Another Example of an Overpaid CEO
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First, my thoughts on the whole issue of CEO compensation as a whole
Where does it end, I wonder? Exorbitant CEO pay packages, and the constant bogus justfication offered for why these big money deals are so necessary to attract highly skilled, and inventive businessmen who can drive the company into a money-making machine? These pay deals get bigger and better every year. And at whose expense? The regular workers, of course. Those who get their jobs slashed at the drop of a hat whenever the company starts to think money may be getting thinner. Those who have their jobs moved to other countries, and whose benefits get ground down to virtually nothing—that is, if benefits are even offered at all.
I've talked extensively on where regular wages and benefits have gone over the years in this country. And I can tell you the trend hasn't been up. Not when you compare what the markets did, and where corporate profits went over the period of growth after the Great Depression up to the Great Recession.
And let's face it. It's also the shareholders who pony up for these big money deals. How much bang am I really getting for my invested dollar with these guys at the helm? I'm inclined to believe, that if the truth is to be told, I'm being taken. My money is literally being pilfered, and I'm being sold a bag of goods by the boards of these companies that, "All is well. This guy'll make us all richer."
Come on. When exactly are they suggesting I fell off of the the turnip truck? Even they know that the reality of this is based on a very thin layer of proof. The shareholders are not getting nearly as rich as the CEO's are.
Are these guys really worth all that money? I mean, does anyone really believe that? Are they worth more money than the average production line worker, or the guy manning the cash register, or bagging the fries and a Coke? Yes. But worth millions upon millions of dollars more? I strongly suggest they are not.
The way I see it, CEO's are enormously over paid. I truly don't think that there is any other way of twisting that tale. The literal truth is that we've gotten to a point where even facing one of the worst of economic times since the Great Depression, CEO pay continues to be outrageous, exorbitant, and frankly ridiculous.
I've said it many times, and I'm red in the face over it. I have absolutely nothing against the rich. I am not a socialist. I am not a democrat. I do not believe in redistribution of wealth. I believe that success should be rightly rewarded. So should risk be rewarded.
Too often, however, this is not what's happening at all.
The latest example to illustrate my point
Take Mark Hurd, for example. He is the former CEO of Hewlett-Packard who will walk away from the company with somewhere around $40 million, depending on who you ask about it. In my view, he is but yet one more example of an overpaid CEO to hit the news wires. The kicker is that the $40 million is as a result of falsifying expense reports in order to hide the fact that he was screwing around with a female contractor—which was learned about after she came forward and claimed that she was being sexually harrassed by Mr. Hurd.
So, let me get this straight. You, Mr. Hurd, are esentially being paid $40 million for having broken company policy by falsifying corporate records, and for engaging in sexual harrassment? Perhaps you could elaborate on how many regular employees caught cheating on their mileage documentation, for example, might still get a nice paycheck after they are discovered, and either step down voluntarily, as you've decided to do, or been politely asked to pack up their office and leave? Perhaps you could elaborate on how many employees fired for sexual harrassment may have left the company with a big paycheck? Medical benefits? Dental benefits? Because you get those too, right, upon your departure?
You bet. $40 million, plus medical and dental benefits. That's one hell of a deal, is it not? A regular worker departing the company under similar circumstances, by most wording of the laws regarding this, would not even be entitled to receive an unemployment check.
May I just briefly sneak in a small comment here that this scandal will also cause the Hewlett-Packard stock price to fall. While shareholders are left to hold the bag, they also get to pay for the guy who brought the bag to them to hold onto.
And how much was Mr. Hurd paid in year's previous? In 2008 he made a whopping $42.5 million. In 2009 he took home another $24.2 million.
We need to be honest with ourselves about this issue
Somewhere in the grander scheme of things we simply must come back down to reality. We've got to come back to our senses. You can sit all day and make every argument in the world for why these guys are worth so much more money than the rest of us. None of it will wash from any rational perspective. What's going on with CEO compensation is just plain wrong, and we simply must admit that. Even if Mark Hurd did well for the company to justify a big paycheck in 2008, was that big paycheck really worth $42.5 million? And if it was so worth it, why did the company in 2009 suddenly decide that all salaries throughout the company had to be cut by 20%?
Well yeah, the economy happened. I think that much is clear. In any event. It doesn't mean anything less about CEO pay being over the top and ridiculous.
No government intervention, no caps
I'm not in any way suggesting we should allow a pay czar to set standards for CEO pay. I'm not suggesting that companies set caps for CEO pay. However, I do strongly believe that what we need to do is allow shareholders to have a direct opportunity to vote on all executive compensation—not the board of directors who are largely made up other company CEO's, former CEO's, and future CEO's, who all have a vested interest in keeping the money train well on its tracks. Yes. Leaving it to the shareholders does generally mean that the same guys may be making the decisions as they will likely hold the majority of shares.
Still, a lof of regular folks own shares either directly or indirectly, and their numbers could grow if they felt they were playing in a more fair game.
Last, a couple of closing thoughts
In closing I want you to consider two things. One, at $42.5 million (which I will concede is a bit higher than the norm) that means the CEO who is busting his rump at a whopping 80 hours a week is still being paid $10,216 an hour for his "good work." The average worker with overtime considered would earn around $23.17 based on an $18.54 national wage average for the same amount of hours. The CEO is really justified to earn roughly 440 times the average worker? Is he justified to get a severence package worth roughly the same—even when the severence is being paid for wrongdoing?
Two, here's a scenario for you to consider in all it's ridiculousness. Allow me to stretch things a bit here.
I have just completed my shift at my job at Coca-Cola Enterprises. Tucked in my bag I have hidden a stolen case of Coca-Cola. On my way to the time clock to punch out I fondle the breasts of one my female co-workers who's mouth immediately becomes a large letter "O." Just before I swipe my time card, a supervisor who saw me do this approaches me. "Mr. Bauer, you cannot do that. You are fired. And I know you have also taken some product as well. That will be in the report as well," he tells me, very matter-of-factly.
"Well, should I go ahead and punch out before I leave, or should I just assume you'll take care of the final punch for me?" I ask, as I begin to unload the pilfered case of Coke from my bag.
"Yes. I will take care of that. And you will also wait here, Mr. Bauer," the supervisor sternly asserts.
"What are you going to do? Call security? The Police?"
"No, Mr. Bauer. I'm going to write you a big fat check to take with you on your way out the door."
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You definitely made your point, Jim, with your concluding scenario of the fictional supervisor offering you money instead of punishment.
I've been following this HP story, too, and the entire scenario would be laughable if it were fictional but it is tragic because it is true. Another case of top brass lacking good sense as well as cojones.
Thank you for the Ship called She link.
I will take the other side, Springboard. He is responsible for the reviving of HP. His job makes jobs!!
For a company that big, it is not easy to do. He deserves his walk away fee.
As for his personal conduct, the "alleged" sexual harassment involves very big money BECAUSE he is CEO of a multinational corporation.
We can never know what happened between them. They are both adults.
Either way, if I were on the board of directors, I would have suggested to the Board that they "discipline" him, make him responsible personally for his conduct with the woman and convinced them to retain him.
It would have been different if a group of company workers in India unites that they were living under squalid conditions while he is getting paid big money.
But that is my point of view.
If the person is not worth that, why are they paying him that much money. If I owned a company, and I hired a person to run it for me who could make me a billion dollars in profit, I think I would pay him pretty well for it. There are limited amount of people who can do this well. Especially when another corporation could steal him/her away by paying them more.
This is a hard one. Especially when you see the CEO's making big bucks, and they are laying off on the other end, it seems a little bit like the CEO are losing some of the values, yet, the people would be layed off anyway, when it is a good business practice to do, even if the company is making a lot of money or not. The CEO has to carry this burden to do these decisions.
Also, CEO like this have to carry several million dollars of insurance to cover all the liabilities and lawsuits that are thrown his way. This is usually out of his own pocket, above and beyond what the corporation covers for him.
Keep on hubbing!
Jim,
You may be right, but why did HP stock go "in the tank" on the news that Herd was going?
Many stockholders must have thought that he was worth the money he was paid!!!!!!!!!!!!
I was once one of those CEO's. What about the .250 batting average for a baseball player? when your bad at your job, you need to go.
The same scandals are going on over here too. They crash the banks - get bailed out with public money - get a millions pounds bonus - For what? Let's face it they get fat salaries as it is. Does the clerk get any bonus because they doing their work? There is always a big uproar about it and it dies a natural death and they get their bonuses. Makes you sick.
really good work. I agree that the shareholders should have a say in all compensation packages. We all realize that our world is out of whack in many ways. I think of the pro athletes who get MILLIONS upon millions to play a child's game, act like children themselves, and also cash in on endorsements. Teachers are the force that TEACH these CEO's, doctors,lawyers, etc. However, teachers get the adage that "Those who can DO, those who can't TEACH!" It is a matter of priorities, and until those change, nothing else will.
Gee, I remember when one million dollars was a lot to pay a CEO. Reading your article, now I see what's happened, the boards all scratching each other's backs. Integrity must be a dirty word to these people.
I have to agree that CEO, CFO, COO, etc... of many corporations are quite overpaid, and it is the BOD's who grant the compensation, and it has gotten out of hand, the disparity from exec to worker, over the past decade for sure. BUT, most executives don't work a 40 hour week, have never worked just a 40 hour week in their entire working life, and usually they live and breath their job constantly, and the stress on home and family life is immense.
Some survive, some don't. Those who do become CEO's of the HP's of the world.
Also, though I don't recall you mentioning this here, legislating federal control over compensation of executives is about the stupidest thing I can think of at the moment -- overpaid exec's needs to die a natural death.
The solution is tough. I agree that it is a dangerous line to consider govt intervention.
Take a look at the previous CEO, Carly Fiorina. She drove HP into the ground and the stock dropped 68% under her leadership. (Comparatively over the same time period, Dell was up a few points). She was forced out by the board and a former founder of HP but still received $20 million severance. What is she doing now? She is running for Senate in CA and is being backed and championed by Republicans.
The reason people like Hurd succeed is because Americans have no memory. In 6 months he'll land somewhere making millions again. With his lack of integrity, he'd make a great congressman.
Nicomp, it's been something, whenever I see it on the ballot, I vote for. It's gaining some momentum, thankfully, as well. Each time it gets voted on it seems the percentage rises a bit in favor of it. I always vote against executive incentives if I know that regular employees are not offered incentives and bonuses as well.
Drbj, any time. I loved the hub. For me it comes down to being rational about things. EVEN IF Mark Hurd did nothing wrong, is he worth $42.5 million? $24 million? Is the CEO of McDonald's worth $17.5 million? We ALWAYS talk about cost cutting when it comes to companies. We talk about making hard decisions. We NEVER talk about CEO's or other executives giving up THEIR money. Even when they do slash their pay massively, it's still akin to winning the lottery every single day you step into the office. Technically, most of these guys could cut their pay 100% and still live extremely well. And that makes it laughable when you say to the people on the bottom rungs, "I've had to make sacrifices too."
Yeah. Right. What? You had to move from a 10,000 sq.ft. house to a 5,000 sq.ft. one? You had to trade in the BMW for a Cadillac? You had to downgrade from eating lobster every night to steak?
Pardon my French, but frankly I don't think these guys know a sacrifice from their ass.
Msorensson, I will agree that companies hire people. I've never disputed that. HP, overall, I will concede also provides fairly good paying jobs...it's a tech company and they tend to offer better pay and yes, even better benefits. Still. I just don't see the correlation between the two. The ends simply do not justify the means. Not when there is such massive disparity between his pay and everyone else's pay. It just doesn't wash with me. If you are an employee of the company, which is what a CEO is, you should be subject to the same rules as everyone else. You should be paid on the same reasonable basis as everyone else.
According to everyone at the top, everyone at the bottom is overpaid but the CEO is reasonably paid? Huh?
BTW, you think he should have simply been disciplined? Do you know how quickly companies fire regular people for exactly the things he did? You can't punch in 5 minutes late without being heckled, disciplined, and have your job waved over your head.
If I worked for Coca-Cola Enterprises and stole a $5 case of Coke, I would be fired on the spot for it. They fire me because stealing hurts the company's profits.
Scandals don't? Lawsuits from alleged sexual harrassment don't? Drops in stock price don't? Exorbitant pay for lackluster performance doesn't?
Mark Hurd's scandal, as I pointed out, will likely cause a dip in the stock price. That hurts the company. That hurts the workers who have a stake in the company's stock. That hurts the reputation of HP.
How much of this garbage was happening during company time by the way? On that $10,000+ an hour time...in the interest of keeping it real, here. A regular employee cannot even check his personal email for 30 seconds without someone coming around to tell him to get back to work or else. After all, doing personal things on company time costs money. It lowers productivity. God forbid you take a personal call on your cell phone.
If you don't offer regular employees money for getting it wrong when they are asked to leave, who would likely NEED the money and the benefits by the way, then why would you offer the CEO multi-millions. What kind of a DISINCENTIVE is that to do a bad job? If I knew I'd get paid regardless of what I did, would I really work that hard at it? Listen, so many people make the argument that getting a $300 check every week makes a guy too lazy to go out and get a job. So, you think that handing a guy $40 million DOESN'T make him give a care less what he does, how he does it, or how it affects the company?
It doesn't make one iota of sense to me.
In any event, I appreciate your opinion, even if in this particular case it disagrees with mine. :)
Springboard I agree with you 100%. I was asking my kids and their friends what they wanted to do for jobs once, as they were headed to a career fair. My daughter's friend said, "A CEO". I said, "Really, that's interesting, may I ask why?" She said, "Cause they make lots of money." I said, "Oh. Well what does a CEO do?" She said, "Who cares? They make lots of money."
This is entirely what is wrong with the entitled, instant gratification society we find ourselves surrounded by. We pay our professional football players millions of dollars a year, yet the teachers, policemen and firefighters in my town took a 7-10% pay cut this year. I have no doubts that the CEO's of these companies work hard, if they didn't, they wouldn't be where they are today. However, this is no balance in a world where a CEO or a tonight show host get paid MILLIONS to leave, yet a police officer in a small town has to work three jobs to afford to put braces on his daughter's teeth (Never mind the fact that he runs the risk of being killed every single day). Priorities and Balance. Loved this hub!
If you have a CEO that makes a company money, then they may be worth 40 million or more. Problem is that some of these highly paid CEOs make that kind of money and stink and then get walk away money. Seems like if you live by the bonus you should die(not get compensated)by the bonus when the company under performs.
Oh I love your answer. Thank you. No I was not aware of the things you mentioned about regular employees...
If I had my way, the next sound those kinda economic criminals would hear would be the command " ready, aim, fire!"
SB,
I have, lets say worked for a few companies- Of which- I have personally knownseveral of the CEO'S- COO'S and I have noticed a sharp difference with companies where the HEAD PEOPLE ACTUALLY CAME UP THROUGH THE RANKS, it seems people like that have a better outlook and a better handle on success once they get it-
they wetre the best to work for untilI left to go to a single guy owned businesman company that was the best-
TH
all perspective
Eovery, I have come to the conclusion that the "pedestal" we've put our corporate CEO's on is very overrated. These guys don't make tough business decisions, IMO. They make no-brainer easy ones. They cost cut not by improving efficiency, or by REALLY innovating product half the time. They simply cut jobs, reduce wages, lower benefits, and send jobs out of the country. Those aren't brilliant ideas. They are short term fixes that make them LOOK brilliant in the short term so they can make an argument for a great paycheck as revenues go up, and sales go up, and the share price goes up, and costs go down.
These guys are no great businessmen. Not all of them. You can spot a REAL businessman when you see one. And THOSE guys are worth the money. But they are few and far between.
Tom, it is not so much that, but the fact that a change of leadership causes uncertainty as to the future direction of the company. That's why the price drop.
Drchris, yes, and please the money at the door. If you do a poor job, should you get a huge multi-million dollar severence? The simple answer is no. The reality is, they do get them, and I think there is something very wrong about that.
Hello, in my view (and its not a popular one for a conservative such as myself perhaps) workers are treated like cattle led to the slaughter. Simply a means to an end and nothing more. It's deplorable.
Whats wrong with getting paid well for a job well done? He completely revitalized HP. Under his leadership, HP bought Palm and they will now be a huge contender in the tablet market with WebOS.
Sheri, in some ways I think it's different when we're talking about what athletes or actors, or mucicians get paid. I want to stress, in SOME ways it's different. I think athletes, in particular, are a bit overpaid. But the difference for me there is that there tends to be a more direct correlation between the players and the revenues they draw, or the actors and what they draw. People pay to see the person. In the case of a CEO, no one is buying the product for who is running the company. It's about brand equity, quality, performance, and that tends to be more related to the collective whole effort of the corporation rather than just one man.
Sheila, indeed. I really do think it comes down to that one word. "Integrity." I would honestly have some guilt and some shame if I were to honestly believe I was worth 440 times what the bottom of the rung was worth. If I looked in the mirror and saw myself, and didn't realize how much hard work, effort, and REAL sacrifice the average worker makes to put food on the table, and keep the machine running (the machine of the company of course, not necessarily an actual machine) that allows me to have my elaborate lifestyle, that would be shameful. CEOs sees regular employees as cost. They see them as a liability. They do not appreciate them, at least the majority of them do not. They talk about them as unskilled, and replaceable. A dime a dozen. It's shameful to me. It's also far removed from the reality. And if there ARE some employees who don't put as much effort forth as they might have in them to put forth, it might just be because putting forth effort for $23.17 an hour is simply not worth it when that effort translates to $10,000 an hour for a guy who probably spends a LOT of time on a golf course. Or on a yacht.
Not to say a CEO doesn't work hard. But let's not confuse an HONEST days work, sweating for a few bucks an hour with what a CEO does for that BIG paycheck.
Jessicababel, there's nothing wrong with getting paid for a job well done. In fact I applaud it. Mulally at Ford is a good example of a job well done, and I think he's worth MOSTLY every penny. He's actually got the workers in mind. I think that's a plus. He's done very well for the company, and workers have him to thank for keeping the production lines running to the best of his abilities, and keeping workers working.
Still, all things considered, he probably still is a bit overpaid, though I'm a little more okay with him in particular because of what he's been able to do with the company, and what I think is an honest commitment to keep his workers interested in making great cars.
Still. 440 times the average worker is justifiable? Come on. Really? When we sit here all day long and talk about cost cutting, it gets sickening when the conversation is always about the overpaid line worker. OVERPAID LINE WORKER? Really? The conversation is never about the CEO's pay. It gets sickening when we talk all day about "if we pay the workers more, they'll just get lazier." And then say, "If we pay the CEOs more, they'll go the extra mile." It just doesn't wash. It doesn't make any sense.
Aside from the whole pay issue, the severence package Hurd is getting is another thing that just really irks me. Most regular employees who leave under bad circumstances, which is WHY Hurd is leaving, are lucky to get a handshake as they get escorted out the door. THIS guy gets a $40 million deal.
To Msorensson I said, "If you don't offer regular employees money for getting it wrong when they are asked to leave, who would likely NEED the money and the benefits by the way, then why would you offer the CEO multi-millions. What kind of a DISINCENTIVE is that to do a bad job? If I knew I'd get paid regardless of what I did, would I really work that hard at it? Listen, so many people make the argument that getting a $300 check every week makes a guy too lazy to go out and get a job. So, you think that handing a guy $40 million DOESN'T make him give a care less what he does, how he does it, or how it affects the company?"
All I'm saying is that we have to be a little bit realistic about what a guy should be paid. We should be looking at three main things that are going to drive the company forward. The CEO. The shareholders continued investment. And the workers who make it all happen on a day to day basis to produce the products, get the products to market, and whatever else. All three parties must be kept afloat. All three parties must be incentivized. You can't take from one and expect the process to stay strong. If the WORKERS feel sleighted. If they feel cheated. If they feel they are not getting their share of the prize that is the result of their efforts, they'll expend less effort. They'll take less care in the product they make or the service they provide. And when they DON'T take as much care, who suffers are the top two. The CEO who gets blamed for lackluster performance and the shareholders who lose value in their investment.
Moreover, when you ask, "What's wrong with getting paid for a job well done?" I say, nothing at all, so long as everyone doing a good job is also paid for a job well done. Again, why is that "good job" phrase only applied to the top? Why is it we have this unwavering idea that everyone who punches a time clock is a lazy, bottom-feeding bum?
They work hard too. So, where are the bonuses for the employees? Where are the perks and incentives? Where are the big pay raises? Why can't a regular employee leave with dental and medical beneifts intact? Why are they only offered COBRA, which no one can truly afford without a paycheck coming in? Hurd is leaving HP with both, and surely he can afford private insurance on his own with the money he's made, and has, and will be leaving the company with. Employees on average see their pay increase by maybe 2% or 3% a year. CEOs often times see double digit increaes between salary, bonuses, stock options and other perks.
As to the WHOLE CONCEPT of getting paid for a job well done? Well, that's a SERIOUS question if you ask me. Bob Nardelli who made $100 million leaving Home Depot for poor performance is one shining example. The whole idea of the "golden parachute" is to cover your ass and loot the bank in the event the company decides they don't like you anymore...even if it's your own fault and you've done something wrong.
NO regular employee gets a deal like that. They're lucky if they get an unemployment check.
I think there is a HUGE difference between getting paid for a job well done and just getting paid to breathe and sit in a particular chair, and if you ask me, where we are at today is outrageous.
Excellent points - double standards are around. On Hurd I personally think a lot the revival of HP came from Carly Floriani not Hurd. She was shunted out for this guy after she did much of the hard yards. It takes a few years for such changes to kick in and it wasn't from his doing. Whatever we did we know the intent to deceive his shareholders and board was there - he admits that - pure and simple. If you do a good jib by all means be rewarded but don't take credit for something that you didn't do and secondly don't mock your share holders. In these tough times this should be clearer than ever.
Kflippin, I am not for salary caps set by boards or shareholders, nor am I for government regulation of executive compensation of any sort. That said, I do think shareholders should have a say, EVEN IF the majority of those shareholders who will vote are likely still the same guys who are on the board and in the executive offices. But I also believe ALL employees should also be paid in company shares to the tune of at least 10% of their total compensation. When employees have a stake in their company, they also have a much better and realistic opportunity to participate in the success of the company, and have a greater opportunity to achieve better earnings in their lives—I have always thought that if employees felt more a part of the system they would take more care and pride in helping it to prosper and grow, and that adds value to the company, the brands, and the shareholder's shares. Employees who own shares would also be more a part of the decision making process at the top, which I think is important.
As for the "hard work" of CEO's, I don't want to make it sound like they don't work hard. Of course they do. It is by no means a job without its stresses. But I still DO NOT believe that they are worth $10,000+ an hour, which is based on an 80 hour week (at the $42.5 million Hurd got in 2008), not a 40 hour week. I should also point out that most people in manufacturing do not put in 40 hour weeks either. Weeks tend to be more around 50-60 hours, and it's back breaking work sometimes in very unsavory conditions. Even at Skinner's (McDonald's CEO) lowly $17.5 million, an 80 hour work week would put him at $4,206 an hour, or roughly 400 times the average wage of the guy flipping the burgers. It's still not justified if you ask me.
LRC, I am not for government intervention. The last thing in the world I want is for the government to have any say whatsoever in what people get paid—minimum wage is another story. You have to at least have a starting point to work with. I just want to make that clear.
As for those severence packages, I dislike them way more than I dislike CEO compensation packages, and for the very reason I state in the article, and you stated in your comment. These severence packages are being offered to the tune of millions of dollars EVEN WHEN CEO's get it wrong, and make mistakes, or worse. Not a single regular employee in America gets rewarded for bad behavior. He does something wrong, and he gets a letter in the mail telling him his unemployment benefits have been denied because he screwed up and the company feels they shouldn't have to pay for that.
It's wrong. Plain and simple.
Sunflowerbucky, very well said. As for athletes, actors, musicians, I draw a slight distinction there—but I stress the word slight. I commented to Sheri Sapp, "The difference for me there is that there tends to be a more direct correlation between the players and the revenues they draw, or the actors and what they draw. People pay to see the person. In the case of a CEO, no one is buying the product for who is running the company. It's about brand equity, quality, performance, and that tends to be more related to the collective whole effort of the corporation rather than just one man."
Nifty@50, that argument is the one everyone likes to make, "If the CEO makes the company money he may be worth the money." It's way off base. When you do the math and look at the numbers that are out there, you quickly realize that what you get paid as a CEO really has nothing at all to do with how well you do AS a CEO. It has to do with how well you can negotiate a contract.
Interesting sidebar to think about; the first question an employer asks of YOU is "what can you do for us?" And the first question a CEO asks of his company is "what can you do for me?" Granted, you could say the board, before they offer the CEO a job, already has looked into his/her credentials. Still...
Look at all the multi-million dollar bonuses AIGs execs got? For a job well done? I hardly think so. Bob Nardelli of Home Depot took over $200 million when he left, and the company's stock price was down. Henry McKinnel left Pfizer with almost $200 million as well. Why did he have to leave? Pfizer's board thought he was a lousy CEO.
Great to be a lousy CEO and get $200 million.
Granted, these are high end examples. But the list goes on. But these are guys who get paid millions regardless of whether or not the company does well, and who enter into their CEOship with contracts that allow them to walk away with multi-million dollar severence packages EVEN IF things go sour.
NOT ONE SINGLE REGULAR WORKER GETS A DEAL LIKE THAT. I'm not shouting, just emphasizing. There is no way in the world anyone will ever convince me that what these guys get paid is justified. There are just too many examples to contradict that.
How we change that? Ugh. That's the $64,000 question. We know we HAVE to, and that we should. But how do we do it without caps, and without government intervention?
Msorensson, yes. Regular employees walk into the door with no benefits, no vacation, no sick days and they usually have a period of time where they have to be on their best behavior. Once they do obtain these things, benefits and vacation time, their jobs are always in jeopardy for a variety of reasons, including disciplinary ones. If they get fired or decide to quit, they have to fight the company to get unemployment in most cases. They do not usually get a severence package. If they DO get a severence package, it is rarely ever equivalent to a year's salary.
CEOs walk in the door with immediate vacation, immediate benefits, big bonuses before they've proven a thing AT THEIR CURRENT COMPANY, AND on top of that usually negotiate severence packages that are payable NO MATTER WHAT the reason is they will leave the company, and often times those severences are worth several times their salaries and bonuses and stock options combined.
If you get fired and walk away with multi-millions, what's your worry? The regular employee on the other hand has a LOT to worry about.
My goodness and I always buy HP printer etc, Disgusting, Thanks for your views and nice hub as usual, Maita
Carolina, can I be on the firing squad? lol. It's always a difficult thing for me to explain regarding where I stand on this issue because generally, as you know, I'm not against rich people. The issue of CEO compensation, and the issue of CEO severence packages is just something that really grates me when I think of how lowly regular employees are looked upon as.
Tom, good point. I have ALWAYS had far more respect for those who are true businessmen. That is, those who built nothing into something from the ground up. And yes, they better understand what the trenches are like, and I think often times when they DO know, they treat their emoployees a bit better.
Billy, the thing that irks me the most is when these guys walk away with so much money for getting it wrong. I keep going back to the regular employees because I think its important—when regular employees get it wrong, they lose their jobs, and they don't walk away usually with a single penny. They are lucky to get an unemployment check.
Maita, the sad part is that once you decide to buy a printer other than an HP, the next company in the limelight may just be the OTHER guy...the sad truth is that this sort of stuff happens all the time.
How much money is one man worth, employment speaking??
According to what I hear to be the logic, a CEO is worth it all, and a regular man is worth nothing.
More and more bad news keeps coming out on this incident with Hurd. Not good.
And still his $40 million check will be good, and many contracts just like his will continue to be written. That really is the crux of the issue, and the thing that I find most deplorable.
wow wow and wow, but this is the hard hitting great style of hub I've come to expect from you. Rated up useful and aweomse and stumbled upon... still $40 million and for what really?
Rebecca, thanks. Always a pleasure to hear from you. :) Yes. $40 million for what is the $64,000 question.
It seems money is the answer to everything for these guys, just toss some money at it, we have plenty so solve it, fix it and make it better with money after all they do really deserve it!!! Right.
Exactly. I think what CEOs deserve is probably about 25-50% of what they typically get.
Their pay is ridiculous and for what? The guys who work under them, do much more work with ofcourse much less pay.
Great Hub.
The "what" they do part is sort of like this for me. I'll agree the job of CEO is not easy. There are lots of things a CEO has to bear the weight of. As CEO if you get it REALLY wrong, and I'm talking Enron wrong, or Worldcom wrong, or something like that, you could actually go to jail. BUT, and this is a huge BUT, is that still to justify making 440 times the average worker? I say absolutely not. Should a CEO be paid more? Of course. But when it's 440 times the average worker it's not compensation. It's legalalized robbery.
Wealth has responsibility. This is a earthly commune where all on this earth should be lifting all on this earth. Only the spiritually stunted could approve of discrepancies like this. Great hub!
Essentially, I agree. I'm marking this on my calendar. :)
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nicomp Level 6 Commenter 21 months ago
It's easy enough to have a say. But a share of stock and attend the annual shareholder's meeting. Put your concerns to a vote. If enough people agree with you, it'll get done.