Higher Pay for CEOs = Smaller Dividends for Stockholders
Maybe this report will get a rise out of people who think Income Inequality is just a liberal buzzword. When millions of stockholders find out that they themselves are being shortchanged by the inverse relationship between CEO pay and company performance, maybe something will get done. (Forgive me for dreaming.)
Here's another link.
The companies with the highest CEO pay are suffering an average shareholder loss of $1.4 billion a year. This information comes from a study conducted at the University of Utah’s David Eccles School of Business. The economists reached this conclusion after studying executive compensation and corporate performance data over a seventeen-year period.
Over the past twenty years, roughly one third of the highest-paid CEOs have been bailed out by taxpayers and/or fired by their boards of directors and/or arrested for fraud.
On top of that, executive compensation is tax deductible. YOU are contributing your tax dollars to these CEOs' 7-figure salaries and bonuses. About $5 billion a year are being contributed by taxpayers to help finance these executives' compensation packages.
Let's hope this information will make its way to the millions of stockholders and investors who need to know this.
Labels: CEO pay company performance
posted by Tom Harper @ 4:55 PM
8 Comments:
But Tom, they are job creators.
Jerry: That's right, I forgot. Plus, when they "earn" billions of dollars, some of that money will trickle down onto the rest of us and stimulate the economy.
We have an ongoing example of how great that trickle down stuff works. The top people are doing great. It has never been better for them.
And look at our economy! That trickle down stuff has just got the economy....barely moving. Hmmmmmmm. Something is wrong.
I had always thought this was all an outgrowth of the 60's, when the radical left would buy stock and then demand the company divest in the Vietnam war (for example). But then I’ve also noticed over the decades, articles in magazines like Ramparts (remember them?), Mother Jones, Playboy etc., talking about laws and proposals sneaking through Congress giving Stockholders less say in matters through various means. I figured it would never fly because these investors are people with money and nobody screws them over.
Well seems I was wrong and that’s why CEO salaries are out of hand.
Erik
Erik: I remember Ramparts, way back when. I think that's true, they've been quietly trying to give stockholders less of a say in company matters. But if thousands of stockholders sell their stocks and buy stock only in companies that don't overpay their top executives, that might get somebody's attention.
I think most stockholders are more interested in stock growth and dividends that the top executives' salaries...unfortunately.
Jerry: I assume that if a company's performance is suffering from overpaying their top executives, stockholders would dump the stock and buy stock in companies that don't overpay their CEOs. They'd be doing this for their own economic interests, not out of morals or principles. That's my take anyway; I don't claim to know a lot about the stock market or how it works.
That's probably true only if executive pay
Is a significant percentage of profits. Often it is not, particularly in large corporations.
Post a Comment
<< Home