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My comments

• About Time
  A CEO's without Moral compass and allowed by to run a company
  with this level of influence for ten years speaks loudly about the
  principles of its principals.
  
  Pretend all they want, eBay's board is a bunch of insecure
  individuals with little integrity. In reply to: "Report: eBay CEO preparing to retire"

  January 22, 2008

  1 reply

• Bring Reason to Prevail on CEO compensation
  There should be a maximum on CEO pay and it should be
  equitable and reasonable, in accordance with incomes of all
  employees of each company.
  
  Accountability is used as one rationalization for ostensibly
  irrational and high CEO incomes. Only entrepreneurs really
  understand accountability. In the typical publicly traded Fortune
  1000 CEO positions, there is no real accountability. There is
  only a "happy to have arrived" group of individuals, mostly men
  (-2% women), who get to play the game. "Accountability" as the
  rest of us understand it, hardly means ". . . if you don't
  achieve your targets you'll lose your job". Losing your job does
  not equate to being accountable. If you're paid $5 million to
  $100+ million annually, giving it ALL back might be called
  accountability. Since that doesn't happen and will never
  happen, there is really no accountability. How can anyone
  rationalize with a straight face that an employee, such as a
  Michael Eisner, can become a billionaire while the employees on
  the Disney grounds have difficulty paying their rents?
  
  It is also a well promulgated myth that CEO's "know something
  you don't" or "have capabilities you don't have and never will
  have" . . . so of course they have to make such high incomes,
  way, way more than you're worth. In such proclamations CEO's
  and their Boards get help from the head-hunters that are paid to
  find such CEO's. The fact that head-hunters are paid based on
  the incomes of the CEO's they place is simply a . . . co-
  incidence?
  
  CEO's of the Fortune 1000 are part and parcel of the Wall Street
  machinery. They won't shake the tree, and for the most part, do
  as they are asked to do by the brokers who make their markets.
  Sometimes the outcomes of such requests are surprising . . .
  eBay purchasing Skype for $4.1 Billion comes to mind as one
  decision that had most observers cracking their necks sideways,
  as they peered under the hood of a truly questionable deal.
  CEO's do what is good for their brokers, and what is good for
  their brokers is adding a new wings to the mansions in the
  Hamptons or extending the garage another three bays to shelter
  the new arrivals from Maranello, Italy. No CEO wants to see his
  company's stock slide into a slump. That reflects badly on him
  (-2% her) and negatively impacts the value of stock options.
  CEO's understand companies, they don't necessarily understand
  the stock markets and leave such supposed black art to their
  company brokers and market makers. They do what is
  necessary to make that enigmatic group happy . . . whatever it
  takes.
  
  CEO's are also the Chairmen of their Boards. The old system of
  having a CEO report to an independent Board and Chairman are
  long gone. That's why all boards are now made up of "friends".
  That's a very natural desire for any human being. Why wouldn't
  a CEO want to surround himself (-2% herself) with friends who
  will rubber stamp compensation packages? "Thanks. Oh, . . .
  and let me sit on your board so I can approve your
  compensation package in return, plus I'll get options in your
  stock and you'll get some in mine." Should the CEO not be lucky
  enough to get his (-2% her) friends "on Board", the rest of us will
  simply enjoy the side show from the bleachers if things go
  sideways, as we did during recent tenures in Hewlett Packard?s
  corner office.
  
  CEO's pay themselves conspicuous amount of money, very
  simply because they can, and as long as they get their boards to
  go along with them, the new Bentley gets another detailing.
  Even the occasional obscenely incompetent CEO who manages to
  get himself fired, gets a healthy buyout package so that he
  keeps his mouth shut and the system remains remains intact. . .
  . OK, so Hewlett Packard comes to mind again.
  
  This isn't to say that CEO's are not good people. Most are . . .
  mostly. They simply succumb to personal desires without the
  added measure of reasonableness to temper their ego's need for
  accumulation. There's always another rationalization that can
  smooth the intuitive unease stimulating the guilt that might
  disturb a CEO's good night's sleep, while at the same time
  satisfying an imperious ego "Altruistic tendencies will be
  satisfied when I make a donation to cancer or some other
  research."
  
  One of the best neck snapping rationalization for high CEO
  compensation I've heard was "Well, it's been a long road of very
  strenuous hours and a lot of hard work." As in . . . "I deserve it
  because I work hard." Work hard? Coal miners in the
  Appalachians "work hard". Crop pickers in constant contact with
  pesticides in Castroville, CA, "work hard". Fortune 1000 CEO's?
  Not so much.
  
  The discrepancies between CEO pay packages and average
  employee income are staggering. It's hardly rocket science to
  come up with an algorithm that provides a CEO superior but
  equitable compensation congruent with the compensation of all
  other employees throughout the company. There is no fairness
  or reasonableness otherwise.
  
  If the system isn't fixed, at some point in time it will break.
  History is full of paradigm shifting occurrences, rooted in the
  dissatisfaction of a vast majority. French royalty learned the
  lesson the hard way and a little late. Let?s bring CEO
  compensation into the realm of reasonableness. Let's pay
  attention and do the right thing right. In reply to: "Are technology CEOs overpaid?"

  September 26, 2007

  0 replies