Thread: What Recession? CEO Pay Up 3.5% In '07

I guess it makes sense to me since CEO's last at a company for a shorter time than professional athletes and those guys can rake in higher numbers than that. what boggles my mind is why a company in this economy that is falling into a hole will keep throwing money at the team captain, in any sort of sport a underperforming player is gonna get benched or traded....

It's one thing that stays constant. CEO's always get a rise, even when they fuck a corp up they get the golden handshake. Really annoys me.

Because some company is lost X amount of money or had to close X amount of plants, does not indicate poor performance by the management. Say the company lost $30 million instead of the expected $100 million, the management had a positive effect of $70 million, and could be considered to be doing an excellent job despite the absolute loss of $30m. Some CEOs have taken paycuts, I believe Continental Airlines's big execs have taken cuts to help with loses.

Point being, we know nothing about the companies, nothing about the CEOs, or their how their performance is graded. And this article/post seems to be nothing more than an attempt to drum up wealth-envy.

Originally Posted by brogers

Point being, you know nothing about the companies, nothing about the CE Os, or their how their performance is graded. And this article/post seems to be nothing more than an attempt to drum up wealth-envy.

I worked for Motorola for 21 years, management screwed up that company big time.

To make a long story short, we had 5 in house techs and 3 road techs in one shop...when they closed 4 shops we wound up with 12 managers in 1 shop....their solution...fire the techs who actually Work ..
We lost business because we were short on manpower, the managers were too busy playing solitaire on their computers.

CEO's are overpaid lazy MOFO's

They can learn a thing or two from the Japanese.

If I had wealth envy I would definitely not watch sports.
I think most CEOs only care about their own pockets and not the future of this country.

I despise greedat the cost of others.

Originally Posted by min0 lee

I worked for Motorola for 21 years, management screwed up that company big time.

To make a long story short, we had 5 in house techs and 3 road techs in one shop...when they closed 4 shops we wound up with 12 managers in 1 shop....their solution...fire the techs who actually Work ..
We lost business because we were short on manpower, the managers were too busy playing solitaire on their computers.

CEO's are overpaid lazy MOFO's

They can learn a thing or two from the Japanese.

I failed to see any mention of Motorola in the article. In addition, your personal experience in one "shop" (I don't know the management structure of motorola, but I'm assuming the "shop" is the most basic unit of their company) doesn't say anything about CEOs from other businesses, I don't think it even says that much about the CEO of motorola to be honest. Yes it is stupid to have 12 managers in one shop and fire techs who work, but what does that have to do with dozens of other companies or their executive compensation? You had one bad experience with a manager, and thus all "CEOs are overpaid lazy MOFO's?" ...

CEOs get sacked all the time, it doesn't benefit the board of directors or shareholders to have an incompetent moron destroying their stock price.

I work for American Axle & Manufacturing. The CEO & chairman of the board, Richard E. Dauch, took a substantial risk when starting AAM. He bought the driveline division from GM and really turned it around into a profitible business. He asked for loyalty from the employees to make it happen. People gave their best because they believed him when he said his most important asset are the employees. The last several years profits from the US plants have been used to build plants in other countries and those costs being posted as losses against those plants. Then comes the strike this year with nearly 50% cuts in pay, increase in health premiums, less vacation and holidays and to top it off letting go of 2000 of the remaining 3600 plant employees. This past weekend the salaried employees started receiving buyout offers. $35,000. Not even a full year's pay. No medical, no pension, nothing.

So much for the value of the employees.

Dick Dauch's base pay went up for this year. He gets a $3.9 million bonus just because. It isn't performance based. It's a "just because" bonus. Last year he was paid over $10 million in one form or another. From a company that had a $30 million profit and was expected to do substantially better. Like moving the decimal point to the right one place.

In the meantime the US based employees are getting poked in the ass because of complete and utter incompetence on the part of management.

Originally Posted by Zaphod

I work for American Axle & Manufacturing. The CEO & chairman of the board, Richard E. Dauch, took a substantial risk when starting AAM. He bought the driveline division from GM and really turned it around into a profitible business. He asked for loyalty from the employees to make it happen. People gave their best because they believed him when he said his most important asset are the employees. The last several years profits from the US plants have been used to build plants in other countries and those costs being posted as losses against those plants. Then comes the strike this year with nearly 50% cuts in pay, increase in health premiums, less vacation and holidays and to top it off letting go of 2000 of the remaining 3600 plant employees. This past weekend the salaried employees started receiving buyout offers. $35,000. Not even a full year's pay. No medical, no pension, nothing.

So much for the value of the employees.

Dick Dauch's base pay went up for this year. He gets a $3.9 million bonus just because. It isn't performance based. It's a "just because" bonus. Last year he was paid over $10 million in one form or another. From a company that had a $30 million profit and was expected to do substantially better. Like moving the decimal point to the right one place.

In the meantime the US based employees are getting poked in the ass because of complete and utter incompetence on the part of management.

You might not be representing the whole picture. I have family who just offered a LBO of 1 year salary plus full benefits...director level management. The LBO's you are talking about are labor related and I know you prolly don't want to hear this, but US labor only represents a portion of the companies human capital...and its a dwindling amount. I'd take what I could get and GTFO of that place if I were US labor.

AAM is hands down the worlds best auto parts supplier. Its one of the few that didn't get concessions from the UAW 5-10 years ago and still left Dana and Tower behind in the dust.

The company is growing but the focus isn't on US labor anymore. Thats supplied by Mexico for North America...I was impressed by Dauch who was prepared for this and ramped up production in Mexico over a year ago to help compensate for the lack of production in the US.

Your EBO in Bad Hamburg is penetrating new Euro markets. The new plant in Thailand is going to be companies crown jewel for its Chinese market. There is a reason why AAM stock held through its difficult spring this year...Dauch and company had the foresight to hedge the companies risks by investing in the CORRECT emerging markets. I had an offer to work at the EBO but shot it down, b/c the auto industry is too cut throat and unstable for me...even in Europe.

Getting back to the CEO:

CEOs aren't brought in for "work". In fact many times, they aren't even brought in to make decisions...thats upper management's job, not executive managements. Execs approve of the formulated strategy put forth by directors and upper management. They create parameters and set vision for the corp...and they typically don't get there by birth rite. They usually put their time in at the bottom of the white collar totem poll...typically.

But the MOST important asset an executive brings to any corp. isn't knowledge, work ethic, etc....but the NETWORK. They know are well liked by the right people at the right. They know how use their network to benefit the company. This can be done by bring in (stealing) human capital from competitors, influencing Congress or the White House to pass favorable legislation, appeasing the board of directors. This is the CEO most useful asset, just ask Halliburton or half of the banking industry in NY.

Sure its shitty that labor and workers get no pay raise while the CEO does...but the fact is: they just aren't as valuable. Its hard to swallow, but its true.

My gripe: exec. severance packages. I can accept the gross pay and raises for the MOST part, but platinum parachutes irk me a bit. They usually get this to simply keep their mouth shut about less than ethical or poor PR on their former employer. Think of these packages as expensive non disclosure agreements....very expensive.

Originally Posted by brogers

Because some company is lost X amount of money or had to close X amount of plants, does not indicate poor performance by the management. Say the company lost $30 million instead of the expected $100 million, the management had a positive effect of $70 million, and could be considered to be doing an excellent job despite the absolute loss of $30m. Some CEOs have taken paycuts, I believe Continental Airlines's big execs have taken cuts to help with loses.

Point being, we know nothing about the companies, nothing about the CEOs, or their how their performance is graded. And this article/post seems to be nothing more than an attempt to drum up wealth-envy.

Originally Posted by min0 lee

Rick Wagoner, chief executive of General Motors Corp., announced earlier this month the company had to close four plants that make trucks and SUVs because of lagging demand as fuel prices soar. That followed the posting of a $39 billion loss in 2007, a year when its stock price fell by about 19 percent, without adjusting for dividends.

And Wagoner? His pay rose 64 percent, to $15.7 million.

Wikipedia states he has been the CEO for 8 years, hardly some new blood that made a $100 million loss a $30 million loss.

Originally Posted by Dale Mabry

Wikipedia states he has been the CEO for 8 years, hardly some new blood that made a $100 million loss a $30 million loss.

So, you think GM's CEO did a bad job and thus that means that the other 499 cited as having their pay collectively go up 3.5% are doing a bad job?

I'll say it again: Please tell me exactly how the board of directors and share holders benefit from having their company lose money and market share. Please tell me what motivation they have to keep a CEO who is doing a bad job.

I think that the people on the board of GM or any other large corporation are a lot better able than I am to decide who is doing a good or bad job as CEO of their company. Would you agree? I think they're going to do what is in their best interest, and a CEO who is destroying the value of their stock is not in their best interest.

Originally Posted by brogers

So, you think GM's CEO did a bad job and thus that means that the other 499 cited as having their pay collectively go up 3.5% are doing a bad job?

I'll say it again: Please tell me exactly how the board of directors and share holders benefit from having their company lose money and market share. Please tell me what motivation they have to keep a CEO who is doing a bad job.

I think that the people on the board of GM or any other large corporation are a lot better able than I am to decide who is doing a good or bad job as CEO of their company. Would you agree? I think they're going to do what is in their best interest, and a CEO who is destroying the value of their stock is not in their best interest.

So, should we start a list now of CEOs who ran their business and in some cases, their entire industry into the ground yet got pay raise each year? You are informed, so you have an idea of how long that list is. So tell me why these people were appointed, and why they weren't called on their bullshit when they got pay raises for doing an awful job?

Originally Posted by KelJu

So, should we start a list now of CEOs who ran their business and in some cases, their entire industry into the ground yet got pay raise each year? You are informed, so you have an idea of how long that list is. So tell me why these people were appointed, and why they weren't called on their bullshit when they got pay raises for doing an awful job?

You need to read what you quoted. Your response indicates you either didn't read it or didn't understand it at all.

I'll try to summarize: The shareholders and board of directors are better equipped to make decisions on executive compensation than some random people on a message board (myself included).

Originally Posted by brogers

So, you think GM's CEO did a bad job and thus that means that the other 499 cited as having their pay collectively go up 3.5% are doing a bad job?

I'll say it again: Please tell me exactly how the board of directors and share holders benefit from having their company lose money and market share. Please tell me what motivation they have to keep a CEO who is doing a bad job.

I think that the people on the board of GM or any other large corporation are a lot better able than I am to decide who is doing a good or bad job as CEO of their company. Would you agree? I think they're going to do what is in their best interest, and a CEO who is destroying the value of their stock is not in their best interest.

My reply was to this. It is not in the best interest to keep a CEO that is doing a bad job. Apparently you didn't read my post that you quoted. I asked a very simple question. But don't bother answering it.

I just can't see a company like GM pay a CEO that much money for a company that laying off thousands.

Not too many people get raises for poor perfomances...some get fired.

On a another note I think he deserves this raise if not more.

MTA chief raise another 10G 'mistake,' sez riders watchdog

MTA chief raise another 10G 'mistake,' sez riders watchdog

By Pete Donohue
Daily News Staff Writer
Monday, June 16th 2008, 10:36 PM

The MTA's finances have been tanking - and straphangers may get hit with another round of fare hikes - but that didn't stop Authority CEO Elliot Sander from snagging a raise.
Hired to the tune of $340,000 just 18 months ago, Sander last month received a $10,000 boost to his economic package, which includes a base salary and other benefits, the Metropolitan Transportation Authority confirmed Monday.
Chairman Dale Hemmerdinger authorized the approximately 3% increase, which is retroactive to January, the MTA said.
"You're kidding," said an incredulous Gene Russianoff of the Straphangers Campaign. "It's a mistake. I think he's a great head of the MTA, but you don't raise salaries in the middle of talk about a fare hike. ... The message it sends is not a good one amid tough times for the riding public."
Hemmerdinger released a statement defending the move.
"I approved a 3% increase for the executive director/CEO, equal to increases earned by the management that reports to him," Hemmerdinger said. "Lee is still paid less than the heads of smaller transit agencies in Washington and Los Angeles, and far less than what he would earn in the private sector."
Nonunion MTA managers and executives received a 3% raise in April.
Sander last week told a state Assembly committee that the MTA's projected 2009 operating budget deficit could be in the $500 to $700 million range. Unless the state and city provide additional subsidies, the MTA, which raised fares and tolls in March, would have to impose another set of hikes next year, Sander said. The MTA is legally required to have a balanced budget.
The deficit is expanding because of the sliding economy, resulting in a huge drop in revenues the MTA gets from taxes on certain real estate transactions in the region. In addition, its fuel costs have soared and payments on billions of dollars in debt are sky-high.
The MTA's next five-year capital plan will likely be in the $29billion range and have a funding gap of as much as $20 billion, Sander has said.
A former city transportation commissioner, Sander was a vice president with an international transportation firm when former Gov. Eliot Spitzer picked him for the top MTA administrative post. His original contract granted an annual salary of $265,000, an annual housing allowance of $60,000 and $15,000 in deferred compensation toward a retirement package.
The MTA declined to specify how the parts of that package changed but said the value increase was $10,000.

The timing of his raise was bad that's for sure.
Compared to what other CEO's make this is nothing.

I met him once, he came on the track structure and congratulated us for a job well done on the 7 line.
He called us the Marines of the track department. Cool.