Breakaway Wealth. The most important article you will read today.

[edhopper]

From Barry Ritholtz;

http://www.ritholtz.com/blog/2011/09/wp-report-on-breakaway-wealth/

There is a huge Washington Post special report on Breakaway Wealth in the US. More than most other industrialized nations, the US has seen the top 0.1% compensated in vastly disproportionate numbers versus the rest of the populace.

There are at least several reasons to be concerned about this, beyond basic fairness: 1) Nations that have extremes wealth disparities tend towards social unrest. Usually, its banana republics and dictatorships, but it could happen in a corporate-owned quasi democracy as well. 2) CEOs and other company insiders have been engaging in a massive grab of shareholders wealth for decades. Its gotten appreciably worse in the 2000s. 3) Management is now trying to hide their compensation from the business owners — the firm’s shareholders

Making matters even more outrageous, these CEOs are trying to pass legislation that would legally allow them to not to disclose executive compensation at public companies:


Link to the WP series:

http://www.washingtonpost.com/breakawaywealth

[Frustratedlady]

1. Golly gee, is management ashamed of their gross raises/perks? Who'da thunk it?

Since an uprising by the people probably won't matter, it's time for the shareholders to voice their objections. I suppose most of them are in the same boat as those trying to hide their wealth, but no one is worth the kind of money that is being paid to CEOs and upper management, and every dollar paid to them is one out of someone else's pocket.

Somebody better start taking to the streets in protest. I'm too old to march far, but I could sure stand in protest.

[edhopper]

3. The problem is

"shareholders" are not the proverbial widows and orphans,but giant hedge funds and institutions that who's heads gain just as much as the wealth moves upward.

[Tuesday Afternoon]

2. k&r

[CoffeeCat]

4. I don't mind exorbitant executive/CEO salaries...

I can wrap my brain around CEOs compensating themselves 50 million+ for their salaries. What I can't
wrap my brain around is how they pay themselves so handsomely--while paying their workers very low wages
while cutting their benefits.

That's what gets me. Fine, you think you need $100 million dollar a year in compensation? Go at it, big boy.
But why do you have to cause so much suffering with your workers?

I really don't know how these people sleep at night--knowing that hundreds and thousands of workers can't sleep
because they're so worried about their budget, or getting a pay cut, or being laid off.

Seriously. You have to be a psychopath, for this to be ok in your own head.

[edhopper]

5. You should understand

that they cannot pay themselves tens of millions without paying their workers nothing with no benefits. Their salary has to come from somewhere, and its from the mouths of the workers.

[GeorgeGist]

8. The fact that people like you don't mind ...

is part of the problem! Share the Greed. Ain't gonna happen.

[Curmudgeoness]

9. I remember in the 1980's when I was studying Deming's

theories of management, he advocated basing CEO salary on a percent of the lowest paid employees in a company. In Japan, where he put his theories to work to rebuild after WWII, the CEO could not make more than 7 times as much as the lowest paid employee. The only way to get a raise for himself would be to give raises to the employees under him.

I was willing to give a higher amount, maybe 10 times as much as the lowest paid employees. But the statistics here in the US are so far beyond these.

Consider this: the average American CEO earned 319 times the salary of the average U.S. worker in 2008. As hard as it is to believe, this pay ratio has dropped over the past decade -- in 2000, the average CEO earned 525 times the average worker's salary.
Until executive pay falls in line with historical levels (in 1980, the ratio sat at a reasonable 42 times)

[Selatius]

15. In US law, a conflict of interest is allowed in terms of CEOs and chairmen of the board.

If you are a CEO and also chairmen of the board, you are allowed to name or suggest names to the compensation committee that determines pay and wages at the company. This is how you can pay yourself.

Also, even if you are just CEO and not chairmen of the board, typically you are friends with people on the board of directors and hang out with them outside of work. This is a rather typical situation, and it's fairly common for a person who sits on the board of directors to sit on the boards of several other companies (provided they don't directly sit on the board of a rival competitor in the same market, that's illegal). If they are your friends, they are more open to your suggestions as far as people being appointed to the compensation committee. This is another way to pay yourself.

[TBF]

Important information - K&R nt

[ThomWV]

6. Solution: Tax those mother-fuckers out of existence.

[edhopper]

7. What!

Tax the "Job Creators"? How socialist of you.

[L0oniX]

11. Cease their assets and money ...give it to the elderly and poor and the hungry.

[moondust]

10. Oinkers.

Offshore those CEO jobs and save billions for the company and shareholders! :woohoo:

(No doubt the CEOs thought of that a long time ago and made sure it can never happen.)

[MichiganVote]

12. K&R

[Scuba]

13. Interesting survey question on the WaPo page...

"Business executives make up the largest slice of top earners in the U.S., more than 40%, according to a new study. Should their pay increases be capped at the level of increases awarded to their firms' workers?"




Slanted question. I would counter that it isn't the rich who are getting too much, it's the poor who are getting too little. Limiting increases on WalMart CEO pay does exactly nothing to help WalMart workers.

[edhopper]

16. does nothing?

Where do you think the extra money for executive pay come from. How do you think the CEOs went from 50 times the low wage workers income to 500 times? Why do you think low wage workers income has been stagnant for 3 decades while executives have soared?
The pay at the top has come from the pockets for the workers at the bottom.

[Scuba]

18. You limit CEO pay and the stockholders earn more. Doesn't help the employees. n/t

[edhopper]

19. That's what Union's were for

all part of the breaking of the middle class.

But yes, i absolutely think that the last 30 years have seen the increase pay that should have gone to the workers, go to the top execs.

[WDIM]

22. The wealth comes from the workers!

To them it should return!
If they won't give it to you take it back!

[SpiralHawk]

14. "Smirk." - Republicon FatCats

[Blue_Tires]

17. I liked the piece on the bootstrappin' free-marketers

whose wealth is derived from padding federal contracts...

[WDIM]

20. There needs to be fairness in the pay scale!

Only the people can demand it!
Save the middle class pay us a middle class salary!
No full time worker is be in poverty!!!

[Uncle Joe]

21. Kicked but too late to formally recommend.

Thanks for the thread, edhopper.