Salary: $144,573 per day for 13 years

The market may be less arbitrary than specific regulation, but is, nonetheless, an evolving artifact, not a given. They’re not always self-correcting; they’re not always the best means of distributing resources.

The compensation is legal, and the shareholders are being directly harmed by it. It’s their money that’s being dished out by the bucket load. (A search on “shareholder activism” may kick out a few more convincing arguments.)

Society is being harmed by it, to the extent that a reasonable degree of economic in/equality is a component of a healthy society. Disparities of wealth & reward of this degree aren’t so much a spur to succeed as they are a slap in the face.

The companies are being harmed, to the extent that they–or the stock market–buy into the notion of the ‘great leader’. That sort of thinking helped can Douglas Ivester at Coke following Roberto Goizueta’s death, and Coke’s been a basket case ever since. When Jack “Manager of the Century” Welch left GE, it’s stock dropped and didn’t regain lost ground for a year. Maybe not a big deal considering the growth GE enjoyed during his tenure, nor considering that the stock price is higher today than it was when Jack left. Nonetheless, the sudden loss of faith in the guy at the top was an obvious challenge. (Jack’s reputation took something of a dive following retirement as well… a necessary downward correction, I think.) Also off the top of my head, Michael Eisner played nice with his management team at Disney until, apparently, he learned to love the CEO super-star limelight. Playing the great man ended up costing the company personnel, money, and Mike his job.

CEOs are important, but they’re not worth this much.

Don’t CEOs in positions like that often get some kind of stock hook ups (free stocks)? Then, when they make the company kick ASS they get a bunch of money from stock too, right? I’m willing to bet that figure must include that and all kinds of bonuses we don’t know about.

If he started 13 years ago and then company was doing ass (not good), got a bunch of stock then, then over the period of 13 years made the company kick ass, you’ll probably be able to see how it makes sense. Does anyone know what his “actual” salary was? If I’m not mistaken the best of the best CEOs “only” make in the hundreds of thousands (salary wise.) They get the rest through performing. He obviously performed (for 13 years.)

That’s my guess, pardon me if I’m wrong.

I think you could find out his real salary from the company’s annual reports to shareholders. That is, if you really care. I’m to lazy to look it up myself.

All I know is, I should have gotten into the oil business like a good Texan. Instead, I’d be lucky to make in a year what this guy averaged in one day. :slight_smile:

Yeah, and excellent job. Now I’ll go have that tallboy and continue to listen to you intellgent folk, :laughing:

certainly not always, but as far as proper salaries for employees i’m sure companies aided by market forces will do a perfectly fine job of deciding what is advantageous without regulation.

given the figures in the op i’d say that shareholders don’t have much cause to complain here. a quick websearch turned up shareholder protest against exxon on a variety of issues but i didn’t notice any protests about the company’s performance! exxon claims his compensation was tied to that performance.

I think you overstate this case. if he made 50 million or 500 million there is a large disparity between him as an individual and the majority. in either case the contribution to overall disparities is marginal. you could say it is a powerful symbol of disparity but i can’t see regulating salaries on that basis.

if not that is best left for companies themselves to decide.

Of course, I was just joking. I don’t see anything wrong with this picture. Do you?

What’s obscene is that CEO pay is often not tied to metrics that matter, and that shareholders these days tend to be passive investors who regularly vote the board’s recommendations.

By metrics that matter, I go back to the point several others made that Exxon’s performance in the last few years has been a cakewalk as it has been for every other oil company. If you only go by the metric of ‘did he increase earnings’ it’s not terribly meaningful. A more meaningful metric is did he increase earnings more than the industry average. That’s something a CEO can actually influence.

You also hear a lot about some CEOs who are given generous packages totally unrelated to any performance metrics at all. I’ve heard of a couple of cases where a CEO takes over, makes things worse, and then when the board finally gets around to firing him they have to fork over a huge severance package he had negotiated into the contract. That sort of thing is nuts.

And this all ultimately is the shareholder’s responsibility. They are the owners of the company and should have the ultimate say in how it is run. Unfortunately it’s usually the board who makes all the real decisions and occasionally gets the shareholders to rubber stamp their approval. The board is usually made up of people who want CEO compensation to be high because they are CEOs of other companies themselves.

Another aspect is that the boards and shareholders tend to pay more attention to short term metrics than long term. This is why you get things like bean counter CEOs that go in and start cutting costs everywhere to increase the bottom line. There’s usually room for some cost cuttings in any company, but it’s way too easy to strangle the life out of the company with cost cuttings to the point where r&d of new products dies, customer service goes down, and good employees are more interested in jumping ship.

If you just look at earnings this sort of CEO looks great, but the company has a good chance of ending up in worse shape long term. I’ve been reading a lot of information about business books and one point I’ve seen over and over is that the only two ways to improve business is to cut costs or increase sales, and almost invariably the advice is to put more emphasis on the latter. Shareholders almost always look only at earnings, and it’s a lot easier to get quick results there by cutting costs.

jlick -
Your conclusion is what it all comes down to.
Cut costs or increase sales. Thats the basics. Run leaner or sell meaner.
It ain’t rocket science at that level.

And BTW…I have no rancor for the deal this guy got.
I’d take it in a NY minute… :sunglasses:

To tie this is with [url=http://tw.forumosa.com/t/early-to-rise/26020/1 discussion[/url] here, there’s a good article on CEO compensation in Monday’s edition of the Early To Rise newsletter:

Compensation: How Much Is Too Much? (about 1/4 of the way down)

jlick, that’s a far more sensible approach, imho.

[quote=“TainanCowboy”] And BTW…I have no rancor for the deal this guy got.
I’d take it in a NY minute… :sunglasses:[/quote]

Entirely beside the point. People will take whatever you give them. The question is whether they deserve what they are given. This guy was rewarded for price gouging. In an old west, rough and tumble, dog eat dog pure capitalist system that “might” be considered OK. In a modern, complicated, interconnected world with a thousand times more problems than solutions it is obscene. Absolutely disgusting.

Another CEO in the news who received obscene compensation for a lousy performance (by my calculation, $109,589 per day for 6 years of failure). That’s the kind of job I want.

[quote]Robert L. Nardelli, the chief executive of Home Depot, who came under heavy criticism for his pay package and failure to lift the chain’s stagnant stock price, has abruptly resigned, the company said today. . . He will receive about $210 million in compensation from the company. . .

The unexpected departure of Mr. Nardelli caps a tumultuous year at the company. . . Shareholders had begun to openly question the company’s direction and Mr. Nardelli’s leadership, and the board was under considerable pressure to make a change.

Within the past month, one activist shareholder, Relational Investors, said it would propose that an independent committee evaluate the company’s direction and management.

In a letter to Mr. Nardelli, the firm said Home Depot’s stock had underperformed since 2000 because of “deficient strategy, operations, capital allocation, and governance.”

Under Mr. Nardelli, the Home Depot shifted its focus . . . But the strategy did not improve the retailer’s share price, frustrating investors and Wall Street analysts. In recent weeks, Home Depot’s stock has been trading near $40 a share, about where it was when Mr. Nardelli took over.

Wall Street welcomed Mr. Nardelli’s departure. Home Depot’s shares gained 91 cents, or 2.3 percent. . .

Because of the flagging stock performance, investors began to focus on Mr. Nardelli’s compensation. Since he was hired as chief executive six years ago, the board has awarded him a total of more than $240 million in salary, bonuses and stock grants. . . [/quote]
nytimes.com/2007/01/03/busin … depot.html

And another.

[quote] [color=#BF0000]Need a Job? $17,000 an Hour. No Success Required[/color]

Are you capable of taking a perfectly good 158-year-old company and turning it into dust? If so, then you may not be earning up to your full potential.

You should be raking it in like [color=#BF0000]Richard Fuld, the longtime chief of Lehman Brothers. He took home nearly half-a-billion dollars in total compensation between 1993 and 2007.[/color]

Last year, Mr. Fuld earned about $45 million, according to the calculations of Equilar, an executive pay research company. That amounts to [color=#BF0000]roughly $17,000 an hour to obliterate a firm.[/color] If you’re willing to drive a company into the ground for less, apply by calling Lehman Brothers at (212) 526-7000. . . .

Three decades ago, C.E.O.’s typically earned 30 to 40 times the income of ordinary workers. Last year, C.E.O.’s of large public companies averaged 344 times the average pay of workers.

John McCain seems to think that the problem is that C.E.O.’s are greedy. Well, of course, they are. We’re all greedy. The real failure is one of corporate governance, which provides only the flimsiest oversight to curb the greed of executives like Mr. Fuld. . .

Perhaps it’s understandable that C.E.O.’s are paid heroically when they succeed, but why pay prodigious sums when they fail? E. [color=#BF0000]Stanley O’Neal, the former chief of Merrill Lynch, retired last year after driving the firm over a cliff, and he walked away with $161 million.[/color]

The problem isn’t precisely paychecks that are huge. Baseball stars, investment bankers and hedge fund managers all earn obscene sums, but honestly — through arm’s-length transactions. You and I may gasp, but that’s the free market at work.

In contrast, boards pay C.E.O.’s after negotiations that are often more like pillow talk. Relationships are incestuous, and compensation consultants provide only a thin veneer of respectability by finding some “peer group” of companies so moribund that anybody shines in comparison. The result is what critics call the Lake Wobegon effect, which miraculously leaves all C.E.O.’s above average. Indeed, one study of 1,500 companies found that two-thirds claimed to be outperforming their peer groups.

John Kenneth Galbraith, the great economist, once explained: “The salary of the chief executive of a large corporation is not a market award for achievement. It is frequently in the nature of a warm personal gesture by the individual to himself.”

There are widely discussed technical solutions to C.E.O.’s overpaying themselves that we should move toward. We can also learn from Britain and Australia, which offer shareholders more rights than in America, redrawing the balance between shareholders and management and curbing pay in the process.

As for Mr. Fuld, unfortunately, he had no comment for this column. At $17,000 an hour, it probably wasn’t worth his time. [/quote]

[quote=“Mother Theresa”]Seriously!

That’s what the head of Exxon Mobil earned: $144,573 per day, every day for 13 years, or a total of more than $686 million for his service from 1993 to 2005.

True, he performed well, increasing the company’s market value fourfold, to $375 billion. But still, such compensation seems slightly obscene and inappropriate. Is anyone’s time really worth $6,023 per hour, or $100 per minute, 24 hours a day for 13 years?

nytimes.com/2006/04/15/busin … ei=5087%0A[/quote]

He performed well. Or oil became expensive. Or did any of the others 1000s of managers or workers not have anything to do with it :unamused:

Simple idea: If you don’t like the way a company is run, don’t buy its products (or use its services), work for it or invest in it. Patronise, work for, or invest in, companies that meet your ethical model.

It’s like people complaining about any other so-called unethical practices. If you don’t like Big Tobacco, then don’t buy cigarettes, work for a company that makes them or invest in them.

Is this rocket science? Live life on your terms, create the world in your image.

What’s obscene to me is the constant whining by people who go through life with absolutely no will to power who then complain about others who see life’s opportunities and grab them by the balls.

Your idea is simple alright.

I guess you could live in North Korea and grab your life by the balls there, or perhaps India or China or Africa as a farmer.

[quote=“bob”][quote=“TainanCowboy”] And BTW…I have no rancor for the deal this guy got.
I’d take it in a NY minute… :sunglasses:[/quote]

Entirely beside the point. People will take whatever you give them. The question is whether they deserve what they are given. This guy was rewarded for price gouging. In an old west, rough and tumble, dog eat dog pure capitalist system that “might” be considered OK. In a modern, complicated, interconnected world with a thousand times more problems than solutions it is obscene. Absolutely disgusting.[/quote]

I agree. There’s lots of people saying I’d take this or I’d go for this. But you depend on society the helath of the environment and it’s relative fairness to you (as compared to the middle ages for example) to give you a chance at education, freedom, clean air and water and medical treatment.

A person would have to leave human society in order to not participate in the oil economy, in order to not contribute to the obscene earnings of people whose values likely run entirely contrary to his own and who by virtue of their inordinate power push society in directions that he does not wish to see it go. Or do you imagine this fucko is big on green living, solar power and mass transit?

It must have taken me nineteen minutes to write that last post. Fortunately I was not paid 100 dollars per minute for such efforts because if I had been I would undoubtably spend it on a gas guzzling jet ride somewhere out into the pacific. Guam maybe. Such is the life of the conscientious hypocrite, painful really.

Some people have absolutely zero vision, as though the choice is between the U.S., some third world shit hole, or living like a hermit in a cave.

What about what’s happening in several other developed nations right now? Many places (eg. Sweden and Denmark) are moving rapidly away from the current paradigm towards a greener model, for instance. Is it Sweden that’s planning on (and taking serious measures towards) being off oil by 2020?

How did society get to where it is? How will it get to somewhere else? If people fatalistically say that some guys at the top will decide for them, then that’s a self-fulfilling prophecy. People in the U.S. could form their own communities, take over whole states in fact (some of those wacky libertarians have the idea with the Free State Project, though they can’t organise themselves to save themselves), vote for other parties even. Little of this happens though, so on some level, people must be somewhat happy with the status quo.