patrick.net

Different Sean Says:

> yeah, but the rich have been taking away an increasingly
> large share of corporate earnings in the last decade or two.

Then I wrote: (Capitals added the second time)

Actually the opposite is true in big US companies with unionized workforces since it is the huge increases in salaries and benefits over the last decade or two that have taken the largest share of CORPORATE EARNINGS (the rich auto industry stockholders have not had a happy decade).

Different Sean Says:

> that’s simply untrue. 5 minutes research will demonstrate the
> lie. I would check the salaries of the execs in the big 3 before
> I spoke.

We were talking about the “largest share of CORPORATE EARNINGS”. While the increase in executive salaries have been large (and Different Sean may be surprised that I find most of them excessive and unjustified) even the huge nutty excessive executive compensation has not taken a bigger bite out of CORPORATE EARNINGS as the salaries and benefits paid to current and retired union workers (GM has many people who have been getting retirement pensions and benefits from the company for more years than they actually worked at the company).

Then Brand Says:

> Sean, since it would only take five minutes of research to
> support your conclusion, why don’t you post some research that
> supports your conclusion? Otherwise it seems hypocritical to
> accuse FAB of fabricating his facts.

Left wingers never let “facts” get in the way a a good rant…

Then Different Sean Says:

> FAB is working extra hard to claim the honor of being the first of
> the petit bourgeoisie rentiers against the wall come the glorious
> revolution (only after the robber barons). here’s an article and a
> website. it even has a little picture.

We agree that CEO pay is excessive, but I’m waiting for a link to a site that shows a single industry with Union Workers that is paying a higher percentage of CORPORATE EARNINGS to executives or shareholders today than they paid in the past or a link to a single company (forget the auto industry) that is paying a lower percentage of CORPORATE EARNINGS in payroll and benefits…

P.S. Look at US executive remuneration increases over the last 20 years and compare with increases in CPI or even total GDP in the same period. I don't think you'll find that they're tracking together. You can point anecdotally to the success of *one* particular company, etc, and how well earned and richly deserving the CEO is, but there has been a universal trend to re-appraising exec salaries upwards, regardless of the relative success of the particular company. Further, stock price increases are simply smoke and mirrors, that do not necessarily reflect the true worth of a company or measure its productive or social usefulness. Stock prices rise and fall depending on the mood of the market. Bio-techs and dotcoms were heavily overvalued in 2000, for instance.

Different Sean Says:

> Look at US executive remuneration increases over
> the last 20 years and compare with increases in CPI
> or even total GDP in the same period. I don’t think
> you’ll find that they’re tracking together.

We all know that most executives are overpaid since the system is rigged with guys (who are often in the same Camp at the Grove) voting on each others pay.

The problem is that as crazy as it is executive pay is still taking a relatively small percentage of corporate profits compared to employee and benefits. General motors has well over a MILLION current and retired workers (throw in spouses who also eligible for benefits and it is way over a million).

If the top guys with a “C” in front of their titles get an extra million next year it will take less of the overall corporate earnings as a $1 per month increase to the workers and former workers.

I wrote:

> Actually most people that “fall through the gaps” are
> not “just lazy” they are usually both stupid “and” lazy
> (with many smoking a lot of pot making them even
> stupider and lazier)…

Different Sean Says:

> oh right, you’ve done a nationwide scientific study on the
> prevalence of stupidity and laziness and its moral hazards,
> have you?

I did write “most” to cover the super smart hard working guy who may have once ended up on welfare at one time. I’m wondering if in Different Sean’s world he would describe all the people who fell through the gaps and ended up at the welfare office or on skid row as “smart hard working”?

(I could say something about time and postmodernism here...but I'd better not)

There's another 5 minutes work. I don't know about addressing FAB's increasingly tortuous exceptions to exceptions to make a point which he disagrees with himself anyway. I've gotta run some errands. 'Unionised' workers pay does NOT go up 16% a year... and you begrudge a few pension funds for workers (the ones who actually built the cars) but don't worry about massive golden hellos and golden parachutes...

US executive pay goes off the scale

David Teather in New York
Thursday August 4, 2005
The Guardian

Hewlett Packard has had a costly few months. Chief executive Carly Fiorina took $42m with her when she was forced out of the computer and printer maker after failing to deliver on profits. Her replacement, Mark Hurd, was then given a $20m golden hello. That, of course, was in addition to his annual salary, which could reach $22m a year.

Whatever the hand wringing about pay scales in Britain, they are dwarfed by the cash and perks lavished on executives in corporate America.

Examples are easy to find. Richard Grasso, the former head of the New York Stock Exchange was ousted after it emerged he had accrued $190m in deferred compensation; Philip Purcell, the boss of Morgan Stanley, the underperforming Wall Street bank, was forced out and pocketed $113m; the top three executives of Viacom shared a total of $160m last year. Stan O'Neal, of Merrill Lynch, earned $32m in 2004; Richard Fauld, at Lehman Brothers, got $26.3m, and James Cayne, at Bear Stearns, got almost $25m.

A journalist worked out that it would take someone on the US minimum wage around 11,000 years to earn the $109m banked last year by Yahoo chief Terry Semel.

After a couple of years of moderate falls in compensation, following the end of the technology boom and a slew of corporate scandals, executive pay in the US was back on the rise again last year.

A survey of the top 179 companies by the consultancy Pearl Meyer found that the average payout for chief executives rose 13% in 2004 to $10.5m. The average bonus was up 24% to $2.3m.

Chief executive pay in the US has risen dramatically over the past 25 years, going into overdrive during the 1990s boom.

Figures published by the labour federation, the AFL-CIO, show how far the gap has grown. In 1980, a chief executive made $42 for every dollar earned by a blue-collar worker. By 1990, that gap was $85. But the real gains in the boardroom were made in the decade that followed as firms ramped up share options. By 2000, chief executives were earning $531 for every dollar taken home by a typical worker.

Another way of looking at the growth is that the compensation given to the top five executives in a company accounted for about 10% of that firm's earnings in 2003, compared to 5% in 1995, according to a Harvard study.

Paul Hodgson, a compensation expert at the consultancy Corporate Library, said the increases have two points of origin; stock options riding the bull market, and what he calls the "ratchet" effect. "A chief executive will look around at peers and say 'I want what he is getting'," he says. He believes the increases can only continue.

When executive salaries hit the political radar in the US Federal Reserve chairman Alan Greenspan, in a rare pithy moment, described the "infectious greed" that had taken hold of corporate America during the late 1990s that led to fraud at the likes of Enron, WorldCom and Global Crossing.

In the years that followed the boom salaries did fall, chiefly due to the drop in the value of stock options. According to the Harvard study, which stretches back to 1993, chief executive pay fell from an average of $17.4m in 2000 among the broad S&P 500 index of companies, to $9.1m in 2003. But the recovery of the markets means chief executive compensation is again edging higher. Mr Hodgson says that a key problem is that American investors are not as vocal as they are in Britain.

If there is no concerted effort to curb excessive executive pay in the US, there is at least growing concern about rewards for failure.

Shareholders in Morgan Stanley are rolling up their sleeves for a fight over Mr Purcell's riches. More perverse was the deal offered to co-president Stephen Crawford: $32m over the next two years or the entire sum upfront if he quit. Not surprisingly, he quit.

Salaries and bonuses are not the only way that executives are getting rich - there are also retirement plans, golden hellos and windfalls when a firm is bought.

Gillette chief executive James Kilts, for instance, will get around $95m from selling the firm to Procter & Gamble due to a clause in his contract. Hank McKinnell, the chairman and chief executive of Pfizer, will be paid $6.5m a year in pension benefits after he retires while Lee Raymond at Exxon Mobil will get $5.9m a year, at a time when many companies are paring back the pensions they pay to ordinary workers.

Other perks have previously gone almost unnoticed but pressure from investors and regulators is forcing better disclosure. Bank of America recently disclosed it paid $36,000 for security at chief executive Kenneth Lewis's home, in addition to his $22m salary.

It is not uncommon for shareholders to foot the bill for a chairman's club membership. In April, Viacom disclosed that it was reimbursing co-presidents Leslie Moonves and Thomas Freston for sleeping in their own homes on business, on top of their $20m salaries.

Note executive remuneration has jumped from 5% to 10% of corporate earnings in the preceding article over 20 years. I'm not sure what it is you're even arguing against, to be honest. You took exception to 'robber baron' and now agree with it. hmmm

Gah! The folds upon folds resemble the theoretical physics of a black hole. DS attacks FAB for hypocritical "high point" selection, and then mounts his attack with anecdotal high points himself. Resorting to quoting journalists about something dramatic is like asking Satan to elaborate on the usefulness of selling him your eternal soul--the brochure looks fantastic, but the eventual facts are somewhat vapid and searingly painful.

Somebody get Randy H or DInOR back on this thread before the hypocrisy about hypocrisy begins to distort the space-time continuum. Otherwise we're approaching the asymptote where Peter P's commentary on spirituality exceeds simple economics. astrid, save us by mentioning something yummy! I have no answer to my acidic and carbonated red wine question from last thread...

Or to agree with FAB: Left wingers never let “facts” get in the way a a good rant…

... but they often let a good rant get in the way of wealth and facts. After all, for the philosopher it is far worthier to be destitute but full of inspiration than full of good food and with a dearth of things to rebel against.

FAB, I am seeing some apartment buildings go up for sale in my city. 4x and 10x, I am curious on your views of how to make these units profitable, maintenance costs, etc. A few buildings are almost the same as a single family home, and since my housing needs are next to nothing and my cashflow excellent, I am curious how to work the equation.

Brand,

I'm working on a new thread "The Internal Revenue Code Made Me Do It!"

Meanwhile, feel free to argue about the virtues of thick crust pizzas versus thin crust pizzas. (Double points for anyone who can convincing add Erlend Oye into a discussion about pizza crusts).

-convincing
+convincingly

FAB,

My previous post about GS bonuses was a paraphrase of something I read. I am quite willing to stand corrected about the meaning of structured finance, but I don't see how a CDO team leader could be considered worthy of a bonus in the tens of millions.

But then, I don't work in IB.

asking Satan to elaborate on the usefulness of selling him your eternal soul–the brochure looks fantastic, but the eventual facts are somewhat vapid and searingly painful.

sounds like our ERP provider...

DS attacks FAB for hypocritical “high point” selection, and then mounts his attack with anecdotal high points himself.

yeah, right. high points like the average of dozens of companies... maybe GDP is just an anecdotal figure too... gets republicans off the hook tho -- "OK, so the average has gone up 100% for all the Fortune 500 cos, but that's just anecdotal! - it's cherry-picking! now leave me alone to redeem my stock options..."

Oh, I do love it. For once, I'm not the one arguing with either of them. I will say that while FAB seems to like to stylize his examples to prove his arguments, DS refused to agree with me that Pi = Pi everywhere in the universe; claiming it was all some grand subjective narrative.

Personally, I like thick crust pizza.

pi only equals pi in non-Euclidean space... in fact, pi doesn't even exist except in our hearts and minds, it's a man-made convention to describe a ratio :P

I had blueberry pi for my birthday earlier this month. :)

- non

FAB,

I'll grant you that calling our domestic tax structure progressive is something of a misnomer. I think it may have progressive elements, but overall the code has become barnacled over in the process of making, say, unique objects of art deductible and in the granting of other favors both worthy and not.

I'm not one of those who believe a flat tax based code would necessarily be simple; for me it's a question of equality before the law, and not a bid for simplicity.

As to the stupid or lazy, I've noticed references in early 20th century English works to the 'deserving poor' - used in the sense of 'deserving assistance' - which seems to me a useful distinction. As it implies an alternate category of the undeserving, I presume that dog won't hunt in the here and now.

Wrong FAB:

http://sfbay.craigslist.org/search/apa/pen/74?bedrooms=3

Only one of those are under $2k and it is an apartment.

There nothing wrong with being wrong, but you should not be too stubborn to admit it.

Shoot, missed the flat tax discussion, when I was at my brother's "tamale party weekend."

Next time, I guess.

Different Sean Says:
Different Sean

No he didn't, is this some kind of attempt at an AI spambot?