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Old 06-27-2012, 01:04 PM   #16
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The context is that the companies are not making money or are making less money than in the past (where would dividend cheques come from if there's no retained earnings?) yet big bonuses are being paid out.
If you're making less money than in the past, but you're still making money, and your stock is holding up reasonably well and the dividend cheques are coming out, most shareholders don't give a half a crap that the CEO pay is increasing disproportionately compared to their returns.

There are some things that have been introduced, like say-on-pay resolutions and so on but most of these are without real teeth.
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Old 06-27-2012, 01:23 PM   #17
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most shareholders don't give a half a crap that the CEO pay is increasing disproportionately compared to their returns.
They should or else they are crappy investors, which is probably the case.

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There are some things that have been introduced, like say-on-pay resolutions and so on but most of these are without real teeth.
That's the problem how do we get some teeth into resolutions or regulations without overdoing it? The board of directors don't seem to be scared of being fired by shareholders.

Then when you have low interest rates constantly there's not much incentive to invest in safe investments so it's another reason why investors don't mind risking more. And we are also talking about investors. Many people don't have much investments but larger amounts of debt so it's easy to see a shrinking middle class.

I guess the best revolution there is is a grassroots one where people force themselves to spend less and invest more (in safer low return investments) which will provide the incentive for companies to offer more to shareholders. Also when people are not over consuming companies have to adjust to clients who aren't addicted to their products and at some point the CEO pay will have to be addressed by the company themselves if they want to survive. When the economy recovers the government will have to slowly raise interest rates and try much harder to keep gambling bubbles misallocating a large portion of the economy's capital. The key is that the general public has to show some savings over time and the ability to retire. That's the best signal I can think of, otherwise there will be a pyramidal society where the bottom will revolt and maybe institute an even worse tyranny (Soviets, French revolution terror). That would be a shame to repeat that.
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Old 06-27-2012, 03:46 PM   #18
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pparently our economy has dictated these people deserve an annual income of such a ridiculous amount

if they don't get these payrises someone else will offer it to them
free market and all
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Old 06-27-2012, 04:07 PM   #19
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Why can't large companies save money by exporting the top management jobs to India? As the cost of living is cheaper, an Indian, even a top manager, would work for much less. That's globalisation, right? Free market and all that?
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Old 06-27-2012, 04:19 PM   #20
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hey did you hear about Barclays getting fined 290 million today? 'bout time too!
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Old 06-28-2012, 08:38 PM   #21
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RBS and Lloyds drawn into rate-rigging scandal - Telegraph
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Old 06-29-2012, 06:06 AM   #22
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I don't support execs making ridiculous pay levels, but at the same time I don't support legislators out for their own self-interest imposing arbitrary limits pulled out of their asses on those executives' pay levels.

What's a guy like me to do?
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Old 06-29-2012, 06:08 AM   #23
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(double post)
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Old 06-29-2012, 04:11 PM   #24
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I don't know a lot about economics and business here, but why couldn't we just set a requirement that the CEO can't make over a certain amount times the average worker? For example, a CEO can make whatever salary he wants as long as the other workers' pay increases as well.

I'll use the highest CEO-to-Worker pay average behind the United States as an example here, which is 50:1 in Venezuela.

If the average worker is making $30,000 a year and the CEO makes 50x that, that's $1,500,000. If the company was doing really well and the CEO wanted to make $3,000,000 the average worker would also take a double increase in pay. The max limit could be changed based on the number of employees a company has etc. This isn't really a foolproof way of doing things, but it can prevent ridiculous crap like an employer making 400x what his average worker makes.
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Old 06-29-2012, 04:36 PM   #25
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I think they have that precise system in some of the Scandinavian countries. I personally have reservations about that approach. I think it's better to use moral suasion rather than the blunt instrument of the law. But, we have to face up to the fact that a portion, possibly a substantial portion, of business leaders are apparently greedy sociopaths. Greed, well, that is just a human instinct that when acted upon can have good and bad results. Sociopathy, though, can be dangerous for society, particularly when combined with greed.
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Old 06-30-2012, 12:16 PM   #26
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I think it's better to use moral suasion rather than the blunt instrument of the law
The thing is that in a population of individuals, there are always going to be a percentage of assholes that ruin it for the rest of us if we rely solely on people doing the "right thing" and not gaming the system or abusing it.
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Old 06-30-2012, 12:45 PM   #27
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I think they have that precise system in some of the Scandinavian countries. I personally have reservations about that approach. I think it's better to use moral suasion rather than the blunt instrument of the law. But, we have to face up to the fact that a portion, possibly a substantial portion, of business leaders are apparently greedy sociopaths. Greed, well, that is just a human instinct that when acted upon can have good and bad results. Sociopathy, though, can be dangerous for society, particularly when combined with greed.
Yet economists also can write about morality but that gets ignored my pathological narcissists:

The Theory of Moral Sentiments - Wikipedia, the free encyclopedia

http://www.mises.org/books/foundationsofmorality.pdf

Usually it's the grassroots that make the biggest change in society when they are really motivated. Top-down solutions can have only limited effects and sometimes too much power corrupting lawmakers and leading to the exact same problems we are trying to avoid. (eg. colonialism).
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Old 06-30-2012, 02:46 PM   #28
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The biggest trouble with trying to create a plan like that is that it's tricky. Some companies have tens of thousands of employees, or hundreds of thousands, around the world. How do you scale for something like that? There has to be a good profit margin and middle ground and there's a lot of complicated stuff that I can't even begin to understand about economics and how businesses are run.
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Old 06-30-2012, 07:40 PM   #29
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hey did you hear about Barclays getting fined 290 million today? 'bout time too!
Lot of fallout from this one, the UK government are really pissed off - probably because it effects the reputation of UK plc as a trustworthy place to do business. It's highly unusual to see conservative ministers directly calling for bankers heads on plates.


Vince Cable tells shareholders: throw out bank cheats | Business | The Observer

Barclays: Osborne Slams 'Systematic Greed'
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Old 07-02-2012, 02:58 AM   #30
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Lot of fallout from this one, the UK government are really pissed off - probably because it effects the reputation of UK plc as a trustworthy place to do business. It's highly unusual to see conservative ministers directly calling for bankers heads on plates.


Vince Cable tells shareholders: throw out bank cheats | Business | The Observer

Barclays: Osborne Slams 'Systematic Greed'
sure, but what really pisses me off about this apparent government U-turn re. wbankers, is that these people have not been called to account because they brought the country to its knees economically, but simply because they have damaged the "image" of the City of London and, more importantly, have been caught with their pants down
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