Comments on: “Bad” CEOs Who Walked Away Rich

By: Creative Investor

Creative Investor — Tue, 13 Nov 2007 05:25:56 +0000

SpokaneAL: I have to disagree with you on two points here: 1) It doesn’t matter when the pay was negotiated, the point is that it should have been tied to their performance. It is not THAT difficult to create an attractive pay package that rewards most those who perform best. There are many, many great CEOs who received only a fraction of what these “bad” CEO’s got, and guess what, they’re not complaining about it because they have these two little things called…integrity and humility. 2) I don’t see any correlation between celebrities/athletes pay and CEOs pay, you’re comparing apples to oranges. I don’t care what athletes get paid, I don’t invest in them, its effect on me is pretty pretty minuscule if any. Companies, on the other hand, I DO invest in and the people who run it are essentially hired by me, the shareholder, to do a good job and get paid accordingly. When they’re getting paid huge sums no matter the outcome, they don’t have an incentive to create value for shareholders and that DOES affect me.

By: Spokane Al

Spokane Al — Mon, 12 Nov 2007 17:42:13 +0000

One thing worth remembering is that these pay packages were negotiated on the front end of the contract, when the corporations were in the search for a CEO.

While we may be offended by the dollar amounts, this is a function of supply and demand. These dollars are the costs of bringing in a person of CEO caliber.

I always find it interesting in that there is little out cry over professional sports starts and/or entertainment people’s huge, mind boggling pay packages.

Why then are we so offended by the corporate world’s pay structure. It is often performance driven and the golden parachutes are constructed as a part of the package.

As far as the military goes, you can see supply and demand in action there. In job shortage areas bonuses are created and offered to bring in additional people. If the numbers come up short, the bonuses are increases until market equilibrium is met. The only difference is that the supply and demand curves meet at a much lower pay level than these CEO pay scales. It is not better or worse – it just is what it is.

By: Swim Upstream to Wealth

Swim Upstream to Wealth — Mon, 12 Nov 2007 15:56:22 +0000

What bothered me most about Grasso’s original pay package was he received an enormous raise because he got the NYSE back up and running shortly after 9/11. But, his job was to keep the exchange operating effectively in all conditions. So why get more money for merely doing what he is suppose to do.

Do soldiers get more money if they endure a particularly aggressive battle? No. Do teachers get more if they have a class with a higher number of disruptive children? No.

He was doing his job. No need to get a higher pay package and to complain about it.

As far as the other CEOs, it is disgraceful what they earned for poor performances. Maybe we should start outsourcing CEO jobs to China as well. Probably save millions.