CBS "Evening News" showcased Aflac CEO Dan Amos on April 29 because the company plans to begin giving shareholders a vote on executive compensation beginning in 2009.
While CBS correspondent Mark Strassmann did explain that the shareholders' vote would be non-binding, the premise of the story was that it could create a ripple effect throughout corporate America.
"Other CEOs may soon get the message -- perform or you're a sitting duck," said correspondent Mark Strassmann.
Strassmann also supplied viewers with a common class envy talking point: "In one work day, America's average CEO earns more than the average employee makes all year."
Following Strassmann's report, anchor Anthony Mason interviewed "executive compensation consultant" Brian Foley, who has been a regular go-to for the media on CEO pay.
"At some companies, the pay packages are out of control," Foley said.
Mason asked Foley if stockholders get angry when a CEO is paid a high salary, but the company is struggling. Yes, "It gets people frustrated that the big guy makes that much money when their stock goes down," responded Foley.
The CBS reports did not indicate that some shareholders do not think voting on CEO pay is the best idea. Coca-Cola shareholders rejected compensation ratification among other proposals at its annual shareholders meeting.
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CEO'S what about AAA's? Acto
April 30, 2007 - 18:25 ET by Dee BunkCEO'S what about AAA's? Actor's, Anchor's and Athletes? Isn't their pay ridiculous? Don't many of them make more in a day than many Americans make in a year? Who works harder and has more stress? CEO's or the AAA's?
And if we are going to move to a fair world then I call movie star. I'm the first so that's fair and those who are movie stars now - they have had their time so they only have dibs on cleaning toilets and picking fruit.
....stockholders get angry wh
April 30, 2007 - 18:36 ET by Blonde....stockholders get angry when a CEO is paid a high salary, but the company is struggling.
This is the proverbial double edged sword.
Linking executive compensation, particularly in the short-term, to gains in stock prices can also be an extremely iffy proposition. There are numerous ways of manipulating short term earnings, causing a boost in the stock price (and thus, executive compensation), which will cause a company long-term operational problems.
The point of CEO compensation is to make it worthwhile to both parties. And while some of the libs scream over 9 figure compensation, if that's what a CEO is worth, that is what he/she is worth.
It's called the free market, however much the liberals would like to call it an act of the Robber Barons.
Exactly Blonde - and that is
April 30, 2007 - 18:50 ET by Dee BunkExactly Blonde - and that is what created many of the problems at Enron. Most executives and high level management have a large percentage of their pay in stock options and bonuses and dishonest people like Andrew Fastow will cheat while others like Skilling and Lay might not look as closely as they should into good news.
Dee,Even the honest CEO's hav
April 30, 2007 - 18:55 ET by BlondeDee,
Even the honest CEO's have to "convince" the market continually. They have to set realistic earnings expectations, then live or die by the financial performance of the companies they run.
It makes far more sense to me to set realistically based CEO salary levels, made up of numerous performance based outcome objectives...increase in stock price, dividends, free cash flow, ebit, year over year growth, etc.
As to the whining of the liberals....who cares? They don't get it, they never will, all they want to do is "take the profits" a la Mrs. Clinton.
Blonde - you are right they j
April 30, 2007 - 19:07 ET by Dee BunkBlonde - you are right they just don't understand and don't even try to. They just buy any class warfare argument hook line and sinker when it comes to business people making money, but when artists and celebrities strike it rich they don’t have a problem. And those people are not providing jobs.
I agree, because also the rev
April 30, 2007 - 19:52 ET by zfI agree, because also the reverse is true. A CEO can make decisions that hurt stock prices in the short term but end up being highly successful for the company in the long run as well.
Can you cite any shareholder
April 30, 2007 - 19:54 ET by j. frank wilsonCan you cite any shareholder proposal passed by the owners of a major corporation? The Board has it sealed up with proxies and institutional ownership. The Board hires Management - and Management is sure to take care of the Board. You make it sound as if Coca-Cola is some sort of special case. It's not. It's the norm.
I used to feel that CEO's s
May 1, 2007 - 00:41 ET by radiofitz34I used to feel that CEO's saleries were ridiculously high. Now I don't worry about it. Most major companies have a system of checks and balances which includes the shareholders. Especially after Enron et al, they know it's better to shoot straight.
The libs problem is the same as usual "Robin Hood" mentality and the fact that they detest capitalism (unless it suits them). It's as obvious as your toenails that democrats want all of us to be socialists.
Ms. Clinton's comments still ring in my head from a couple months ago. "I'll take all those profits and ...." referring to oil companies. Scary stuff.
Shareholders setting salary i
May 1, 2007 - 08:51 ET by AlgerHissShareholders setting salary is so laughable. This is truly the inmates running the asylum.
The average shareholder doesn't have a clue about issues like this. They would set a salary at some level based on ignorance and emotion, then go right out and finance a car for 6 or 8 years, which is a breathtakingly stupid thing to do.
As Judge Smail pointed out in Caddyshack, "Well, the world needs ditch diggers too".
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