Bush is pro CEO salary/bonus regulation ?

uscitizen said:
Bush takes aim at CEO pay
POSTED: 11:55 a.m. EST, January 31, 2007


NEW YORK (AP) -- President Bush took aim Wednesday at huge salaries and bonuses for corporate executives, going to Wall Street to say compensation packages should hinge on how good a job a CEO does for the shareholders.

http://www.cnn.com/2007/POLITICS/01/31/bush.economy.ap/index.html
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Part of the problem, though, is that it's difficult to say just what "benefiting the shareholders" entails. It's far too easy, in the short term, to focus on the stock price.

If the company is gutted and pillaged but the shareholders still profit, has the executive breached his trust? I would say so and so would many conservatives here but there's little incentive for stockholders to agree.
 
OrnotBitwise said:
Part of the problem, though, is that it's difficult to say just what "benefiting the shareholders" entails. It's far too easy, in the short term, to focus on the stock price.

If the company is gutted and pillaged but the shareholders still profit, has the executive breached his trust? I would say so and so would many conservatives here but there's little incentive for stockholders to agree.
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many of the LBOs of the 80 followed this pattern, but the recent series of high cost golden parachutes to executives that were awarded despite crappy performance is the focal point now.
 
No he doesn't propose regulation. Do you read the artilces you post?

>>"Government should not decide compensation for America's corporate executives," the White House said in a report ahead of Bush's speech. "But the salaries and bonuses of CEOs should be based on their success at improving their companies and building value for their shareholders."
 
Seems to me what Bush is saying is right. He critizes the overpayment, but isn't planning for govermental control over the private sector. I agree with that. I think many are overpaid, but I don't want the govement to dictate what they should be paid.
 
I thinks sports stars are way overpaid. but I wouldn't support a law that would limit what they are paid.
 
I don't believe in a min wage either. And I agree, I don't go to sporting events, other that some school events and little league.
 
Troglodyte27 said:
many of the LBOs of the 80 followed this pattern, but the recent series of high cost golden parachutes to executives that were awarded despite crappy performance is the focal point now.
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Those instances, while egregiously ugly, are almost a distraction from the central issue, in my view. The real question is: what is the fundamental purpose of the company? Why does it exist and how do we gauge how well it's performing?

Companies exist for two reasons. At the surface, motivational level, they exist to make money. At the more fundamental, social level, they exist to provide services and manufacture and distribute goods. The premis has always been that they couldn't fulfill the first function without effectively fulfilling the second. There is a great deal of truth in that but, I submit, we're now seeing the weakness inherent in it too.
 
OrnotBitwise said:
Those instances, while egregiously ugly, are almost a distraction from the central issue, in my view. The real question is: what is the fundamental purpose of the company? Why does it exist and how do we gauge how well it's performing?

Companies exist for two reasons. At the surface, motivational level, they exist to make money. At the more fundamental, social level, they exist to provide services and manufacture and distribute goods. The premis has always been that they couldn't fulfill the first function without effectively fulfilling the second. There is a great deal of truth in that but, I submit, we're now seeing the weakness inherent in it too.
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I think the underlying, unstated assumption (perhaps what you termed the weakness) in this is the time element. Surely I can ignore the customer - short term - and get a profit. In the long term, this fails, and you need #2 to get #1.
 
Troglodyte27 said:
I think the underlying, unstated assumption (perhaps what you termed the weakness) in this is the time element. Surely I can ignore the customer - short term - and get a profit. In the long term, this fails, and you need #2 to get #1.
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Pretty much right on I think Trog.
I do take customer service into consideration when spending my money.
 
Troglodyte27 said:
I think the underlying, unstated assumption (perhaps what you termed the weakness) in this is the time element. Surely I can ignore the customer - short term - and get a profit. In the long term, this fails, and you need #2 to get #1.
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Agreed.

But what incentive has the investor to prefer long term stability over short term profit? Certain individuals will, obviously, but that's just a personal preference. My point is that there's no structural incentive in the system to promote the one strategy over the other.

To put it another way, we've got too many predators and a shrinking base of prey in the market ecology. One way to deal with it might be to let them just hash it out and starve the excess predators. I fear the human consequences of taking the ecological analogy too far, however.
 
actually the current capital gains taxes promote not having a long term inter5est in corporations and real investment in them.
And I am taking full advantage of it too. Making about 20% weekly for the past couple of months.
But I feel that this system cannot long last in it's current form.
 
i was taught to focus on ''running'' the business, not the stock price.... that would follow if you are running the company with realistic, solid plans and had ideas of how to move forward with gains, profitably.

focussing on the stock price, was a ''no, no''!
 
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