Expose on Insider Loans 380
Ctimes2 writes "Everyone's been grousing a lot lately about high priced CEO's and compensation packages, in no small part due to the 'Enron incident'. Business2.0 has a lengthy but enjoyable feature about how corporate loans became 'compensation packages', forgivable, sometimes tax free the and norm for corporations. And Slashdot's favorite whipping boy Microsoft, while not leading the pack, certainly isn't the poster child for trustworthy finance. More importantly (or rather, to our eternal annoyance), the article provides some much needed information trolls can add to their 'CEO's are bad!' rants: "Insider lending added thrust to the long surge in executive pay that has pushed the average major-company CEO's compensation from 45 times that of the average worker in the early 1970s to about 500 times worker pay today.""
Too Bad- (Score:2, Insightful)
Come to think of it, glancing down that list of companies.... MS seems to be the only one making ANY money.
Sorry, ya'll, but it seems that 'appropriate' MS bashing will indeed get you an article on SlashDot.
And really, this isn't a troll, this is disgust at having actually read thru what I thought was going to be an interesting read.
This has nothing to do with making money... (Score:5, Informative)
...and everything to do with unethical business practices.
Scan through that list on the first page of the article. You'll notice names like Enron, Dynegy, Tyco, WorldCom, and Adelphia. Executives are getting these loans, securing them with stock options, and when the options tank the companies have no choice but to write them off. Instead of profits going towards incrasing the skillset of their workforce, or dividends, or any other number causes that would actually benefit the company as a whole, this money is just being written off.
And these aren't small sums, either. We're talking about billions of dollars.
I wonder if you even read the article. If anything, it was somewhat favorable to Microsoft. They have had some executives who are no longer with the company but, through these insider loans, have been able to walk away with millions of dollars.
Re:This has nothing to do with making money... (Score:5, Insightful)
And consider your own words. Just as the "it's bad because it's rich" dogma has a lot of issues, so too does the "it's good because it's rich", which you've gone at least as far in emphasizing.
On top of that, it seems that you guys skipped economics in college and can't tell that those rich people do far more for the opportunities available to poor people than any government program ever has
Sort of an apples-to-oranges comparison, but I don't necessarily buy into it anyway.
Unless you were an investor in or employee of Enron, Worldcom etc, you have no right to complain because their fraud has not affected you.
You make this bold statement a few sentences after telling the original poster that he skipped economics? The ripple effects of an organization as large as either of the above two going under is *enormous*, affecting almost everyone.
Heck, with Worldcom *alone* and ignoring indirect effects, a hell of a lot of my packets get routed through UUNET.
There have been major changes to law, a lot of "earnings revisions" from companies that have been claiming bullshit (which drives down the market more). There have been companies going out of business that are vendors to the companies in trouble.
Again: pure socialist systems tend to have issues. That doesn't mean that pure capitalist (i.e. without government regulation) systems are useful. For example, in the real world you can end up with monopolies...
It's hard to say why someone "deserves" money, so I'm not going to make claims in that area. I, personally, think that companies that give their top officers that much money are *stupid*, though. Does a CEO *really* have skills that are 1000 times harder to obtain than an engineer, justifying a 1000x pay ratio to the engineer? (Okay, maybe a bit less, since we can factor in a lack of job security.)
Re:Too Bad-it's about the stock (Score:5, Insightful)
The problem that has been developing, and has been more or less identified as a problem for the past 3 to 5 years, is that a publicly traded company no longer manufactures and sells products, but manufactures press releases and sells stock. The important capital equipment is no longer machines, but, as has been shown by Nike and most other multi-national corporations, savvy marketing departments.
This means that if your product is stock, then as long as the stock remains relatively stable with respect to the overall market your product is doing well. To help keep you primary product, your stock, stable it is useful to have stable sales of some sort of ancillary product that your marketing department can then use to promote your primary product, stock. Most dot coms had wonderful marketing but no real sales, so, eventually, the stock became worthless or was never bought at all. Enron had sales, but when investigated, proved to be fraudulent, which wasn't a problem in itself, but nobody wants to deal with a dishonest agent. M$ has sales, cash reserves, and an excellent marketing department, so it makes lots of money. This does, not, however mean that it is fundamentally different from Enron or a dot com.
The thing to remember is that Enron set up a complex financial structure based on it's stock. True, there were many people robbing the company of millions of dollars, and there was gross accounting fraud, but the thing that brought the company down was the stock. If the stock price had not fallen and triggered certain payment which then waterfalled into audits and investigations, it may have been years before we would have known how corrupt the organization, and on reflection, the industry was.
And the same is true of M$. Stock is a profit center. M$ pays in stock options instead of cash, thus saving not only the cash but also fabricating a profit by not reporting the cost of disbursing the stock option. Also, M$ saves a lot of money in taxes by deducting the stock options from it's revenue. M$ strikes deals with traders and directs M$ employees to use those brokers to trade options. The brokers make a lot of money not only on the trades but also on the loans. There was an article a year or two ago detailing the complex stock transactions, and questioned whether M$ would be profitable without using stock as a profit center. As long the stock remains high, we expect M$ to be a successful company.
So no, the fact that M$ is making money means very little. If it is padding it books with past and future profits to meet analyst expectations, if it is using stock as a profit center, if is neglecting it's customers to meet short term investor expectation, then it has all the same problems as any other doomed company, and, if it cannot handle the web of deceit, will fall.
Re:Too Bad- (Score:2, Troll)
If every last one of those companies listed are doing the insider loans as a part of corporate bloat and corruption that is causing them to lose money, and Microsoft is doing insider loans, suffers corporate bloat and corruption... but hey, Microsoft, they make money!...
Do you really think they are so different from the other companies on the list?
jump (Score:3, Insightful)
Seriously, though, CEO compensation has historically been so high that increases are its far beyond the range of complaining. The difference between a CEO pulling in 100 million versus 500 million might be noticable to the CEO, but in relation to the average worker's salary, anything that high just gets muddied. It's like having a conversation with Einstein and all of a sudden he gets 2x smarter. Would you be able to tell?
Re:jump (Score:3, Funny)
If instead of of paying 1 CEO 500 million, you pay 5 CEOs 100 million each, they'll be too busy watching each other to screw up the company as much
Seriously, what exactly does the CEO do anyway that makes him worth so much? Why are these companies so interested in hiring and retaining certain CEOs?
Re:jump (Score:2)
siri
Re:jump (Score:5, Interesting)
I'll bite.
I'm one. Of a considerably smaller ship, but one nontheless (I provide broadband to about eight counties in a "fly over country" state and run a regional network for voice, IP and private line).
I created my company. Worked my ass off for several years living in a crappy part of town in a small house. Leveraged everything. Risked everything. Signed on the line for every loan, pledged my house, farm and income for years to come to make it happen. Worked for 12 months with no fscking paycheck (actually, you get to pay to play in this club... attorneys, accountants, routers, systems, offices all cost bucks. Guess where it comes from?)
While my geek friends were sneaking out at 4:30 on Friday to go drink and hit the hockey games, I was working till midnight and both weekend days. Vacation? 1998 was the last time I saw free time. Fund the company? Build routers? Climb towers? Carry out the trash? Whatever it took.
Meanwhile, my competition (incumbant/monopoly phone companies in small towns) was run by Junior (second or third generation or more of family-run operations). While Junior made a cushy income, drove his flashy car, golfed at the country club and enjoyed that nice $5 million company home in Vail, I froze my ass off on grain elevators and windmills at 4AM, making small town customers happy.
So now I'm taking Junior's business. Bringing broadband to his town. Making the people happy. Junior's been horrified, learning that my annoying, trivial little company is now taking his core business. He's yesterday. Obsolete. To Junior, I'm a barbarian, but to the community I'm a saint. Even Junior's senator hangs around my office for photo ops.
So why shouldn't I be paid for what I did? You want progress? Don't expect it from Junior. If you want it from me, it comes on my terms. If I get greedy (like the dot-com assholes who lost were in it only for the $10 million homes - learn about these losers and you'll see they're nothing but upper class daddy's boys anyways. They didn't earn it), then I'll join Junior and let some efficient young fsck replace me.
So, do you really want to eliminate my incentive? Sure hope you like Junior...
*scoove*
Re:jump (Score:5, Interesting)
What I meant was, these companies that hire someone to come in and run the place - not create it, not stay up til 3 in the morning to keep it running, just make the decisions and collect stock options, like Junior - what do they do?
I'd be happy to hear that they're worth every penny of the money; I'm honestly curious.
BTW, somebody mod the parent +1 interesting..
Re:jump (Score:2)
Yes, they earn it. At least every one of the dozen or so CEOs I've known personally, or known people who knew personally do. Including Bill Gates.
Wether you're an entrepreneur or Mr. Gates, you work hard. I'm sure Gates doesn't work as hard now that he's not CEO, but it is not a 9-5 job.
Maybe there are some companies where the guy works 9-5 and takes every weekend off- but those are not going to be companies that are growing, or they are situations where the guy put in years and years of hard work to get the place running well enough that he could work normal hours.
Certainly some guy who inherits a company may inherit one that the prior guy built into a well running ship and he can get away with slacking off for a couple years before it falls apart. But he'll either have to start working hard, or he'll be an ex-CEO. At the minimum, its a 60 hour week for any company... and the guys who play golf on wednesdays (except doctors) are actually probably putting 60 hours in cause they work weekends and really are actually doing business during those trips and lunches.
Re:jump (Score:3, Insightful)
You can not honestly tell me they where worth 10 times the value of the sr. engineer that handles design, or the sales guy that busted his ass 60+ hours a week so the company had some income.
If someone is CEO of a company they started, yeah, they bust ass, but Junior is far more common.
that said, your the type of CEO I'd love to work for, one that bust his ass for the long term.
Based on your discription, I hope you make a killing.
I'll give you an example... (Score:4, Insightful)
Joined IBM as CEO in 1993 and left in March 02. When he joined, the common perception was that IBM was a dinosaur overdue for extinction. Sure it had world class engineers and a huge patent portfolio and masses of installed fortune 500 customers, but mainframes were on the way out. The bottom line was that IBM weren't making products that people wanted to buy at the right price, and it was costing a lot to make them.
now fast forward to 2002. IBM is profitable and leading the way once more. Gerstner essentially turned the company around, and in doing so generated billions of dollars for his shareholders. So despite the fact that I can't justify the need to earn tens or hundreds of millions of dollars each year, from the shareholder perspective he was worth every cent.
Re:jump (Score:3, Insightful)
Very good point... they're worse in my book than Junior - people born on third base thinking they hit a triple, as the saying goes.
I've got a few VC friends (not that I'd ever touch VC money; I don't like the strings attached to it) and talk about this issue frequently. It's sort of the South Park Underwear Gnomes Business Plan (TM) (you know, 1. Steal Underwear, 2. ???, 3. Make Big Profit)
The VC equiv is 1. Insert $100 million, 2. Hire Harvard MBA's, 3. Make Big Profit.
The $100 million allows them to pretend this is a predictable $100 million stable company, theoretically a good match for Harvard MBA's. Get guys used to running a big ship to make this venture one, right?
Except they're never able to get their hands dirty, have never understood creating things, and have to hire slews of consultants (most of which are just like them).
I'd be happy to hear that they're worth every penny of the money
In this case, I have to agree - they're not. But until we put pressure on them like post dot-com has, their games don't get exposed.
*scoove*
Re:jump (Score:2, Insightful)
Unfortunately, for the past couple decades, management has been setting its own wages without much imput from the owners (the stock holders who care about profit). Rather than setting executive wages to maximize profit for the company--which would make the wages fall in the labor market supply-demand curve, they have been setting wages to maximize executive profit. Hence the result.
The blame does not, of course, lie with greedy executives like yourself. The blame resides with the poor oversight by stock holders. This in turn is fueled by the ever more popular notion that holding stock is like a simple bank account with bigger interest payments.
Re:jump (Score:2, Flamebait)
He just told you he built this company
with his bare hands, and now you tell
him he's hired hands?
Oh, I see, you just didn't read his post
at all, before replying, in the great
Re:jump (Score:2, Informative)
If he has sold the stock (or most of the stock) in his company to someone else, then yes. He is only a hired hand. There is no room for gratefulness, only profit. He built a product, the company, and sold it for cash.
If he hasn't sold the stock to someone else, then he isn't really getting a salary, he is getting profits. Any salary he does get is actually coming out of those profits. In that case he doesn't have much room to speak on CEO salary.
Re:jump (Score:3)
That's the owners' fault, not the managment! We're all out for #1 - the problem is that many businesses are created where the exectives' personal agenda is at odds with the needs of the company. In nearly all of these cases, management either a) did not hold a sufficient stake in the company to care about its success, or b) DID own a good chunk, but never believed in the business to begin with, so they wanted to cash out ASAP.
Cash messes with your head. Few people can keep their cool with a lot of dough, so it's important that CEOs are compensated in stock to the greatest extent possible. Then, when the company brings in money either through investments or, heaven forfend, SALES, the executives will be incented to spend the money on growing the business rather than enriching themselves short-term.
The best managers/CEOs are those who would rather spend the company's money on growing their business than on their own paychecks - ironically, they're the ones who end up with the most personal wealth in the long run. You just have to think of wealth as a consequence of your hard work, rather than an immediate goal.
It's okay for the owners to be hands-off, as long as they've set up the business properly to begin with.
Re:jump (Score:3, Insightful)
I agree totally. In fact, I even said so in the paragraph just after the one you quoted.
a) did not hold a sufficient stake in the company to care about its success, or b) DID own a good chunk, but never believed in the business to begin with, so they wanted to cash out ASAP.
I would have to add c) they were able to extract more cash through other methods than they were able to get by raising the value of the stock they owned, d) divestiture of stock was far too easy, making it the equivalent of cash, and e) they simply got the wrong amount of stock, because it is hard to gauge the value of stock, expecially in an options format used to prevent divestiture.
Re:jump (Score:2)
Spoken like someone who has no clue what a CEO does.
Granted, across the whole nation there proabably are a dozen that will do that for that one position-- but not for every CEO position.
The number of people qualified to be CEO who will do the job for a pittance are rather small.
Hell, Ben & Jerries tried to hire just such a CEO.
They only needed one not a dozen. For a year they couldn't find someone to take the job. And the guy they did find I think was retired and doing it as a lark.
No, this is another one of those silly ideas that people who think CEOs don't actually earn their money foster. DO you realize that you're fostering marxism? Or do you think there's a difference between liberalism and marxism in this country?
Its quite interesting how the liberal movement has been coopted, but I digress.
Really this all amounts to arguing about marxist propaganda-- the working class is oppressed! management does no real work and exploits your labors! Look at the loans management gets! Don't you feel cheated???
Re:jump (Score:5, Insightful)
then quote your post:
then, I'll respond:
The High-level execs who were the recipients of these corporate "gifts" ARE Junior! They didn't create the company, hell, they didn't even create much in the way of shareholder wealth. In the tech sector, it was the dot-com investor feeding frenzy that created any wealth that was realized.
You, OTOH are an entrepreneur. That is a very different species from these "boardroom stars," and I would not see your incentive reduced one iota.
Now, answer the original question
Re:jump (Score:2)
That's your form of bigotry. We already knew that.
It seems silly that you can't tell that an entrepreneur and someone who works at microsoft are not that different of an animal. Nobody at microsoft got a silvers spoon-- they all earn it. (I know, I've worked there.)
we're talking CEOs of large corporations (Re:jump) (Score:4, Interesting)
No one is arguing that a CEO shouldn't make MORE money than other workers at a company. The question is why they are being given absurdly high compensation packages compared to every other country in the world.
It's insiderism, it's a sleazy money grab; they know it's wrong, why else would boards of directors try to hide these compensation packages from their shareholders? See the Jack Welch of GE's compensation scandal [cbsnews.com] for only the latest such example.
You worked your ass off. You took risks, you got rewarded. But you can bet Jack Welch didn't climb any poles or take out the trash. Unless the trash was in Tahiti and he took the company jet. Most CEOs of large companies get a big payday whether or not their companies do well. Tying compensation to stock prices was supposed to fix that; instead they figured out how to fix their own stock prices until they could cash out.
Re:we're talking CEOs of large corporations (Re:ju (Score:2, Troll)
Also, from the article:
During his two decades as GE's leader, the company expanded from a $13 billion maker of appliances and light bulbs into a $480 billion industrial conglomerate. It has 313,000 employees in more than 100 countries.
In fact, the article doesn't even suggest that he got more than his fair share. All it says is that it might be PERCEIVED in todays business climate that his 6 year old contract might be excessive. He probably deserved whatever perks he was getting, but at least he's now VOLUNTARILY giving up those perks. How many other CEOs out there could say the same thing?
Re:we're talking CEOs of large corporations (Re:ju (Score:2, Troll)
If you think an apartment in NY is absurd compensation for the job Jack Welch did, then...
IF you think Jack Welch didn't work damn hard at GE then you are ignorant.
Hell, his efforts there are well known.
There's no excuse for you commenting on something such as that-- he well earned his compensation.
In fact, the whole reason he got the compensation plan he did was it benefitted the company to defer the compensation until after he retired.
That liberal idiots have managed to convince him to give back that money is a shame.
But he did nothing wrong. He earned what he got.
Sheesh.
What is this, russia?
I work hard (Score:4, Insightful)
"He worked hard, he deserved it," is a BS argument, unless you think that everyone else who works hard deserves to be paid equally.
Note that I'm not arguing for equal pay (though I often think that might be better than the current situation). Some people do deserve to be paid more than others, but not thousands of times more.
Re:we're talking CEOs of large corporations (Re:ju (Score:3, Interesting)
In much of the rest of the world, bribes, rewarding cronies / friends of the king/dictator, etc. is the way of things. Wealth is even more centralized in these societies and unlike the US system, middle to lower class persons have little chance of any upward mobility.
So you may be right - CEO's in third world nations don't do as well. But the leader's buddies do even better (look at the Saudi family, for example).
It's insiderism, it's a sleazy money grab
But is this unique to corporate America? I'd argue that sleazy money grabbing people exist everywhere, as does relativism. It's a mechanism for a lesser person to rule over a greater one, obtaining more resources with less work. Whether it's done with a gun or via a guilt trip (as is more common in our society), it's still parasitism.
they know it's wrong, why else would boards of directors try to hide these compensation packages from their shareholders
Because the company is in attrition/decline phase and the shareholders were in on the game. Seriously, we reelected a worthless, deviant parasite president because "the economy was good." I've seen greed in comm company boardrooms that everyone subscribed to, ignoring that it would kill the company eventually.
But as long as the shareholders got their increasing share price (or dividends), they went along with it.
Understand the only reason people are pissed now is that the market is down, profits are down (or gone), and the wheel isn't getting greased.
Tying compensation to stock prices was supposed to fix that
Let me throw out an alternative - promote a voluntary CEO standard:
- base pay less than $350K/annual
- bonus pay issued in stock grants or options
- inclusion of all benefits (personal use of jet, leased auto, housing stipend, stadium box, etc.) in pay package for base pay rule
- penalties that impact bonus pay for SEC violations, etc.
I'll promise you that at $350K, you're going to have some motivated CEO's in larger companies. Want that two million dollar vacation home? Get working.
Establish the CEO standard and list companies that comply with it. Put a notation next to the ticker symbol denoting complying companies. Sure, you can offer that $3 million base, but prospective investors will know you're not in compliance.
Thoughts?
*scoove*
Re:jump (Score:3, Insightful)
Are you a publicly traded company? If not, nobody really cares what the hell you pay yourself.
Re:jump (Score:3, Insightful)
Re:jump (Score:2)
They deserve what they get. These people chose to have a family, they chose to have a new car, credit card debt and a house too big for them.
Anyone with more than one kid is just blowing money out without responsibility. Kids are really expensive.
You choose to spend all your money, then you don't get to complain about not having any money.
Anyone who is prudent with their money will be able to retire early.
By the way, what makes you think that everyone who works hard should be compensated the same? What possible system of wealth redistribution could do that-- other than a brutal oppressive one like the USSR tried?
If our entreprenuer friend goes bust, I'll be upset. But you won't hear him saying that we owe him something because he worked hard.
Ha!
You have a bunch of kids and poor spending habits-- you DESERVE to have to work hard. That's the choice you made. I got no problem with it, but come to me and say I owe you something and you'll get nothing but contempt from me.
Re:jump (Score:2)
I meant to say, if our entrepreneur friend goes bust, "He'll be upset" not "I'll be upset". Doh.
Also, I often type to fast and say "care" when I mean "car".
Re:jump (Score:3, Interesting)
Right ON!
Anyone who thinks CEOs or "management" don't do any real work, is an idiot.
I've gotten tired of trying to explain to these people-- and have been forced to conclude that they aren't listening. They've made up their minds.
They have no vision and no desire to take any risks. They will sit in their little job and whine-- cause its a lot easier to whine than to, excuse me, bet the farm, as you did.
Basically, they want something for nothing. I have more contempt for them-- the unambitious who want to prevent those with ability from profiting on it, than I do for the guy you call Junior. Junior was given the silver spoon and didn't recognize the value of it, I can understand that. You know he's recognizing it now.
But those who think themselves "poor" or just scraping by (with the "help" of %18 credit card debt and a huge house they shouldn't have bought and a care that isn't 15 years old) -- those people should know the value of money, cause they've managed to run out of it.
And if they make the life choice to have lots of kids and spend spend spend, then they have chosen to be poor. I'll be friends, but I don't give any sympathy when they are jealous of my wealth.
I have one very close friend who's clearly jealous and I try and try to explain about credit cards and the stock market and all that, but thir eyes just glaze over. The credit card, and the shopping it represents, is their own personal form of crack.
One day, they will wake up from the high and find themselves hung over. Hopefully its not too late for them when they do.
But bitching about loans some company gives to its employees is just an excuse to ignore the %21 reality hanging over their heads.
To quote spike lee:
Wake Up!
Re:jump (Score:2)
Wealth is a privalige not a right. Wake up and take some responsibilty and ambition (I.e. something other than the national lottery).
Re:jump (Score:3, Insightful)
My answer to that is, first, a compensation that does not harm the company. A CEO paying themselves so much that it financially hurts the company is just as bad as an insider loan that hurts the company. And pay isn't just cash.
Second, you have to work with the people under you.... that's right, the rest of the company. An insane paycheck after years of 4AM tower climbs might feel good to you, but does everyone that works for you hate you for it? Yeah, some of the hate will be jealousy, but some might not be. These types of situations have a habit of playing themselves out in a predictable way. The bottom line here is your pay is a factor in how you "treat" your employees.
Lastly, I've been around a while, and I've seen another factor come into play with CEOs: ego. Your head seems screwed on relatively tight right now, but what about in 5 years? 10? I find it rare to meet a CEO that doesn't have an ego completely out of control. An out of control ego does all kinds of things, like insider loans to themselves, excessive pay, etc. It's a hazard of the job.
If you work hard, treat everyone fairly and pay yourself a lot but not too much, things should be OK. Otherwise, it's a train wreck in the making.
Re:jump (Score:3, Informative)
Since your average worker's pay is adjusted for inflation, so is this figure (or to be more precise, inflation is essentially factored out of it.)
Consider that your average worker today may be scraping by on 20-30k (most get less, but a few get more, and fewer still get a lot more) -- that means that the average CEO is getting 500x that, or around ten to fifteen million dollars per year.
I should have gone to business school rather than studying physics :)
Re:jump (Score:2)
Which should make you suspicious. IF you're the kind of person who actually reads annual reports, you'll notice that the average CEO makes between $250k and $500k. Some at very large companies make a million.
By the way, the average worker in the US makes $36k a year.
This means that the ratio between the average income in the US and the average CEO salary is a factor of 10, not even 45, let alone 200.
The 36k figure came from the IRS and is probably a year or two old. The CEO salary figure came from Forbes and is about a year old as well.
Re:jump (Score:2)
Re:jump (Score:3, Informative)
You might want to inform that bastion of liberalism, The Economist, who reported on survey of S&P 500 companies done by Towers Perrin, and that showed that American CEOs are being compensated 475 times more than their workers [economist.com].
Other sites [businessweek.com] have also reported that CEO compensation has grown by 600% in the period 1990-2000, and other Business Week surveys suggest a growth of almost 2000% since 1980. Even if we go nuts and assume that average worker income has doubled in the same time frame, it still means that the gap between CEO and worker is triple what it was just 10 years ago.
But why make assumptions? Let's look at what Fortune [fortune.com] has to say? Yep, even they show the astounding disparity between CEO pay raises and employee pay raises over the past decade.
Of course, I'm sure that anything that conflicts with your preconceived world view is just another "liberal lie".
Why? (Score:5, Insightful)
When you're making millions in cash and hundreds of millions in stock options, why do you need a loan? Heck, why does anyone need a $15 million loan in the first place?
eh? (Score:2)
It's exposé [dictionary.com] .
Re:In America no one knows how to type the é... (Score:2)
The real ASCII code (or rather, ISO-Latin-1 code) for é is 0xe9, which is decimal 233. Upper case É is 201.
Re:In America no one knows how to type the é... (Score:2)
Re:Why? (Score:4, Insightful)
If your company offered you a 0% loan and subsidized price to buy their products (assuming it is something that you want to use, and the company wants lots of other people to use), would you take them up on it?
Most corporate board members are current or former corporate execs. They are simply boosting their own. Chances are, if the board you are on approves the compensation package for CEO Jim Bob, and you happen to be a corporate executive for a company that Jim Bob is a board member of, well, if I helped take care of Jim Bob, he's probably gonna throw me a nice biscuit also.
Re:Why? (Score:2, Insightful)
Re:Why? (Score:5, Informative)
Usually because the stock option (or even stock, if it's restricted trade) cannot be exercised to convert it to cash.
Many of these dot-com m/billionaires were paper money rich only. VC's and such limited their pay (or the pay wasn't sufficient for the toys they wanted).
So they'd leverage their paper holdings - say $50 million in options - as collateral for a loan. It's the dot-com rich equiv. of a pawn shop or paycheck cashing service - pledging your stock for quick money now.
Unfortunately, should your options become worthless, you've got a slight problem...
*scoove*
Greedy idiots take what they can (Score:2)
Look, if you had a job offer which included a loan at ten times your annual salary, and you knew damn well it would be forgiven, would you not take it?
In other news... (Score:4, Informative)
Look at their budget! (Score:5, Interesting)
SEC's budget last year: $438 million
Budget under new law: $776 million
Budget after Bush cut: $568 million
So my question is, what does the SEC need so much money for?
$30 million / 100 new employees = $300,000 per new employee.
$438 million / 3,100 employees = $141,000 per employee.
$102 million / 3,100 employees = $33,000 raise per employee
$108 million / 3,100 employees = $35,000 per employee for computers and 'financing' to restore the agency after losing its New York offices.
Where is all of the SEC's money going?
Re:Look at their budget! (Score:3, Informative)
I've worked in the government and it is not efficient.
In my experience, most of the money goes to administrative related stuff while some of it goes to equipment and such.
Generally, each agency is headed by political cronies that have no experience or little in the area they work in. This is especially true with government CIO/CTOs.
What usually ends up happening is the ranks in an agency ignore the political cronies as much as possible. Dosen't make for efficient or good policy.
So, don't be too surprised the SEC wastes that much money.
Re:Look at their budget! (Score:2, Informative)
Unfortunately, to get good people for those positions, the government has to pay a fair amount.
Re:In other news... (Score:2)
If this is evidence of anything, it goes against your a and b, and has absolutely nothing to do with c.
Story about a total jag CEO (Score:5, Funny)
The CEO, walks up the guy and asks - "and how much money do you make a week?"
Undaunted, the young fellow looks at him and replies, "I make $200.00 a week. Why?"
The CEO then hands the guy $200 in cash and screams - "here's a week's pay, now GET OUT and don't come back!" Feeling pretty good about his first firing, the CEO looks around the room and asks - "does anyone want to tell me what that slacker did here?"
With a sheepish grin, one of the other workers mutters - "That was the Pizza delivery guy".
_______________________________________________
printed from fullofjokes [fullofjokes.com]
hehe - have a laugh folks, people take this shiat way too seriously. The firm foundation theory is now in full swing!
But (Score:5, Funny)
But they are the main figureheads responsible for the astounding progress of our economy- they increase productivity, inspire workers, and set a shining example of moral clarity for all.
Oh wait...
Frontline "Bigger Than Enron" (Score:5, Insightful)
The PBS series "Frontline" did a show called "Bigger Than Enron" that has an excellent website [pbs.org] to go along with the show. It contains interviews with many of the key players here, including former SEC Chairman Arthur Levitt, current chairman Arthur Pitt, and others.
It's acutally more robust than the B2.0 article, and goes into some detail about how politicians and businesspeople push for the SEC to have less power than it needs. At one point Levitt describes [pbs.org] how the heads of different congressioinal committees were threating to pull funding entirely from the SEC if Levitt didn't quit pushing for accounting reforms, the exact reforms that turned out to be so necessary. This was in April of 2000, just before the all the shit started to hit the fan.
Coming on in conjunction with today's announcement by the Bush Administration that they don't want to give the SEC too much money [nytimes.com], it's certainly not too much of a stretch to see a pattern develop.
Re:Frontline "Bigger Than Enron" (Score:3, Insightful)
Its worth pointing out that the guys threatening to eliminate the SECs funding were non other than Billy Tauzin and Joseph Lieberman.
Yep, our local Enron crusader and the last Dem VP candidate came down FIRMLY on the side of eliminating the SEC.
And now they are shock-- SHOCKED!-- that fraud has gone on.
Funny how liberals seem to just ignore this (And republicans too, but republicans see that the free market actually worked and corrected the problem swiftly and effectively, unlike government.)
Lieberman (Score:2)
During the boom market, the idea that the stock market could solve the big problems of Social Security after 2017 was rampant among politicians. More among Republicans, but many Democrats were in there, too. Lieberman was also among the politicians pressuring the Financial Accounting Standards Board to not require that corporate accounting be too closely connected to reality, and the rules have been loosened to the point where misleading accounting (fraud or artifice) that is illegal post-Enron is also just about mandatory according to FASB rules. No one wanted the SEC or FASB to do anything that might cause the stock market to stop ignoring the facts.
We may be getting more honest financial statements post-Enron, now that CEO's have to certify them, but they are only more honestly dishonest. CEO's aren't accountants and the accounting rules are so far through the looking glass that the accounting statements tell us just about nothing. The whole purpose of the system is to keep the suckers in the pews of the church of capitalism, investing so that the market god says we're prosperous and the suckers should be happy. Lieberman is part of the system.
Backwards... (Score:3, Insightful)
Don't forget, MS pays Slashdot to serve you this page.
Who needs who?
Waittaminute! (Score:4, Funny)
Uh-oh. Isn't he one of the Slashdot Bad Guys (tm)? And if it's him against Bush and his administration, other Slashdot Bad Guys (tm)...
I don't know which side to take! It's like Dracula vs. the Wolfman!
No, wait, it's like a corrupt, money-driven Dracula vs. an embarassingly incompetent, bald-faced lying Wolfman! This one's going to break my brain!
I'm not going to hold back here (Score:4, Funny)
Fuck you, I hope you get herpes from the whores you bought with the company AMEX card for your "Business trip" We all know the house is because you're so dumb you let your wife see the AMEX reciepts and you had to appease her.Rot in hell bitch!
--toq
What does the CEO do? (Score:2, Interesting)
How good do you have to be at making decisions to be worth millions?
Re: (Score:2)
Re:What does the CEO do? (Score:2)
I'm... speechless :D
and what a wonderful party it was (Score:3, Interesting)
shoot man, when else will we find companies like InternetCash.com [internetcash.com]???
These bozos ran around giving out samples of their "product" at awards shows for media outlets I've never heard of and lavish galas like their New Years y2k party. That one they rented an entire hotel on south beach, and got Perry Farrell and Mixmaster Mic to come and play. And play we did :) Free booze, grub, women, and . . . Their f%^& product was cash! They were just running around giving it away!
oh well, back to my personal austerity program
gs
Re:and what a wonderful party it was (Score:2)
That depends. Clinton was smart enough to keep greenspan. And then Bush did as well.
As long as we can continue to cut taxes and have a rational fed chairman, we'll see that party rather soon.
Look at historical bear markets over the last 100 years-- they are getting shorter and shorter in duration.
Stop! It's a cookbook! (Score:2, Interesting)
If only...
Whats wrong in it? This is capitalism! (Score:3, Insightful)
It has been happening ever since Veblen's days. We notice it now because we are prone to target people with a lot of money now, whereas we "the people who do all the work" dont have any
Re:Whats wrong in it? This is capitalism! (Score:2)
by some people I've argued with, but
this is just simplifying things too much.
Consider a thing you take for granted, like,
oh, I don't know, electricity or transportation.
You obviously realize that it takes a huge group
of people to create that, and that group
needs to have a leader, otherwise nothing
would happen. Would you go on a ship without
a captain? Then why do you complain about
the position of a CEO?
Re:Whats wrong in it? This is capitalism! (Score:3, Interesting)
From another perspective...
Business runs on the commons, and I don't mean to invoke "communism, there". Business runs on an "economy", and the strongest economies have a strong middle class. Yet it seems that tied in with the executive compensation 'thing' is the desire to cut 'costs'. ie - pay as little as possible for workers. Taken to its extreme, it amounts to dismantling the middle class, which appears to be what's happening, today. Without a strong middle class, how can there be a strong (Or perhaps any, doesn't War actually improve the economy by expanding the middle class, when you really think about it?) recovery?
Knowingly taking part in dismantling the middle class amounts to foolishness, IMHO. Foolishness is forgivable in someone with my salary, but for someone making over 100 times as much, it's not. If they're drawing down 100 times as much as me, they'd better be at LEAST 10 times wiser.
Evaluating an exec's actions in executing a layoff, this may me microscopically smart, but it's sure macroscopically stupid. I see where Sun is going to lay off 11% of their workforce. If they're like my employer, the fat has been gone, and they've already cut meat at least once. The layoff makes the quarterly financials look better, but in the long term hurts the company. Assuming a recovery comes, their development plans have been hurt, they've paid 'bronze parachutes' to the laid off, and it's going to cost more to hire and train new workers later to get back on track.
I wonder what would happen if Sun tried an 11% across-the-board pay cut. I know the cost of an employee is roughly double the salary, but if across-the-board included executive compensation, and if no bronze parachutes were awarded, I suspect the savings would be the same. Would the top talent leave? Maybe, maybe not, depends on an old concept called "loyalty". I'd be less inclined to leave if I knew the sacrifice were shared by ALL, if it kept my team together, and if it were temporary. It's hard watching co-workers who are friends lose their jobs in a depressed economy.
Bonus question: Did the Rigas family build Adelphia from scratch? ie: Did they pilfer their own creation, or had they stepped in, later? Don't know, curious. This post comes from an Adelphia connection.
Corporate America is modern Feudalism (Score:2, Insightful)
Employees in the U.S. need to wake up! You don't live in the land of the free, you live in a modern Feudal state!
Go read the typical employee non-disclosure agreements and contracts: it is little more than thinly veiled modern day indentured servitude. You don't think so? Code for Microsoft for awhile, then try jumping ship to Sun.
Who are the robber barons? Why, our CEO's. Who are the knights in armor? Why, our fine, robe-clad judicial system, paid by the highest bidder! Who are the mercenaries? The congressional branch of the U.S. govornment, of course!
Seriously people, the U.S. is rife with corruption and apathy.
Comment removed (Score:5, Insightful)
Re:Corporate America is modern Feudalism (Score:5, Insightful)
Look dude, i truly do find that admirable. However, i think the two of you are going to extremes.
Yes, in some distinctive ways American Business is like feudalism (i read a title i can't recall with the same theme, but talking about the 70's), with legal privelege of the few (see the music business and Duke Valenti of the RIAA). This is simply a natural consequence of market forces that tolerated the intense consolidation of American business from the early 80's through present. If Americans really didn't like lower prices for more goods, it wouldn't have worked. It did however set the stage for today's catastrophes by consolodating immense power in a proportional few.
On the other hand. The everyday investor earned more than ever before to buy goods that grew cheaper each year. The whole country went along on the drunken orgy (see above comment), and it approved so long as tommorrow morning, and the hangover (now) never came. Still, people who have faith that the USA will not become Argentina and default on our debt (which it did do in the early days) and make those savings bonds of yours worth less than enron stock (still highly unlikely today).
There is however one important idea that you, my patient, steady, long-term investing friend of mine, did not grasp.
You may have your million dollars in forty years, but it will be worth the same as 100,000 today. Meanwhile, these people of corporate privelege (like the M$ guy, or Bernie Ebbers $400 million!), who get away with it are rich with UnEarned income.
Some of my hosting clients see what I do as unearned, because i'm not sending out their html pages by hand. Meanwhile, i invest massive amounts of time improving daily. These CEOs who have on average 5.5 million dollars today and leave take the cake for the sum total of a couple of years of coasting on reputation.
In conclusion. If Feudalism is the extreme right and your anti-anti-everything rant is the left. Our country is dangerously far to the right. You may dispute this assesment, but historically, American politics today are closer to fascism than they have ever been (driven by George W). Our Senate passed a war resolution quickly to get to a far more important election. It is truly disturbing.
gs
Re:Corporate America is modern Feudalism (Score:2)
And of course, if you don't like the anti-competition clause, you don't have to sign it!
Somehow these people think that they HAVE to take the job offered to them and that if they don't like the terms, but sign anyway, they are oppressed.
Sheesh, what sheep.
Re:Corporate America is modern Feudalism (Score:2)
Seriously, you can do a lot better than that. The choices aren't bonds OR dotcom stocks! There's a lot of other investment types out there.
Go read Buffettology or any of the good books on Warren Buffett (or just read his writing on the berkshire hathaway website.) You won't find a more conservative investor than him, and you can do a lot better return, and a lot earlier retirement with prudent common stock buying.
And the great thing is-- in a bear market like this one there are some great deals out there. We've gone from "screw this insurance company, I'm buying fiber optics" to "screw this insurance company, I'm buying cash". Which means that in 1998 there were great deals on insurance companies, and in 2002 there are also great deals on insurance companies.... and hell, an insurance company is about as reliable as a government bond. (Once you understand how they work.)
$452,890. (Score:3, Informative)
$452,890.
That's what a million dollars 40 years from now is worth in todays dollars.
Or put another way, thats what you'll have to retire on-- which is plenty enough to retire on.
This is for all the math challenged liberals who will post decrying your retirement plan claiming that a million dollars won't be worth nothing in 40 years.
Course, those who want to be poor will be.
Personally, if I had $452,890 right now, I could stop work today and retire. Travel the world and in 40 years my net worth would be at least $6,768,454.94.
People just don't do the math much-- as you pointed out, you can retire on only $150 a month in 40 years.
Imagine how much sooner if you invested the money in stocks returning %15+ and put in $400 a month?
But people would rather lease a car for $400 a month than retire in 10 years or so.
Correction (Score:2)
- "Fools who invetsed in crap are parted from their money"
Except that they didn't know it was crap. It was off-balance sheet debt in the case of Enron. Investors were none the wiser. There was no way they could know unless they were high up in the chain of command at Enron.Re:Corporate America is modern Feudalism (Score:2)
In other words, he'll be able to afford to go to a hospital when he has a stroke, verses the alternative of getting on a 4 year waiting list?
I don't see how actually getting medical treatment is so bad.
(YEs, people in canada wait decades for heart work after a stroke.)
Re:Corporate America is modern Feudalism (Score:2)
No they won't.
They already take half of everyone's income. But they can't do much more because already the wealthy are leaving the country, and as they leave they take the future economic growth with them.
Thus there will always be political pressure keeping taxes "reasonable"...
And if they become unreasonable, land is cheap in belize and they will sell you citizenship for $40,000. Everyone speaks english, the country is politically stable and the climate is not too bad. And the belizian dollar is tied to the US dollar.
Re:Corporate America is modern Feudalism (Score:2)
That's funny. I have worked for microsoft and there was nothing there that took away my rights. Yeah, sometimes they are a bit broad with the IP definitions, but usually they are reasonable and if they aren't go work for someone else.
Seriously people, the U.S. is rife with corruption and apathy.
Yes, its called Liberalism. People too apathetic and to lazy to realize thier advocating Marxism. Not that the idiot christians in the republican party are any better.
Of course, they'll never teach Ayn Rand in schools. That would be too dangerous!
Insider loans was how Bush got started (Score:4, Interesting)
http://www.american-reporter.com/1954/112.html [american-reporter.com]
Another important provision included in the bill makes it illegal for corporate executives to receive loans from the company coffers. The President has acknowledged he received a loan from Harken in the late 1980s.
http://www.commondreams.org/headlines02/0712-06.h
In recent days, questions have resurfaced about the way Bush sold $848,000 worth of shares in Harken Energy Corp. just before the stock price slumped, and about Bush's delay in filing the required insider-trading report. The Harken deal helped Bush pay off the loan on his $606,000 investment in the Texas Rangers baseball team, for which he walked away with $14.9 million. In his defense, Bush has repeatedly noted that the Securities and Exchange Commission investigated possible insider trading but took no action against him. The investigation occurred during his father's administration. Bush's critics have sometimes joked - as they did of his father - that he was ''born on third base and thought he hit a triple.'' In fact, the full context of Bush's business dealings provides a somewhat different metaphor: This is the story of a man who struck out numerous times before being bailed out by big hitters who often were family members, friends, or supporters of his father.
Comment removed (Score:5, Insightful)
The Seventies (Score:2, Interesting)
Comment removed (Score:5, Insightful)
Re:A Great Example (Score:2, Insightful)
This is why the free market always fixes problems-- it took care of Enron, Global Crossing and Tyco rather fast, and exerted its maximum penalty- death, on the companies.
While congress is a bunch of jack asses that do more harm than good and never get anything done that actually helps people.
Its time for a constitutional ammendment that for every line of law added to the US Code, two lines of previous law must be removed, until the US code is no more than 5,000 pages in total (or some character count that's a better representation.)
This country was supposed to have a revolution every so often , and people were supposed to be the ones running it. Now we have a government out of control, trying to eliminate any participation of the people and eliminate our human rights.
WAKE UP!
Where are the americans? It seems the majority have lost sight of liberty, libertarianism and the idea that america was supposed to be.
Re:A Great Example (Score:4, Insightful)
While congress is a bunch of jack asses that do more harm than good and never get anything done that actually helps people.
What about the "penalities" on those who caused those companies to die? Right now, I don't see anyone in immediate jeopardy of a long sentence in a "pound-me-in-the-ass" prison. Just a few token arrests of higher-ups. The "free market" requires some level of government regulation to insure that buyers of goods can be confident that they will receive what the seller has advertised. If the government doesn't do its best to keep fraud out of the marketplace, then the market itself will fall apart. This disillusion is part of the reason behind this most recent stock market crash, as well as others in the past.
Companies who, in an effort to keep their stock price high, fraudulently report profits as they're burning cash like crazy deserve to die. CEOs and others who develop and execute schemes to defraud shareholders to receive pay in excess of what they would have received if they were telling the truth need to be punished severely. I believe the government needs to do all three of the following things to such crooks: (1) seize all assets from those involved in the fraud and from those, including family members, involved in covering up the fraud (like the ImClone guy who couldn't sell his own stock, so he asked his daughter to sell hers), (2) send them to prison for many years (if those involved knew that they were likely to destroy the company beforehand, then they deserve a life sentence), and (3) after the long sentence prevent them from ever working again in any capacity at a publicly traded company.
People are really underestimating the damage that the managements of Enron and Tyco, among others, has done to the United States. It's probably going to take the country the better part of a decade to recover from this decline. And if history is any guide, the ones that inflicted the damage are going to get off lightly. A year in prison, a $1 million fine, and a promise not to do it again would be my over/under line on punishments on those like Ken Lay's. And after the ordeal, he'll still have most of his 9-figure fortune that he obtained largely through fraud.
If I go into a bank, hold it up, and walk out with $100K, I would be looking at a 10+ -year sentence, and no one would be dramatically hurt, either physically or financially. A couple of people who attempted to defraud Michael Jordan out of a few hundred grand are facing up to 25 years in jail for an action that would have not ruined the superstar's livelihood, let alone that of thousands. In neither case would the perpetrators expect to keep their illegally-obtained goodies.
If this type of fraud or extortion is grounds for a sentence of 10 years or more, then why isn't executive fraud held to the same standards when formulating a punishment. The MAXIMUM sentence in the new law passed by Congress for executive fraud is 10 years. Those at companies who have already collapsed will be subject to a maximum sentence of FIVE YEARS, because the actions in question took place before the enactment of the new law. And as far as a I know, there's no requirement that the sentencing judge of a guilty party include forfeiture of assets in the sentence. Does anyone else see something unjust in this picture?
Whether the U.S. government is overstepping its bounds and stomping all over its citizens rights is a debate for another thread. But I do believe that the government has been derelict in one of its few duties in a "free market" economy: keeping people honest. Would you really want to take part in a completely unregulated market? Ironically, the only such markets that I know to exist have been those that are outlawed by governments, such as the market for cocaine and heroin in the U.S. In markets such as these, fraud and violence is just as likely to gain someone additional market share as a supplier who produces a superior product. Would you call such a market truly free?
It's unfortunate that it's no longer legal... (Score:5, Informative)
The reason it's unfotunate is that making unsecured loans, and later forgiving them was one of the ways you could avoid getting taxed twice on the same income. It was also one of the few ways an ordinary human whose last name was not "Heart" or "Rockafeller" or "Hilton" could afford a home in California.
I know people who killed themselves after the market crash in 2000, because their tax bill for their "Alternative minimum tax" exceeded $4M on stock whose value was far, far less than that (one of them was a Netscape employee, who exercised at the market high in February of 2000, and then was screwed, when the stock didn't go back up after falling later that year before April 15th of 2001,
when his tax bill came due.
These days, this is closed by a mechanism called "early exercise", where your company gives you a loan to buy the stock options at the time of grant, and then payment is due at the point you sell the stock, or you can surrender the stock in lieu of payment. This avoids the capital gains tax burden (in the form of state and federal AMT) in the case of a loss, by eliminating the appreciated value between the time of grant and the time of exercise.
Now this is illegal; so if you accept stock options and do an early exercise, and the company goes belly up (like 9 in 10 startups do)... well, the paper turns into a debt instrument, and they come after you for the value at the time of the exercise.
It's really assinine to tax deferred compensation in the form of stock or loans, and it's really assinine to tax-collect people to death over it: but now, this is the only option, for ISO grants to employees.
You may think "Good, we'll stop those Enron bastards!"; but the people you are really screwing over are line employees with ISO grants, who are generally taking a below market wage in exchange for a stake, and startups. The "Enron bastards" will just come up with a different approach to the problem, which is that we have a capital gains tax in the first place.
-- Terry
Naive question (Score:3, Insightful)
Were the stockholders so blinded by the inflation of stock values that they didn't check whether the company is using their money to create value instead of lining the pockets of management?
I guess I've answered by own question.
SBLT Insider Loans since 1987 (Score:3, Informative)
SBLT loans are required to be approve by a small regulatory body. Once they've been approved, the entity receiving the loan can be held accountable for up to 50% of the capital put forth. This, of course, is all a subset of existing loan laws that the article talks about.
Companies like Enron have been abusing CEO power by using corruption in the SBLT authoritative body to pass loans that usually wouldn't have gone through, creating some loans with sketchy backgrounds. Unfortunately, the Bush administration's recent laws to enforce "corporate trust" have failed to address this situation, leaving many stock holders in the cold. Buyer beware!
Shareholder liability (Score:3, Interesting)
This will make all investments more expensive by the liability insurance premium. In order to ensure that new inventments will not be stifled investors could be given a tax break on the returns of their insured investments.
When I give my money to someone in return for a percentage of the venture I expect them to take certain calculated risks and I know that I may not get my money back. I am free to take this risk. What cannot be ignored, though, is that by encouraging someone to take risks I put not only my own money at risk. Thousands of lives may be affected by these risks. Why should I be able to walk away from a failure and just write it off as a lost investment?
Why do we always single out Microsoft? (Score:3, Interesting)
In this case, a bunch of companies were taking advantage of loopholes. Some did so for reasonable purposes -- for example, attracting a talented executive when other methods would have cost the company more. Other companies did it for less productive reasons -- there is a lot of cash flowing by, so let's each grab a handful, and since this has to go on the books somewhere, we'll use the loophole of the week -- corporate loans. Or maybe all of the loans were some mixture of the two. Whatever -- it isn't important to the argument.
What is important is that it wasn't necessarily ethical, but it wasn't necessarily all vice and corruption, and it wasn't necessarily illegal. In this case, it seems that when Microsoft saw that other companies were getting in trouble for something that it had been doing as well, it came forward and put its cards on the table.
Another thing to consider is similar to a point I saw in some earlier posts (that Microsoft was making money, but Enron wasn't). That almost covers it, but I would prefer to say that "Microsoft could afford it, but Enron couldn't." Enron executives were taking cash even when they knew that the company was just scraping by, or worse, about to take a tumble. Microsoft made the loans when they knew that the company could afford to take the hit if necessary.
I guess what I'm trying to say is that with Microsoft at position -- what was it, 18 or 28 or something -- on the chart of companies with loans to executives, having given out $30 million in loans and not really causing a problem for its stockholders, I don't really see why the SlashDot community or the author of the article needs to single out Microsoft.
For what it's worth (probably not much)...
Greed and executive pay (Score:3, Insightful)
That may be true, but there's only one driving force behind the gigantic pay for America's CEOs: Good Old Fashioned Greed. If USians didn't feel that the only way to prove their status in society was to amass a huge pile of money then this wouldn't have happened. I mean you can't really argue that a personal fortune of more than, say, a hundred million is actually going to help you live a happier life.
I scratch your back, you scratch mine (Score:3, Insightful)
Don't give me any crap about "it's because capitalism is great". CEOs and executives of publicly owned corporations have a legal and moral obligation to do what is in the best interest of the shareholders, and these ridicilous loans and compensation packages definitely aren't serving that interest, especially when the company doesn't have the profitability to support it.
Capitalism is not the problem, it's the extreme abuse of it which has become commonplace. Capitalism was here in the 1970's too, and if 45x the average salary was good enough incentive back then for CEOs to do their jobs, why does it now take 500x for them to do a shitty job of it?
It's no longer about paying what the market will demand or paying for performance. The boards make the compensation decisions, so what CEOs do now is put their friends on the board where they can work together more effectively to suck more out of the company. Or there are CEOs who are on the boards of each other's companies, so there's the "I scratch your back, you scratch mine" business going on, all at the expense of the shareholders.
The opposite happens too. (Score:2, Interesting)
Basically, the execs defer up to 100% of their compensation. They get some juicy tax benefits AND the company pays them a higher interest rate than they could get in the real world. (We wouldn't want them to risk their money in the stock market or anything.) Also, the company claims higher cash reserves and can make use of that money. It's not really accounted for as a debt though...
What does this mean for Apple? (Score:5, Funny)
Those people must be dedicated.
THANK YOU! (Score:3, Funny)
I realize that I have nothing to contribute to the dearth of humor, so like a nerd I searched google [google.com].
Sponsor an Enron Exec [about.com]
"The wife of Enron CEO Kenneth Lay, Linda Lay, was on the 'Today' show yesterday. She said her husband is an honest, moral man who has done nothing wrong. And today Hillary Clinton said, 'You go, girl!
"The White House again refused to turn over discussions Vice President Cheney had with Enron officials over energy policy. Cheney said if he had to disclose every time some business donated a ton of money then came in to write its own policy to govern itself, he wouldn't get any work done." --Dennis Miller
"Former Enron CEO Jeffrey Skilling appeared before Congress. Do you think they even bothered swearing him in? -- Jay Leno
"The CEO of Enron, Jeffrey Skilling, married one of the Enron secretaries this week. It's amazing how romantic these Enron guys can be when they realize that wives can't be forced to testify against their husbands. Skilling said today she was the best secretary Enron had ever had. She could shred 950 words a minute.
"I did not have political relations with that man, Ken Lay." --Sen. Fritz Hollings (D-S.C.), poking fun at Bush for distancing himself from Enron
"Ken Lay's testimony before congress is being referred to as the story of "take the money Enron." --Cybersatirist Bob Hirschfeld
"The big rumor going around is, we may begin bombing Iraq. Or, as the White House calls it, Operation Keep Enron Off The Front Page." --Jay Leno
Enjoy! [about.com] =)
No, it's about $80 million (Score:3, Informative)
Rick Belluzzo, the companies assassin... (Score:3, Interesting)
Waah indeed (Score:2)
Re:Waah indeed (Score:2)
Re:Waa waa waa (Score:2)
Re:Get over it... (Score:2)