyedPea
05-06-2013, 04:35 PM
The Gordon Gekkos of the world are Hollywood created characters. This stereotype of businessmen is as false as Marxist theory itself.

I'd rather concentrate on govt greed. Or how keeping detainees cost a lot of money—$900,000 per prisoner.

Donger
05-06-2013, 04:55 PM
Only thing is, the there weren't any Robber Barons back in the day. That's another myth.

:spock:

BucEyedPea
05-06-2013, 06:12 PM
:spock:

It's an exaggeration because markets got the blame when it wasn't really markets.

chiefzilla1501
05-06-2013, 06:12 PM
So what?

I understand the purpose of golden parachutes, but they are getting out of control.

It is mind-numbing to me that people will blame government or blame poor executive compensation. They are both the problem.

It's not a hard concept to grasp. If you're bad enough to be fired, then you shouldn't get "bonus" for your shitty work.

BucEyedPea
05-06-2013, 06:16 PM
The Truth About the "Robber Barons"



Most who use the term "robber barons" are confused about the role of capitalism in the American economy.

As common as it is to speak of "robber barons," most who use that term are confused about the role of capitalism in the American economy and fail to make an important distinction — the distinction between what might be called a market entrepreneur and a political entrepreneur. A pure market entrepreneur, or capitalist, succeeds financially by selling a newer, better, or less expensive product on the free market without any government subsidies, direct or indirect. The key to his success as a capitalist is his ability to please the consumer, for in a capitalist society the consumer ultimately calls the economic shots. By contrast, a political entrepreneur succeeds primarily by influencing government to subsidize his business or industry, or to enact legislation or regulation that harms his competitors.

Lies in wait for Loneiguana to start hurling ad hominems, strawman arguments and other logical fallacies.

I'll just bet Donger, and some other prog will claim the transcontinental railroads would never have been built with govt subsidies.


https://mises.org/daily/2317

BucEyedPea
05-06-2013, 06:17 PM
I understand the purpose of golden parachutes, but they are getting out of control.

It is mind-numbing to me that people will blame government or blame poor executive compensation. They are both the problem.

It's not a hard concept to grasp. If you're bad enough to be fired, then you shouldn't get "bonus" for your shitty work.
If it's NOT your money, then it's NOT your business. That's what communists and socialists do. Therefore, you are NOT a moderate.

chiefzilla1501
05-06-2013, 06:18 PM
Good for him. You sound envious that it wasn't you able to pull that off.

Anyhow, anyone getting that does not make others poorer. You should be putting that on Bernanke and Obama. That is if you really cared about solving the problem instead of just being jealous.

Not a hard concept to grasp. Money paid to CEOs is money that could have been spent on new workers, new plants, R&D, marketing, training programs. All these things create jobs that create workers.

In many cases, these corporations are getting tremendously favorable tax breaks. Are they getting pumped into capital, workers, etc...? No. Executive compensation is skyrocketing while job growth is flat and the same workers are being asked to take on twice the workload.

Executive compensation is absolutely a problem. I have no problem with good CEOs getting paid handsomely. There is an enormous incentive problem when horrible CEOs are getting paid equally as handsomely.

BucEyedPea
05-06-2013, 06:18 PM
Not a hard concept to grasp. Money paid to CEOs is money that could have been spent on new workers, new plants, R&D, marketing, training programs. All these things create jobs that create workers.

In many cases, these corporations are getting tremendously favorable tax breaks. Are they getting pumped into capital, workers, etc...? No. Executive compensation is skyrocketing while job growth is flat and the same workers are being asked to take on twice the workload.

Executive compensation is absolutely a problem. I have no problem with good CEOs getting paid handsomely. There is an enormous incentive problem when horrible CEOs are getting paid equally as handsomely.

It's NOT your property. Not a hard concept to grasp either. But for you it is. Therefore, END of discussion with you.

chiefzilla1501
05-06-2013, 06:19 PM
If it's NOT your money, then it's NOT your business. That's what communists and socialists do. Therefore, you are NOT a moderate.

It's not their money either. The CEO didn't start their business and the business belongs to the shareholders, not the CEO. And in most cases, the boards are built by cronies who collude with the executives to work against the shareholder's best interest.

BucEyedPea
05-06-2013, 06:21 PM
It's not their money either.
What? Where did I say it was? I not the one complaining about the guy getting all this money. Or that it's getting out of hand. You are.

The CEO didn't start their business and the business belongs to the shareholders, not the CEO. And in most cases, the boards are built by cronies who collude with the executives to work against the shareholder's best interest.
Then if you're NOT a shareholder it's NOT yours either. No distinction that means anything here. End of discussion.

BucEyedPea
05-06-2013, 06:23 PM
Oh and it seems to me the shareholders are dealing with the matter by voting that CEO out.

What's the problem?

chiefzilla1501
05-06-2013, 06:26 PM
It's NOT your property. Not a hard concept to grasp either. But for you it is. Therefore, END of discussion with you.

I do not have a problem with small business owners doing whatever it takes to grow their business or making as much money as they see fit. I don't have a problem with private equity "raiders" who seize a market opportunity and make an insane amount of money off of it.

That's not what's happening here. When small businesses fail, the business owner loses money. When private equity or investors or anybody fails, they lose their shirt on it. When a CEO fails, they get paid and the shareholders are the ones who lose all their money and the company loses the ability to invest that money back into the business.

It is ridiculous to suggest that the corporation is the property of the CEO when they have NOTHING to lose if they fail, except for guarantee of employment.

BucEyedPea
05-06-2013, 06:27 PM
Furthermore, a combination of stagnant wages for median workers and rising CEO pay undermines our democracy and, if left unchecked, is the building blocks for a populist uprising, if not outright revolution. Sound far-fetched? Louis XVI and Marie-Antoinette didn’t see it coming either, much less more recent examples like Hosni Mubarak and other autocratic Arab leaders.

Look at this crap. Comparing govt officials, in this case monarchs who happened to have inflated their currency to pay for their intervention in the War for Independence in America solely to get back at their competing empire builder Great Britain. ( Our good fortune, but their loss including the king's head.) Then he uses another govt head of state Mubarak and compares both of these leaders as comparable to a business executive who did not stagnate the wages of the common man via inflation because it was a man by the name of Bernanke who did that so a govt leader like Obama can spend like a drunken sailor—not to mention previous American presidents.



LMAO LMAO LMAO

chiefzilla1501
05-06-2013, 06:30 PM
Oh and it seems to me the shareholders are dealing with the matter by voting that CEO out.

What's the problem?

It usually takes an act of God for shareholders to vote a CEO out. And in most cases, the CEO has already done damage to the shareholders by the time he is voted out. And other cases, you have boards in cahoots with the executive that don't hold their executives accountable and serve the executives, not the shareholders.

It is an absolutely crooked system. And it needs to change. CEOs can get paid whatever they want, but they should be held accountable for poor performance and there needs to be improvements for how shareholders can more democratically provide a voice to the process. It is absolutely laughable that anyone would applaud a $30M bonus for getting fired.

chiefzilla1501
05-06-2013, 06:31 PM
Look at this crap. Comparing govt officials, in this case monarchs who happened to have inflated their currency to pay for their intervention in the War for Independence in America solely to get back at their competing empire builder Great Britain. ( Our fortunate, their loss including the king's head.) Then he uses another govt head of state Mubarak and compares both of these leaders as comparable to a business executive who did not stagnate the wages of the common man via inflation because it was a man by the name of Bernanke who did that so a govt leader like Obama can spend like a drunken sailor—not to mention previous American presidents.



LMAO LMAO LMAO

I don't know why you insist that both Obama/Bernanke and corporations are both a part of the problem, versus insisting that one is the problem and the other is not.

BucEyedPea
05-06-2013, 06:32 PM
I do not have a problem with small business owners doing whatever it takes to grow their business or making as much money as they see fit. I don't have a problem with private equity "raiders" who seize a market opportunity and make an insane amount of money off of it.

That's not what's happening here. When small businesses fail, the business owner loses money. When private equity or investors or anybody fails, they lose their shirt on it. When a CEO fails, they get paid and the shareholders are the ones who lose all their money and the company loses the ability to invest that money back into the business.

It is ridiculous to suggest that the corporation is the property of the CEO when they have NOTHING to lose if they fail, except for guarantee of employment.

Where did I say it was the CEO's property? You're making a strawman argument—a logical fallacy.
I only said the money or property was not yours, because you're the one whining about the pay he got. LOL

Really, it shouldn't matter if a business is small or big; privately owned or if shareholders own it through shares. The company leadership owes no fiduciary duty whatsoever to the public sphere. This is nonsense common good think from the collectivist trash heaps of history.

Either way, none of it is yours.

HonestChieffan
05-06-2013, 06:33 PM
Good for him

BucEyedPea
05-06-2013, 06:36 PM
I don't know why you insist that both Obama/Bernanke and corporations are both a part of the problem, versus insisting that one is the problem and the other is not.

Because in the case of Bernanke, he runs a hybrid quasi public institution that has been granted a govt charter for a monopoly of the money supply. It was created by govt to enable the govt to spend recklessly. You missed the enabling part which was stated. Or you deliberately ignored it because it doesn't suit the strawman you're making here. I'm ahead of you though. The Fed is not an institution created by any market forces that delivered goods or services that people willing exchanged their money for on a voluntary basis. And it actually really does rape the public while pretending to operate for the public good.

chiefzilla1501
05-06-2013, 06:41 PM
Where did I say it was the CEO's property? You're making a strawman argument—a logical fallacy.
I only said the money or property was not yours, because you're the one whining about the pay he got. LOL

Really, it shouldn't matter if a business is small or big; privately owned or if shareholders own it through shares. The company leadership owes no fiduciary duty whatsoever to the public sphere. This is nonsense common good think from the collectivist trash heaps of history.

Either way, none of it is yours.

The company leadership has a duty to serve the shareholders. That is business 101. The idea that they do not owe any obligation to the millions of investors who are investing into the company is like saying the government has no duty to serve the taxpayers who expect services.

It is not collectivist. If you don't want to be obligated to the shareholders, then take your company private.

BucEyedPea
05-06-2013, 06:43 PM
The company leadership has a duty to serve the shareholders. That is business 101.

So why are you bitching if the shareholders voted him out? Not your problem.

The idea that they do not owe any obligation to the millions of investors who are investing into the company is like saying the government has no duty to serve the taxpayers who expect services.

It is not collectivist. If you don't want to be obligated to the shareholders, then take your company private.

You don't get it. Read the original article for Crissakes! You're strawmanning again.

chiefzilla1501
05-06-2013, 06:56 PM
So why are you bitching if the shareholders voted him out? Not your problem.
The shareholders voted him out, which is something that 3/4 of them wanted to do. That is as big of a lack of confidence as you'll ever see. And they paid the price -- THEY have to pay Irani $46M and the share price of the stock plummeted.

Shareholders shouldn't have to take a major hit to their pocketbook to get rid of a CEO.

You don't get it. Read the original article for Crissakes! You're strawmanning again.

What am I strawmanning? The shareholders got rid of the guy, and then took a major hit in their pocketbook. This is exactly the problem with executive compensation. Irani was a terrible CEO who lost the company money. When he lost the company money, the shareholders lost a shitload of money. When Irani got paid $46M just to leave, the shareholders lost a shitload of money. So Irani, a shitty CEO, basically got paid over a billion dollars in a few years while the shareholders lost a shitload of money because he was destroying value for the company.

I don't know what's so hard of a concept to grasp here. Irani is not the owner. Shareholders are the owners of the company -- and as a shareholder of several stocks, you're wrong -- I do own companies, just not Occidental.

And your conclusion that these kind of shareholder revolts are common is laughable. In most cases, corporations are run by boards and shareholders struggle to find a voice. Incidentally, new recent regulations (e.g. Say on Pay) are the only reason why these kinds of things are happening with more regularity. Which again goes to my point that corporations need to be controlled by the owners (the shareholders), not by executives and their crony boards who often times do not act on behalf of the shareholders.

BucEyedPea
05-06-2013, 06:58 PM
Sigh!

Houston, we have a communication problem in the "CEO made $30 Million thread!!! " Please, send Chiefzilla1501 to re-education camp starting with Hooked on Phonics followed by reading comprehension practice. If that doesn't work send him to Psyche Unit 101 to find out if he argues for the sake of it or is just stupid.

gblowfish
05-06-2013, 07:08 PM
BucEyedPea may have been Charles Comiskey in a previous life....

BucEyedPea
05-06-2013, 07:13 PM
BucEyedPea may have been Charles Comiskey in a previous life....

And you must have been Marx.

chiefzilla1501
05-06-2013, 07:35 PM
And you must have been Marx.

JFC, only you would call this Marxism. Corporations being run by a crooked few guys at the top who don't even own the corporation, and taking power away from the shareholders, is NOT the behavior you want to be motivating.

And your argument that the shareholders won here is utterly ridiculous. 1) They only won because of government intervention that finally gave them some voice; 2) They shouldn't have to pay $45.6M to one guy in order to take the company that they own.

BucEyedPea
05-06-2013, 07:40 PM
JFC, only you would call this Marxism. Corporations being run by a crooked few guys at the top who don't even own the corporation, and taking power away from the shareholders, is NOT the behavior you want to be motivating.

And your argument that the shareholders won here is utterly ridiculous. 1) They only won because of government intervention that finally gave them some voice; 2) They shouldn't have to pay $45.6M to one guy in order to take the company that they own.

Have you seen most of the threads he's started? Collectivist nonsense.

Now shut the 'f up until you can learn to read. I wasn't addressing the argument in that post.

gblowfish
05-06-2013, 08:01 PM
And you must have been Marx.

Guilty as charged!
http://i43.tinypic.com/2yzbwn7.jpg

BucEyedPea
05-06-2013, 08:07 PM
No, not that one. This one. Karl Marx


http://www.historyguide.org/images/marx-bio.jpg

gblowfish
05-07-2013, 08:55 AM
I'm not hairy enough to be Karl Marx. But I do like a good cigar now and again. I'd rather be Groucho.

BucEyedPea
05-07-2013, 09:15 AM
I'm not hairy enough to be Karl Marx. But I do like a good cigar now and again. I'd rather be Groucho.

How 'bout Lenin, then?

gblowfish
05-07-2013, 09:19 AM
How 'bout Lenin, then?

He's my favorite Beatle!

http://i39.tinypic.com/22feaa.jpg

BucEyedPea
05-07-2013, 09:21 AM
How 'bout Stalin, at least as far as his economic policies go.

Or go back to the third grade for spelling remediation.

gblowfish
05-07-2013, 09:21 AM
This thread begs the question:
How can you be in two places at once,
When you're not anywhere
at alllll......

<iframe width="420" height="315" src="http://www.youtube.com/embed/sCzgdF_WjOg" frameborder="0" allowfullscreen></iframe>

gblowfish
05-07-2013, 09:27 AM
How 'bout Stalin, at least as far as his economic policies go.

Or go back to the third grade for spelling remediation.

Spel chek iz fur puzies.

And if I get to choose what Russian I prefer to emulate, I'll choose Rasputin.

Ra...Ra....Rasputin!

<iframe width="420" height="315" src="http://www.youtube.com/embed/VmkySNDX4dU" frameborder="0" allowfullscreen></iframe>