CEO Payouts: Problems and Solutions

[poretz]

I found this enlightening but not a surprise:

"Institute for Public Accuracy (IPA)
July 12, 2005

Stephen Crawford, the co-president of Morgan Stanley, is leaving the company with a $32 million severance package.

Today, Congressman Martin Olav Sabo introduced legislation which would limit government subsidization of excessive executive pay by eliminating tax deductions for compensation that exceeds 25 times the company's lowest paid full-time employee. For example, if the lowest paid, full-time employee in a firm was paid $20,000, then the highest salary deduction that could be claimed by that firm would be $500,000.

The following analysts are available for interviews:

SAM PIZZIGATI
Author of the new book Greed and Good: Understanding and Overcoming the Inequality That Limits Our Lives, Pizzigati said today: "CEOs today are regularly making decisions that sacrifice the long-term health of their enterprises for short-term gains that benefit, first and foremost, their personal bottom lines. These executives are rushing into mergers that leave employees without jobs and consumers with higher prices. They're investing less in research. They're raiding pension funds. And, if all else fails, they're cooking their corporate books. But here's the worst part. Our current tax code is actually encouraging all this greed and grasping. The more in 'incentives' that corporations lavish upon their executives, the more they can deduct off their taxes. Congressman Martin Sabo's Income Equity Act would shut this subsidy for greed, by ending tax deductions on any executive compensation that runs over 25 times the pay of a company's lowest-paid worker." Pizzigati is also editor of Too Much, an online weekly about excessive income and wealth and a board member of United for a Fair Economy.
More Information

HOLLY SKLAR
Co-author of the book Raise The Floor: Wages and Policies That Work For All Of Us, Sklar said today: "Worker pay is shrinking and the stock market is below 1999 levels, but CEO pay is still on steroids. Compensation jumped 54 percent last year for CEOs of the 500 largest U.S. companies, reaching an average $10.2 million. Full-time worker pay averaged just $32,594. That's 11 percent less than 1973's average worker pay, adjusting for inflation, although worker productivity rose 78 percent between 1973 and 2004. In 1973, CEOs made 45 times as much as average workers. Last year, CEOs made more than 300 times as much as average workers and more than 950 times as much as minimum wage workers. Today's $5.15 an hour minimum wage -- a poverty wage of just $10,712 a year -- is outrageously lower than 1968's inflation-adjusted minimum wage of $8.90."
More Information"
http://www.accuracy.org/newsrelease.php?articleId=1087

 

[billwald]

How about max pay for employees of 401c3 organizations and churches be 5 times the lowest paid employee?

 

[Doctrine1st]

What do you think of this poretz?

"Our current tax code is actually encouraging all this greed and grasping. The more in 'incentives' that corporations lavish upon their executives, the more they can deduct off their taxes. Congressman Martin Sabo's Income Equity Act would shut this subsidy for greed, by ending tax deductions on any executive compensation that runs over 25 times the pay of a company's lowest-paid worker."

 

[poretz]

What do you think of this poretz?

"Our current tax code is actually encouraging all this greed and grasping. The more in 'incentives' that corporations lavish upon their executives, the more they can deduct off their taxes. Congressman Martin Sabo's Income Equity Act would shut this subsidy for greed, by ending tax deductions on any executive compensation that runs over 25 times the pay of a company's lowest-paid worker."

I'm thinking it makes sense, and agree it should be stopped. I actually used to be quite close friends with a CEO that was getting paid over 15x his manager and even more so than his average line employee. I worked close to the numbers and watched how the more the company made the more he and his president made, while those lowest on the pole stayed about the same... By way of religion, this guy was very outwardly "Christian", but only from a safe distance. We lived in his guest house, so I saw much more than the next person and confronted him about it...

 

[Vylo]

I hope Sabo succeeds in getting this passed into law.

 

[Chosen One]

If you are a stockholder in the comapny and think the CEO is overpaid- they you have a basis for a complaint. If not- then you have zero reason to complain. None. We cannot tell businesses who they can hire and how much they can compesate them.. The CEO pays taxes on his money- huge amount of taxes- so it isn't like the government is getting ripped off.

 

[Trogdor the Burninator]

The CEO pays taxes on his money- huge amount of taxes- so it isn't like the government is getting ripped off.

You're kidding, right ? If you're earning what these overpaid CEOs do and you're paying lots of tax then you need to see a better accountant.

 

[Doctrine1st]

If you are a stockholder in the comapny and think the CEO is overpaid- they you have a basis for a complaint. If not- then you have zero reason to complain. None. We cannot tell businesses who they can hire and how much they can compesate them.. The CEO pays taxes on his money- huge amount of taxes- so it isn't like the government is getting ripped off.

They, the stock holders, complain all the time, specially those lower level employess who do own stock who are asked to take pay cuts while their CEOs are paid bonuses, just like United Airlines and Alaska.

 

[neverforsaken]

though i am a supporter of capitalism, i just cant understand how a person can get 32 million for quiting his job, but if the company loses 32 million, they fire a bunch of people.

 

[Defiant]

I saw this on the evening news the other night. Despicable. Outrageous. These CEOs get fired and are given 10's of millions of dollars?

If you are a stockholder in the comapny and think the CEO is overpaid- they you have a basis for a complaint.

I agree, but I think it is pertinent for the rest of society to be outraged by this, especially in this day and age of companies screaming they cannot compete by paying bloated wages to line workers and move their businesses out of the country. What's the real problem? Paying your newly fired CEO a $32 million severance package!!!