Leon wrote:
"Tim Daneliuk" wrote in message
...
Upscale wrote:
"Robatoy" wrote in message
The big 3 corporate automotive clusterfarks need to be taught a lesson,
Absolutely. Included in that lesson should be a sizable contingent of
CEO's
and every other person in the companies with golden parachutes and
ludicrous
$$$ plus salaries.
If those executives worked for absolutely nothing - no base, no bonus,
no stock options - it would make NO difference in the earnings of the
companies in question. The P&L of manufacturing companies is
dominated by the cost of labor. But it's fun to hate people with
more money than you, eh?


You can look at that way but the fact that most CEO's have a golden
parachute there is no incentive to make a company perform better.


I am not "looking at it" in any particular way. Businesses exist
solely to make money for their owners. When they fail to make money,
we who own a piece of them (as most of us with retirement funds and/or
multual funds and/or ETF postions ... i.e., Most of the working
class), should be asking *why* they are not profitable, not flogging
the anti-Capitalist Marxism so popular with the new administration,
not to mention many of th the voices here on the Wreck.

The reason the Big 3 are in trouble financially has *nothing* to do
with executive compensation. It also has very little to do with the
quality of their cars or whether people like their products. In actual
fact, Detroit has never built better, more reliable cars that today
are easily on par with the best of Japan or Europe. (Despite what the
half wits in the media and those who believe them on their face say to
the contrary.) No, Detroit is in trouble because their labor costs are
out of control, and the structure of their bargaining unit labor deals
is flatly insane. If you want to blame the executives for something,
blame them for not standing down the sleazy, greedy union leadership
and membership and forcing them to live in the real world.

Your or my lack of wealth is not caused by someone else having wealth.
This is a lie to its foundations, but it is subtly peddled as fact
by misbegotten threads like this. I do not begrudge anyone any amount
of wealth so long as they did not steal or defraud to get it. The
reason the corporate CEOs get these big exit packages isn't that
hard to figure out:

1) There are few people in the world with the experience and brains
to run a $100+ Billion company. Constrained supply creates high
salaries and packages.

2) It used to be that execs made most of their money on stock options.
Then the 1990s came along and people saw these options vault into
the stratosphere in value - mostly in the IT sector. The usual
class warrior crybabies started whining about "execessive CEO pay"
and many companies stopped handing out options and paid higher
salaries instead. This is tragic, as stock options and grants
are the best way I know to incent a leader to make the company grow.

3) It is the Board Of Directors that sets executive compensation. The
BOD answers to the stockholders. Guess what? Most of the stockholders
are actually fine with the current executive comp. If they were not,
they'd stage a stockholder revolt and throw out the incumbent board
and executives. The stockholders, BTW, are mostly folks like us -
individuals who own a piece of these big companies via some kind
of fund or aggregate investment vehicle. If everyone is so upset
about executive comp, why do they not rise up and do something
about it?
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Tim Daneliuk
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