This is not a role for government
Some corporate executives in the United States are paid outrageously high salaries. Notice we did not state that they "earn" their compensation packages.Some do not. Some who receive eight-figure salary and benefit deals have driven their companies into the ground during the past several years.
But should government dictate what people are paid in the private sector?
Absolutely not.
Keep in mind that some executives guilty of mismanagement while receiving astronomically high compensation packages were praised lavishly by the very members of Congress now eager to become involved in how executive pay is set. Need we remind you of the praise liberal lawmakers had for former Fannie Mae CEO Franklin Raines?
Companies that have received federal help through the Troubled Asset Relief Program will have their compensation programs reviewed - and perhaps revised - by federal officials.
But President Barack Obama and Treasury Secretary Timothy Geithner also want a federal role in compensation at other companies.
According to one report about the plan, it would "give shareholders a nonbinding voice on executive pay." Corporations' shareholders already have a voice in how their companies are run - and it is binding. Should a majority of shareholders decide they don't like a firm's managers, they can replace them.
While shareholders may not have exercised that power much in the past, we suspect they will be more eager to do so in the future. The White House and Congress should not interfere.
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Anderson
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06-24-09 9:50 PM
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May I ask on just what EXPERIENCE you base those assertions, thendrickson?
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MontanaDan
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06-22-09 7:03 PM
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Not to change the subject even though you all have some good points, I was just reading a article from the AP and the head line was about the President signing some great legislation on smoking and is a real good law, I wanted to learn more about it and the whole story ended up being about the President smoking nothing on the law at all. Is journalism dead the people who we trust to get our info need to get their heads out of their a**es and actually write good articles, I don't care what the article is about, just give us good nonbiased journialism and let us decide!!!!!
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Anderson
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06-22-09 3:49 PM
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The incentives are mostly perverse for managers and stockholders, thendrickson, which focus their interest in short term profits and capital gains rather than in longterm growth and profitability. Management compensation via relatively short term gains on stock options is among the most perverse of management incentives.
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Anderson
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06-22-09 9:17 AM
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US tax legislation favors the legerdomain that creates unnecessarily large - indeed, gigantic - conglommorates that become neither innovative or efficient. Quite the opposite. Most of the top execs' time is spent figuring out the tax advantages for themselves and the major shareholders, but that is a fool's errend that leads ultimately to decline for those left managing the ruins and with stock held too long. When a major company - actually, $2.8 billion in production is several countries - spends 62 cents in accounting/legal cost for every dollar the US get from it in taxes, you know something is out of joint taxwise. I spent about 65% of my time as an exec on tax angles. Lord, what a nightmare it must be becoming now. Solution: No taxes on undivided business profits, then businesses will get honest and become internationally competitive. The more govt rules, the more legerdomain.
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Skippy
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06-22-09 8:58 AM
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jaybares, you couldn't have said it better.
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jaybares
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06-22-09 8:38 AM
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Huh?
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stillcrazyme
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06-22-09 2:57 AM
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hahahahah how bout if the company makes 10000000000000000000000000000000000000000000 ya dont pay the ppl working for ya 5 bucks an hr,,, hahahahahah not going to happen mc dodles wally mart let us the mid class pay and they will make a mill.. if i up the i would screw me to so what do we do
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