CEO Makes $30 mill By Getting Fired

[gblowfish]

Eat the rich:

http://finance.yahoo.com/blogs/daily...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]

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]

$24 billion in revenue last year.

[BigChiefTablet]

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]

Originally Posted by BigChiefTablet

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]

So what?

[Donger]

Originally Posted by BigChiefTablet

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]

Originally Posted by Donger

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.

[Donger]

Does this bother anyone?

Oracle CEO Larry Ellison makes Malibu real estate his own

[BucEyedPea]

Originally Posted by BigChiefTablet

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]

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]

Originally Posted by BucEyedPea

Only thing is, the there weren't any Robber Barons back in the day. That's another myth.

[BucEyedPea]

Originally Posted by Donger

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

[chiefzilla1501]

Originally Posted by blaise

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]

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