Comments on: Read all about it… http://www.footnoted.com/my-big-fat-deal/read-all-about-it/ Morningstar's guide to what's hiding in SEC filings Fri, 10 Feb 2012 20:24:57 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Ulricii http://www.footnoted.com/my-big-fat-deal/read-all-about-it/comment-page-1/#comment-2560 Ulricii Fri, 20 Apr 2007 16:49:09 +0000 http://www.footnoted.com/read-all-about-it/#comment-2560 Carlton fails to take into account the fact that the dollar value of a CEO's contribution to corporate net worth is heavily influenced by the opinion of the CEO. I suppose a board can't entirely escape that influence. However, it's simply common sense for other interested parties to apply a discount rate to over-generous self-evaluations. Carlton also ignores the many cases where executive pay keeps spiraling up in period of time when corporate sales, income, and total worth are spiraling down. It might be tagged socialistic if Michelle urged government action to align executive pay with some measure of objectively evaluated corporate contribution. I've never seen her do that. What she does is bring anomalous facts and figures, pay items that don't look quite right, to stockholders' attention. Beyond that, each stockholder must decide whether to hang in there or bail out. That's not even close to socialism, Carlton. It's an informed free market decision. And that's called intelligent capitalism. Carlton fails to take into account the fact that the dollar value of a CEO’s contribution to corporate net worth is heavily influenced by the opinion of the CEO. I suppose a board can’t entirely escape that influence. However, it’s simply common sense for other interested parties to apply a discount rate to over-generous self-evaluations.

Carlton also ignores the many cases where executive pay keeps spiraling up in period of time when corporate sales, income, and total worth are spiraling down.

It might be tagged socialistic if Michelle urged government action to align executive pay with some measure of objectively evaluated corporate contribution. I’ve never seen her do that. What she does is bring anomalous facts and figures, pay items that don’t look quite right, to stockholders’ attention. Beyond that, each stockholder must decide whether to hang in there or bail out.

That’s not even close to socialism, Carlton. It’s an informed free market decision. And that’s called intelligent capitalism.

]]> By: Michelle http://www.footnoted.com/my-big-fat-deal/read-all-about-it/comment-page-1/#comment-2550 Michelle Fri, 20 Apr 2007 00:48:46 +0000 http://www.footnoted.com/read-all-about-it/#comment-2550 Sorry, Carlton, if you confuse my questions over unusual bonuses in an industry that's facing significant challenges, with socialism. It's not and shouldn't be taken as such. If you want to continue to buy the "sports stars and celebrities get paid a lot too" line that's used to justify all sorts of strange payouts, that's certainly your perogative. My point of view is different. As I noted in the post, Reed seems to be an impressive executive and perhaps he is worth that $1.5 million. But given the current appetite for newspaper stocks, he'll definitely need to work whatever he has in his bag of management tricks. Sorry, Carlton, if you confuse my questions over unusual bonuses in an industry that’s facing significant challenges, with socialism. It’s not and shouldn’t be taken as such. If you want to continue to buy the “sports stars and celebrities get paid a lot too” line that’s used to justify all sorts of strange payouts, that’s certainly your perogative. My point of view is different. As I noted in the post, Reed seems to be an impressive executive and perhaps he is worth that $1.5 million. But given the current appetite for newspaper stocks, he’ll definitely need to work whatever he has in his bag of management tricks.

]]> By: Carlton Banks http://www.footnoted.com/my-big-fat-deal/read-all-about-it/comment-page-1/#comment-2547 Carlton Banks Thu, 19 Apr 2007 18:33:52 +0000 http://www.footnoted.com/read-all-about-it/#comment-2547 In theory, wage earners can't be paid more than they are worth. That's the argument against minimus wages, i.e. if the clerk at TGT only helps TGT make $6, it is uneconomical to pay them $10, and clerks don't get hired if employers are required to pay them more than the benefit they provide. On the other hand, if an employee is underpaid, they can go work somewhere else, so $35,000 for a reporter is what they are worth, at least in the current industry structure. (I know good reporting is worth more that $35,000 with the appropriate distribution/audience.) I guess I'm just getting tired of the socialistic bent to this website. It easily conceivable that a CEO of even a small company can add $1.5M of value to the company through wise capital allocation decisions. Since a CEO can make or lose the company many multiple of his/her salary, I don't see what's wrong for paying a CEO a fraction of the value they should be creating for me as a shareholder. However, paying too much for someone who creates no value, that I have a problem with. So the angle I would have appreciated in this article is looking back at a CEO's career and seeing how much value he/she created OR LOST in his/her prior positions of leadership. Thank you In theory, wage earners can’t be paid more than they are worth. That’s the argument against minimus wages, i.e. if the clerk at TGT only helps TGT make $6, it is uneconomical to pay them $10, and clerks don’t get hired if employers are required to pay them more than the benefit they provide.

On the other hand, if an employee is underpaid, they can go work somewhere else, so $35,000 for a reporter is what they are worth, at least in the current industry structure. (I know good reporting is worth more that $35,000 with the appropriate distribution/audience.)

I guess I’m just getting tired of the socialistic bent to this website. It easily conceivable that a CEO of even a small company can add $1.5M of value to the company through wise capital allocation decisions. Since a CEO can make or lose the company many multiple of his/her salary, I don’t see what’s wrong for paying a CEO a fraction of the value they should be creating for me as a shareholder. However, paying too much for someone who creates no value, that I have a problem with. So the angle I would have appreciated in this article is looking back at a CEO’s career and seeing how much value he/she created OR LOST in his/her prior positions of leadership.

Thank you

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