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4 Responses to “Obscene Profits for CEOs”

1. alfred e Says:
   June 12th, 2009 at 12:18 pm

   Maybe that explains the PPT. Juice your stock using TARP funds to max your options. Now push the sell button.

2. dss Says:
   June 12th, 2009 at 12:44 pm

   I am still pissed that Henry Paulson was able to get his Goldman stock sale free of capital gains because he joined the government.

3. leftback Says:
   June 12th, 2009 at 1:21 pm

   @dss: LOL. Not to mention Liddy will be selling his GS and get some big fat consulting fees. It’s all about timing !!

4. constantnormal Says:
   June 12th, 2009 at 1:32 pm

   I actually favor a plan such as this.

   The difference would be that instead of bargain-basement stock options, I would favor LEGISLATION mandating that the stock-based incentive compensation be rigidly structured, something like restricted shares or european-style options that cannot be exercised before expiration with a strike price fixed at something like the 7-year moving average stock price at time of issuance. Add in a small fixed cash compensation, something like a maximum of a hundred grand a year, with limits on the dollar value of the stock-based incentives scaled proportionately to earnings, and I think there is a workable scheme that lets the air out of executive pillaging of corporations.

   The logic being that CEOs should not require hefty cash compensation, that their gains should be tied directly to the performance of the stock, and the incentives tied down sufficiently to make it very difficult to game the system.

   It would certainly alter the motivations in the CEO community.

   Privately owned corporations, can of course, pay their CEOs whatever they like, and in whatever form they desire. But publicly-owned companies should operate under a tighter set of rules. In the mythical days of yore, the thought was that a vigilant body of stockholders would ride herd over the management. But that never worked out to begin with, and in any event, these days the bulk of shares are not voted by individuals, but rather by various types of funds and holding companies, who are even more lax than individual stockholders at policing management looting of the company.