1
   

US executive bonuses set to match boom levels

 
 
Reply Mon 22 Mar, 2004 12:34 am
Corporation Boards and their CEOs seem not to have learned their lesson about the amorality of their greed in a jobless "boom." Such arrogance! ---BBB

US executive bonuses set to match boom levels
By Dan Roberts in New York
Published: March 21 2004 19:01 | Last Updated: March 21 2004 19:01

Bonuses payments for senior US executives are on track to match levels reached during the last boom, according to early analysis of 2003 figures, as rising awards in cash and shares make up for falling stock options.

The return of generous compensation packages, triggered partly by last year's recovery in company profits, is likely to reopen the debate about whether management incentives are properly aligned in big companies.

Critics ranging from governance watchdogs to billionaire investor Warren Buffett have argued that pay remains the "acid test" for wider boardroom reforms. They fear little progress has been made. Preliminary analysis by compensation consultants suggests that the criticism of excessive gains from stock options issued during the late 1990s has resulted in companies granting fewer new options in 2003. Instead, the studies of disclosures made mid-way through the reporting season show companies taking more advantage of straightforward cash bonuses or granting shares with restrictions on their use.

Pearl Meyer, a compensation consultant studying 50 of the 200 largest companies to have reported up to the beginning of March, said total cash compensation rose 17 per cent over 2002 levels while the value of stock options fell by a third. "Bonuses are back to the record levels in 2000 and 1999, but options are the lowest we have seen them since 1997," she said.

Paul Hodgson, an independent expert at The Corporate Library, said companies were swapping one form of pay for another. "I have been a little astonished at how little change there has been," he said. "There seems no moderation whatsoever."

But Mercer, which advises companies on executive pay strategies, said its early analysis of a slightly wider set of com- panies found surprising restraint given how far profits and share prices rose last year. Steve Harris, a partner at Mercer, said: "Bonuses have actually not been as strong as we would expect given the strong performance of many companies last year."

Mercer's preliminary look at 100 of the 350 largest companies found salary and bonuses rose 7.5 per cent compared with the previous year, but a decline in the expected value of long-term incentives of 16 per cent. Mr Harris said companies were deterred from issuing stock options because most expect to be forced to include such awards as an operating expense in future.

Some of the largest packages in 2003 were seen on Wall Street, led by Sandy Weill at Citigroup with $44.6m. Last year's bank deals still pale in comparison to those paid out at the top of the bull market in 2000 when Mr Weill received $127.8m and Sandy Warner, then chairman of JP Morgan Chase, was paid $60.1m.

But critics said continued large awards outside Wall Street were more surprising. "We all said it would change last year and it is still not happening," said Mr Hodgson. "Of course it's going to be slow and incremental but you should be able to see some change by now."
  • Topic Stats
  • Top Replies
  • Link to this Topic
Type: Discussion • Score: 1 • Views: 2,659 • Replies: 28
No top replies

 
Wilso
 
  1  
Reply Mon 22 Mar, 2004 02:49 am
The money these people earn is nothing short of obscene. It's very simple. NOBODY is worth $60mil in one payment. There is noone on earth who is THAT good.
0 Replies
 
caprice
 
  1  
Reply Mon 22 Mar, 2004 03:13 am
I agree wholeheartedly with Wilso.

And just who is really footing these outrageous bonuses? We the consumer.

I'm in financial straits right now, but when things are going a little more smoothly I plan to continue spending pretty much as I do now, which is not much at all. I wish I could convince everyone to do the same to screw these execs out of their undeserved bonuses. But then again, that isn't likely to happen is it?

I'm also taking all the savings I do have (retirement savings plans and the like) to smaller financial institutions -- credit unions to be exact. I am so fed up with the big banks taking more and more and offering nothing in return. My Dad did the same thing. The bank he was with practically fell all over themselves trying to get his business back. Maybe they shoulda thought of that when he was still their customer?

Ugh. It is just disgusting to the nth degree!
0 Replies
 
Jim
 
  1  
Reply Mon 22 Mar, 2004 03:28 am
Maybe the guy (or gal) who finally cures cancer deserves this kind of money, but not these people.

I am disgusted at these salaries, whether "earned" by corporate big shots, movie stars or sports stars.
0 Replies
 
Jer
 
  1  
Reply Mon 22 Mar, 2004 03:36 am
Wow, you sure could give a bonus back to the employees with that kind of money!
0 Replies
 
Wilso
 
  1  
Reply Mon 22 Mar, 2004 03:44 am
Jer wrote:
Wow, you sure could give a bonus back to the employees with that kind of money!


Especially considering they're the one's who do the work which actually generates the profits in the first place.
0 Replies
 
caprice
 
  1  
Reply Mon 22 Mar, 2004 03:47 am
Exactly! Wilso hits the nail on the head again!!

Jim: I'm in complete agreement with ya there buddy. Entertainers (and I include movie "stars" and athletes in this category) get waaaay too freakin' much money for what they do. They should be happy getting even a fraction of what they earn!
0 Replies
 
Wilso
 
  1  
Reply Mon 22 Mar, 2004 04:25 am
caprice wrote:
Exactly! Wilso hits the nail on the head again!!

Jim: I'm in complete agreement with ya there buddy. Entertainers (and I include movie "stars" and athletes in this category) get waaaay too freakin' much money for what they do. They should be happy getting even a fraction of what they earn!


That's one of the reasons I refuse to watch the plethora of awards shows. They're nothing but a parade of self indulgence for people who are already too indulged in the first place.

And those people who line up outside the barriers just to get a glimpse of the "stars"? LOSERS!
0 Replies
 
the prince
 
  1  
Reply Mon 22 Mar, 2004 04:30 am
I have some opinions abt this - will be back ....
0 Replies
 
Jer
 
  1  
Reply Mon 22 Mar, 2004 04:30 am
Gautam,

I do to...looking forward to hearing yours Smile
0 Replies
 
the prince
 
  1  
Reply Mon 22 Mar, 2004 06:52 am
While the amounts look ridiculously large in the absolute sense, you have to take them in the overall context.

Take the Citigroup's chairman's compensation for 2003. $43million is large, no doubt. But also consider that fact that Citigroup made almost $18 BILLION in income during 2003 !!! Considering this, the amount which was paid to its chief executive was miniscule by comparison !!!

Large corporations rely heavily on their senior management to bring in business. No one wants to give a large chunk of business to people whom they don't trust, no matter how good their service is. And that is where these people add value. While to us at the lower rungs of the corporate ladder it does seem that they don't do much - let's not kid ourselves to the extent of their contribution in running the company the size/complexity of Citigroup/major international banks. Afterall, a business is as good as the man who is running it !

Even the movie stars - look at the overall earnings which a movie makes by having a "sellable" star in it - I don't see any problems in they demanding a part of the money as compensation, simply because their presence in the movie ensures that it will have a good run at the box office and fill the coffers of the studio producing the movie (well, in most cases)

What is immoral is paying large bonuses to executives of the companies which are failing, losing money, laying off employees - that does get my goat !
0 Replies
 
caprice
 
  1  
Reply Mon 22 Mar, 2004 08:04 am
Oh please. If it was only one person was responsible for the success, I could agree with you, but it isn't just one person. Everyone in the company contributes, no matter how small, to the overall success. They could filter those profits down to everyone in the company and offer their customers a break. The fact that banks are making record profits makes me sick. In the economy we have had over the last several years and the immediate future, who is it that is paying for this profit? You and me!

Same goes for movies. I absolutely refuse to go see a first run movie. I'm not about to pay $13 for a movie. Why should I pay my hard earned money towards a pampered star or some producer or studio exec who already gets paid beyond what they are worth? The price of movies has skyrocketed over the last several years and why? Because they pay their "talent" way too much money. Do you think the crew on these films have been compensated in kind the way actors have been? I really doubt it. It's the same for "star" athelets on sports teams. It isn't about a fan getting to see the game anymore because I doubt the ordinary fan can afford the best seat in the house or even close to it. I think "stars" of any type are greedy. Do the studios and sports tycoons deserve all the extra profit? Hell no. They could keep reasonable profits and allow fans to actually afford to go to movies and/or see their favourite teams play.

The end motivator in all of this is greed.
0 Replies
 
Brand X
 
  1  
Reply Mon 22 Mar, 2004 08:33 am
I believe a person should be able to make all they can make, legally.

What gets me is Wal Mart makes more money than ExxonMobil!
0 Replies
 
BumbleBeeBoogie
 
  1  
Reply Mon 22 Mar, 2004 09:39 am
BBB
When you have corporations making such huge profits, what does it tell you? Obviously, they are over charging for their services and products beyond reasonable profits. With enough surplus profit to afford those huge CEO bonuses and salaries, they could reinvest in their companies to improve their services and products---and the US economy. Do they do that?

Noooo! Instead, they demonstrate greed! GREED! GREED!


BBB
0 Replies
 
Brand X
 
  1  
Reply Mon 22 Mar, 2004 09:44 am
Greed is definitley present, but still alot of that money ends up back into the economy, I mean Tom Daschle even drives a Maybach. So our representatives are profiting very well too.
0 Replies
 
BumbleBeeBoogie
 
  1  
Reply Mon 22 Mar, 2004 09:50 am
Brand X
Brand X, give me a break. You are actually trying to compare CEO "salaries" to those earned in public service?

U.S. Senator Tom Daschle (D): Spouse Linda; U.S. Representative 1979-87, U.S. Senate 1987-present; term expires January 3, 2005; Current Salary $171,900 (Additional salary for Minority Leader).

BBB
0 Replies
 
Brand X
 
  1  
Reply Mon 22 Mar, 2004 09:55 am
No, I'm comparing what they take under the table, what they make has nothing to do with their salary.
0 Replies
 
Linkat
 
  1  
Reply Mon 22 Mar, 2004 01:46 pm
Henry Ford was a very smart man. He made his own market of customers by paying eligible workers a minimum wage of $5 a day (compared to an average of $2.34 for the industry) and reducing the work day from nine hours to eight.

The development of mass-production techniques, which enabled the company eventually to turn out a Model T every 24 seconds; the frequent reductions in the price of the car made possible by economies of scale; and the payment of a living wage that raised workers above subsistence and made them potential customers for, among other things, automobiles--these innovations changed the very structure of society.
0 Replies
 
dyslexia
 
  1  
Reply Mon 22 Mar, 2004 01:58 pm
He (Ford) also bankrupted many of his dealers by force shipment with demand for payment when sales lagged. What was good for Ford was not necessarily good for his dealers or their employees.
0 Replies
 
Wilso
 
  1  
Reply Mon 22 Mar, 2004 02:01 pm
caprice wrote:
Oh please. If it was only one person was responsible for the success, I could agree with you, but it isn't just one person. Everyone in the company contributes, no matter how small, to the overall success. They could filter those profits down to everyone in the company and offer their customers a break. The fact that banks are making record profits makes me sick. In the economy we have had over the last several years and the immediate future, who is it that is paying for this profit? You and me!

Same goes for movies. I absolutely refuse to go see a first run movie. I'm not about to pay $13 for a movie. Why should I pay my hard earned money towards a pampered star or some producer or studio exec who already gets paid beyond what they are worth? The price of movies has skyrocketed over the last several years and why? Because they pay their "talent" way too much money. Do you think the crew on these films have been compensated in kind the way actors have been? I really doubt it. It's the same for "star" athelets on sports teams. It isn't about a fan getting to see the game anymore because I doubt the ordinary fan can afford the best seat in the house or even close to it. I think "stars" of any type are greedy. Do the studios and sports tycoons deserve all the extra profit? Hell no. They could keep reasonable profits and allow fans to actually afford to go to movies and/or see their favourite teams play.

The end motivator in all of this is greed.


I'm with you totally caprice. If these people were that f@cking good, then why would the rest of us have to work? NO SINGLE PERSON IS THAT GOOD.
0 Replies
 
 

Related Topics

Where is the US economy headed? - Discussion by au1929
Shopping Around For Loans - Question by Brandon9000
What is greed? - Discussion by Robert Gentel
bonds series h - Question by allen russell
Naked Short Selling - Question by optimus cubed
HOW TO GET WEALTHY - Discussion by farmerman
 
  1. Forums
  2. » US executive bonuses set to match boom levels
Copyright © 2024 MadLab, LLC :: Terms of Service :: Privacy Policy :: Page generated in 0.03 seconds on 11/05/2024 at 07:25:33