Japan Airline’s CEO Slashes his Pay Below the Pay of Pilots
By Barry Ritholtz - December 8th, 2008, 2:15PM
via Flixxy
"My formula for success is rise early, work late and strike oil." —John Paul Getty
Macro Notes
Consumer Credit continues downward trendPeter Boockvar
Consumer Credit outstanding fell $14.8b in Sept seasonally adjusted, almost $5b more than expected and marks the 11th month in the past 12 of declines. At $2.456T outstanding, it is 4.9% below the record high in July '08. After a flat reading in Aug, (didn't fall b/c of the CARS program), non revolving debt outstanding fell by $4.9B. Revolving (mostly credit cards) balances outstanding fell by $9.9B. To fully put into perspective today's data, look at the current level of consumer credit (doesn't include mortgages, the biggest chunk of consumer credit) relative to GDP. As of Q3, it totaled 17.2%...
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December 8th, 2008 at 4:02 pm
It would seem that CEO abstention from bonuses (and in some cases, even salaries!) is gaining favor, perhaps we are seeing the pendulum swing back on the ratio of executive compensation to average employee compensation …
(see figure 3, p 58):
http://faculty.chicagogsb.edu/workshops/AppliedEcon/archive/pdf/FrydmanSecondPaper.pdf
Although for it to get back to the 50X-60X regime that we had up until the 1990s, that may take a while.
In any event, prolly just another signpost on the way to the Twilight Zone, another indicator of how bent our economy has become. Ballooning debt, outa-control-leverage, and obscene executive compensation.
I would not mind seeing legislation to tax the living daylights out of corporations that pay, and individuals that receive, executive compensation above 60X employee compensation in public companies, on an averaged basis over the prior 5-to-7 years. Prolly not worth the time to legislate, tho’, as the corporation’s legal and accounting resources would be diverted from the important business of the company’s business to finding ways to shovel obscene amounts into deferred compensation plans, retirement plans, and golden parachutes.
December 8th, 2008 at 4:26 pm
Yikes! Don’t do that. Do you know what it’s like to read, “Japan Airline’s CEO Slashes..” the first time through when you don’t know how the sentence ends?
December 8th, 2008 at 5:15 pm
lots of talk about nationalized healthcare, the ongoing nationalization of wall street, and i propose (a nutso) nationalization of executive compensation:
http://www.gongszeto.com/journal/2008/12/3/ethical-capitalism-20-towards-a-nationalized-executive-compe.html
don’t freak out too much – it’s only a thought exercise.
best,
gong szeto