Thursday, June 16, 2005

blinders on pay

The New York Times today ran an op-ed piece that made me just shake my head. Norman R. Augustine, retired chairman and CEO of Lockheed Martin, writes to complain about how Congress, "in its wisdom", limits how much of a CEO's pay may be written off as a business expense to $1 million annually -- and even less for some companies that do business with Uncle Sam. And old Norm isn't happy.

So Norm comes up with another proposal: increasing tax revenues by jacking up taxes on the income of "superstar athletes, rock stars, movie directors and a few others". Going for cheap nods of support, Norm suggests that Jason Giambi, Barry Bonds, Latrell Sprewell, Howard Stern, Kobe Bryant, and Randy Moss could all spare a few bucks -- it would be "rough justice."

Norm's missing the point on several levels. There is no cap on how much CEOs can be paid, just a limit on how much of this salary can be applied to reducing corporate income taxes. This was NOT done to raise revenues, but rather was to protect the SHAREHOLDERS of corporations. After all, who do you think pays when somebody like "Kenny Boy" Lay or Bernie Ebbers pulls in well over $100 million a year? Companies can still grossly overpay CEOs if they want, but at least the taxpayer won't have to subsidize it. If somebody is really worth more than $1 million a year to a corporation, they'll find it worthwhile to pay that even without the inducement of a tax write-off.

It's absurd to compare the income for a pro athlete, musician, actor, or director to a CEO. Do baseball players get to pack a board of directors full of their cronies, who will then directly or indirectly approve the compensation for them? Nope.

Nobody is holding a gun to the head of the owner of pro sports teams, Hollywood studios, or record labels when they decide to shell out major bucks on Tim Duncan, Steven Spielberg, or Britney Spears. They are making a calculated business decision that paying these talents will pay off in profits and/or championships. And whether through on-base percentage, box office take, or CD sales, it is possible to quantify the return you get on these people and compare it to their peers in other organizations in determining whether to offer them a raise when their contract is up. Unlike CEOs, who will take multi-million dollar bonuses as a reward for a 5-year, 15% hike in the company's share price when the overall market was up 25% over the same period.

There have been studies that undercut the idea that there are only a very few people capable of being great CEOs. Pay for CEOs and other senior executives has been grossly inflated by the practice of not having to expense stock options, absurd perks like luxury apartments at a fraction of market rents, unfettered access to corporate jets, etc. Trust me, there are plenty of bright business types out there chomping at the bit to run an organization who will do it gladly for well under $100 million a year.

If the player/director/actor/singer asks too much or delivers too little, they won't get a contract. It's quite simple. Not like the farcical charade of having a group of your friends sitting around saying "how much should we pay old Norm? How about $50 million, and while were at it, bonuses all around!"

Norm, quit your moaning and enjoy your retirment. I'm sure your pension is one most of us working stiffs could only dream of.

6 Comments:

Blogger be said...

華麗夢想,
夢世界,
酒店經紀,
酒店工作,
酒店上班,
酒店打工,
禮服酒店,
禮服公關,
酒店領檯,
華麗夢想,
夢世界,
酒店經紀,
酒店工作,
酒店上班,
酒店打工,
禮服酒店,
禮服公關,
酒店領檯,
華麗夢想,
夢世界,
酒店經紀,
酒店工作,
酒店上班,
酒店打工,
禮服酒店,
禮服公關,
酒店領檯,
華麗夢想,
夢世界,
酒店經紀,
酒店工作,
酒店上班,
酒店打工,
禮服酒店,
禮服公關,
酒店領檯,
華麗夢想,
夢世界,

9:37 AM  
Blogger oakleyses said...

replica watches, ugg boots, michael kors outlet, nike outlet, polo outlet, christian louboutin outlet, louis vuitton, christian louboutin shoes, oakley sunglasses, michael kors outlet online, nike air max, michael kors outlet online, tiffany and co, gucci handbags, jordan shoes, louis vuitton, nike air max, ray ban sunglasses, longchamp outlet, ugg boots, ray ban sunglasses, christian louboutin uk, uggs outlet, oakley sunglasses wholesale, uggs outlet, michael kors outlet, oakley sunglasses, cheap oakley sunglasses, polo ralph lauren outlet online, longchamp outlet, replica watches, nike free, longchamp outlet, michael kors outlet online, uggs on sale, michael kors outlet online, prada handbags, louis vuitton outlet, ray ban sunglasses, burberry outlet, chanel handbags, christian louboutin, tiffany jewelry, louis vuitton outlet, tory burch outlet, prada outlet, kate spade outlet

11:49 PM  
Blogger oakleyses said...

true religion outlet, hollister uk, nike roshe, coach outlet store online, oakley pas cher, polo lacoste, nike free run, true religion jeans, mulberry uk, ray ban pas cher, burberry pas cher, michael kors, ralph lauren uk, air max, hollister pas cher, north face, polo ralph lauren, michael kors, hogan outlet, nike blazer pas cher, coach purses, converse pas cher, nike air max uk, nike air max uk, longchamp pas cher, nike free uk, abercrombie and fitch uk, true religion outlet, nike air max, kate spade, ray ban uk, new balance, north face uk, lululemon canada, guess pas cher, vans pas cher, sac longchamp pas cher, michael kors pas cher, michael kors outlet, jordan pas cher, true religion outlet, sac vanessa bruno, sac hermes, nike air force, timberland pas cher, coach outlet, nike tn, louboutin pas cher, replica handbags, nike roshe run uk

11:50 PM  
Blogger oakleyses said...

longchamp uk, wedding dresses, ghd hair, bottega veneta, nike trainers uk, timberland boots, chi flat iron, ralph lauren, vans outlet, lululemon, mcm handbags, nike roshe run, mont blanc pens, nfl jerseys, north face outlet, p90x workout, iphone 5s cases, giuseppe zanotti outlet, nike air max, insanity workout, louboutin, reebok outlet, hollister clothing, asics running shoes, instyler, jimmy choo outlet, mac cosmetics, valentino shoes, iphone cases, s6 case, hollister, abercrombie and fitch, beats by dre, iphone 6 plus cases, iphone 6s plus cases, ipad cases, iphone 6 cases, oakley, soccer shoes, ferragamo shoes, soccer jerseys, nike huaraches, north face outlet, babyliss, celine handbags, hermes belt, baseball bats, herve leger, iphone 6s cases, new balance shoes

11:52 PM  
Blogger oakleyses said...

ugg,ugg australia,ugg italia, moncler, pandora charms, toms shoes, gucci, montre pas cher, ugg pas cher, ugg uk, moncler uk, swarovski crystal, moncler, swarovski, canada goose outlet, nike air max, hollister, ugg,uggs,uggs canada, louis vuitton, vans, coach outlet, louis vuitton, hollister, canada goose outlet, moncler, ugg, ray ban, juicy couture outlet, wedding dresses, supra shoes, doudoune moncler, converse outlet, moncler outlet, converse, louis vuitton, pandora jewelry, moncler, canada goose outlet, marc jacobs, links of london, moncler outlet, louis vuitton, barbour uk, karen millen uk, canada goose, replica watches, canada goose, canada goose uk, pandora jewelry, louis vuitton, juicy couture outlet, pandora uk, barbour, canada goose, thomas sabo

11:54 PM  
Blogger xjd7410@gmail.com said...

louis vuitton outlet
retro 11
air max
true religion jeans
longchamp le pliage
toms outlet
discount jordans
polo ralph kids
supra shoes
coach outlet
louis vuitton bags
beats by dr dre
michael kors outlet clearance
nike uk
oakley sunglasses
basketball shoes
coach factory outlet
toms outlet
lebron 13
louis vuitton outlet
nike air max 90
louis vuitton
coach outlet
coach factory outlet
coach outlet store online clearances
timberland outlet
louis vuitton purses
juicy couture
coach outlet
beats solo
chenyingying0705

3:18 AM  

Post a Comment

<< Home