Failing CEOs and skyrocketing compensation
Posted: 02 September 2013 06:59 PM   [ Ignore ]
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By Walter Hamilton

Nearly 40% of the nation’s best-paid CEOs over the past two decades were either fired, forced to take government bailouts or in charge of companies that paid huge amounts in fraud-related claims.
That’s the conclusion of a report Wednesday that attempts to gauge the link between weak corporate performance and skyrocketing executive pay.

The study, “Executive Excess 2013: Bailed Out, Booted, Busted,” was issued by the liberal Institute for Policy Studies in Washington. It’s the latest in a years-long line of reports by the IPS and other groups charting alleged abuses in executive pay.

Among other factoids, it cites an AFL-CIO study showing that the pay gap between corporate chieftains and regular workers ballooned to 354-to-1 last year from 195-to-1 in 1993.

“Our analysis reveals widespread poor performance within America’s elite CEO circles,” the report says. “Chief executives performing poorly — and blatantly so — have consistently populated the ranks of our nation’s top-paid CEOs over the last two decades.”

Who works the hardest? Jobs with longest, shortest workdays

According to the study, 22% of the highest-paid CEOs ran companies that either had to take government bailouts to survive during the 2008 global financial crisis or that collapsed altogether.

For example, Richard Fuld, the former head of Lehman Brothers Holdings Inc., was among the 25 highest-paid chieftains for eight years in a row — until his company disintegrated.

An additional 8% of CEOs headed companies that paid whopping fraud-related fines or legal settlements. In some cases, the executives themselves had to pay penalties for their own inappropriate behavior, such as the backdating of stock options to goose their compensation, according to the study.

And another 8% of CEOs suffered the ultimate ignominy — getting the ax for poor performance, according to the report. Of course, the disgraced executives didn’t give back any of their enormous compensation. In fact, the average deposed CEO walked away with a $48-million golden parachute.

http://www.latimes.com/business/money/la-fi-mo-many-highpaid-ceos-turn-out-to-be-failures-report-says-20130828,0,7200976.story

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Posted: 03 September 2013 07:11 AM   [ Ignore ]   [ # 1 ]
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Yeah.  That’s the real re-distribution of wealth that everyone is so adamantly against. Plain and simple.
That goes for failing CEOs or successful CEOs.
A CEO should definitely make many times the amount of the general mean salary of the company. No one’s arguing that.
But 30x, 50x, 100x? No!
That’s bleeding off actual value of the economy.

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Posted: 03 September 2013 10:17 AM   [ Ignore ]   [ # 2 ]
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And of those that were considered successful, I’d like to know broadly what techniques they used to make their companies successful. For example, did they ship jobs overseas? Did they flat out reduce the workforce?

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Posted: 03 September 2013 01:52 PM   [ Ignore ]   [ # 3 ]
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CuthbertJ - 03 September 2013 10:17 AM

And of those that were considered successful, I’d like to know broadly what techniques they used to make their companies successful. For example, did they ship jobs overseas? Did they flat out reduce the workforce?

Yes in many instances they did. 
They also invest in organizations and lobbyists that control politics to varying degrees to tilt the game in their favor
so the con-game can self-perpetuate.
And investing is fine, unless it is used to start blurring the lines of what constitutes a representative democracy.

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Posted: 03 September 2013 02:07 PM   [ Ignore ]   [ # 4 ]
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VYAZMA - 03 September 2013 07:11 AM

Yeah.  That’s the real re-distribution of wealth that everyone is so adamantly against. Plain and simple.
That goes for failing CEOs or successful CEOs.
A CEO should definitely make many times the amount of the general mean salary of the company. No one’s arguing that.
But 30x, 50x, 100x? No!
That’s bleeding off actual value of the economy.

Of course you’re right VYAZMA.

There is no justification for such a large gap.

Stephen

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Posted: 03 September 2013 04:58 PM   [ Ignore ]   [ # 5 ]
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CuthbertJ - 03 September 2013 10:17 AM

And of those that were considered successful, I’d like to know broadly what techniques they used to make their companies successful. For example, did they ship jobs overseas? Did they flat out reduce the workforce?

Probably both. And busted unions, too.

Lois

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