Here are the key data points:

• The average CASH payout for the top 25 execs at the 5 companies that were bailed out by Uncle Sam — AIG, Chrysler, GM, GMAC and Chrysler Credit — has been cut in half since 2008 to $469,777.

• For the top earners at those companies, pay is expected to fall by 11% to $1.62 million.• Total compensation is down nearly 77% from 2008.

• More than 70% of all approved compensation is expected to be given in the form of stock instead of cash this year.

Oh well, that’s what happens when you run your firm into the ground.

Here’s your NYT excerpt:

“For months, Wall Street banks and the troubled automakers feverishly protested that their top executives would flee if they were not lavishly rewarded for their talents. New data, however, suggests the departures were more of a trickle than a flood.

Of the 104 senior executives whose pay was set by the federal pay regulator in the last two years, 88 executives, or nearly 85 percent, are still with the companies even though their pay was drastically cut back, according to people briefed on the government data.

The relative stability, at least within the executive suite, suggests that a soft job market, corporate loyalty and personal pride helped deter the feared management exodus at the companies hardest hit by the pay rules.”

Gee, complaining execs turn out to be full of crap — who could have ever seen that coming?

One last note: None of this data includes comp from Bank of America/Merrill Lynch, Citi, Goldman Sachs, Fannie/Freddie, JP Morgan/Bear Stearns, Morgan Stanley or Wells Fargo . . .

>

Source:
Few Fled Companies Constrained by Pay Limits
ERIC DASH
NYT, March 22, 2010
http://www.nytimes.com/2010/03/23/business/23pay.html

Category: Bailouts, Wages & Income

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

8 Responses to “Overpaid Execs Over-Emphasized Comp”

  1. Bruman says:

    This isn’t a sophisticated argument, but it is a good one. You really have to wonder how many executives really deserve compensation that is 100-200 times the median family income, and whether it truly would be impossible to find a qualified person that might be willing to do it for maybe 10-20x, or even 5x the median income.

    Steve Jobs took a salary of $1 when he went back to save Apple (true, he had previously owned stock, but I think he still gets $1). Maybe some of the banksters should take a lesson from that.

  2. willid3 says:

    i always wondered just where the executives where going to go. its not like there are a lot of companies looking for executives from companies that failed is there? and if it was true of executives why wouldn’t it have been true of their other employees? the ones they don’t seem to care much about?

  3. ZedLoch says:

    “Gee, complaining execs turn out to be full of crap — who could have ever seen that coming?”

    I can think of a few commentators from various cable networks and newspapers who certainly missed it. But what’s funny is that nearly all of them are still eating the crap sandwich being fed to them and reporting it as delicious.

  4. destor23 says:

    Atlas Shrugged, Whined, Went To Work

  5. hammerandtong2001 says:

    The very concept that 100′s, even 1000′s, of overpaid financial industry executives would “flee” for greener pastures if drastic pay cuts were imposed was preposterous from the start.

    It was then, and remains, utterly false.

    I am reminded of a 2008 New York Post story about financial exec’s looking for new career starts after their employers went bust or tossed them out. One of the mini-exposes, cited a young lady, 29 yrs old, who was a mutual fund sales person. Her name was Megan and she was seeking to replace her lost annual salary which had been $325,000 the prior year (2007).

    And I know from first hand experience, that there are plenty of 29 yr old bond sales people who were earning multiples of that number, as well.

    Tell me, please do explain, precisely where these extremely overpaid people could go to replace these salaries.

    The answer is nowhere.

    We all complain about the high production costs associated with the US automobile industry. That labor unions have ruined the cars, and ruined the companies to boot. Yet the truly bizarre and misplaced pay incentives affecting the finanncial sector are perverse…and they led to the same place we foresaw the auto comapnies heading — in a spectacular blowup and meltdown.

    Why these people were paid (and in many cases still are) these egregious amounts is one of the central problems here.

    .

  6. John says:

    “For months, Wall Street banks and the troubled automakers feverishly protested that their top executives would flee if they were not lavishly rewarded for their talents.”

    So what if they did leave?!?

    The situation also demonstrates a severe lack of succession planning, which is yet another failure of top management and the board of directors.

    If the bailouts had to happen, the conditions should have included that the entire board of directors and executive team were fired, and until the taxpayers’ money is returned the new executive team gets paid no more than government wages.

  7. jimc1004 says:

    “Oh well, that’s what happens when you run your firm into the ground.” ? ? ? ? ?

    “…nearly 85 percent [of top executives, NOT 29 year old traders], are still with the companies…”

    I doubt that 85% of the employees from, say March 2007, are still working at any of those companies.

    This is another example of “pay for performance”:

    When you work extra hard the CEO gets an even bigger bonus [and you get excuses],
    and when the CEO drives the company out, or nearly out, of business your pay
    is a pink slip for his ‘performance’.

    The top management should be totally eradicated [with major claw-backs of unearned and excessive compensation], and then there should be a Pecora Commission II to investigate the rats who also committed crimes.

    As 19th century labor organizer, Mother Jones told a man in prison for stealing a pair of shoes, “Why son
    if only you had stolen a railroad instead, today you would be a US Senator instead of being in here”.

    Or, as trust buster Teddy Roosevelt said, “A man who has never gone to school may steal from a freight car; but if he has a university education, he may steal the whole railroad”.