Discuss Detroit Ľ Archives - Beginning January 2007 Ľ CEO salaries - Do you believe what Ford and GM say ? ę Previous Next Ľ
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Darwinism
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Username: Darwinism

Post Number: 634
Registered: 06-2005
Posted on Friday, May 04, 2007 - 6:29 pm: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

http://www.forbes.com/lists/20 07/12/lead_07ceos_CEO-Compensa tion-Consumer-Durables_9Rank.h tml

Comparing some numbers from the Forbes data, it seems like we have been supporting executive greed in our auto companies way too long. Do you actually believe when they tell us that they need to pay big salary to hire good talent ?

Well, in that case, does anybody have sources to find out the CEO salaries at Toyota, VW, Honda and a few other peers ? Because it is time the Board of Directors at Ford and GM stop the BS, while the companies get run to the graveyard.
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Track75
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Post Number: 2523
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Posted on Friday, May 04, 2007 - 8:14 pm: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

quote:

it seems like we have been supporting executive greed in our auto companies way too long.

Who's we? Are you a shareholder in F, GM and DCX?

Their salary is just another expense item in a huge corporation and a relatively tiny one at that. The companies probably spend more on toilet paper each year than on executive salaries.

Most of the CEO compensation comes from stock options. If the stock goes up, they benefit. If it doesn't, they don't, so their interests are aligned with the owners of the company. If GM's market value goes up by several billion, the CEO gets a few million. Most shareholders think that's a fair deal.

When exercised, stock options dilute the ownership share of all other existing shareholders. The money doesn't come from the company, or from customers.

If you are a shareholder you have standing to object, and you have a venue via the board (of directors, not this message board).

Looking at just US companies, Ford's CEO's comp was ranked #79, GM's was #407. Is this so out of line for 4th largest (GM) and 10th largest (F) companies in the world?
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Jerome81
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Username: Jerome81

Post Number: 1403
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Posted on Friday, May 04, 2007 - 8:17 pm: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

Here we go again.

You want Bob Lutz to work for $60K/year? You don't get big-name-one-and-only talent for the price of a guy who works the line.

I have zero problem with it. Don't like it? Build your own wealth from business. Or work your ass off so you're the one getting the millions.
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Mikeg
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Username: Mikeg

Post Number: 815
Registered: 12-2005
Posted on Friday, May 04, 2007 - 8:25 pm: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

I'm with Track75 and Jerome81 on this one. Well stated!
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Durango
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Username: Durango

Post Number: 19
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Posted on Friday, May 04, 2007 - 8:45 pm: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

Jerome81 and Mikeg,

I agree with both of you. Are the CEO salaries large? Yes they are, but so is the risk and the responsibility that each of these people have to deal with everyday. I have worked for two of the largest chemical companies in the world in sales and product management. I followed sales and product management to share in the risk and share in the potential greater reward. It's one of the key principles of capitalism. You have to be willing to work harder, work smarter, and manufacture luck based on your work ethic and ability to relate with people to get ahead.
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Darwinism
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Username: Darwinism

Post Number: 635
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Posted on Friday, May 04, 2007 - 9:19 pm: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

quote:

You want Bob Lutz to work for $60K/year? You don't get big-name-one-and-only talent for the price of a guy who works the line.



Well, let's not compare apples and grapes here. Of course we are not going to make Lutz earn the same salary as an assembly worker. However, Lutz SHOULD NOT be paid obscenely more than his peers at VW or Toyota, don't you think ?

Similarly, why shouldn't we put Wagoner and Mulally up in comparison against Funo, Ghosn and Winterkorn ? Are we really that closed-minded and arrogant to think that people like Lutz and Fields are the only 'big-name-one-and-only talents' ? How about taking a look at the track record of Jim Press as a yardstick ?
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Patrick
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Username: Patrick

Post Number: 4373
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Posted on Friday, May 04, 2007 - 9:22 pm: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

I thought Jim Press makes only $500k a year. Pretty low don't ya think?
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Lilpup
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Username: Lilpup

Post Number: 2081
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Posted on Friday, May 04, 2007 - 10:09 pm: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

if you're this crabby about auto exec salaries don't ever look at Wall St. wages
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Firstandten
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Username: Firstandten

Post Number: 90
Registered: 05-2006
Posted on Friday, May 04, 2007 - 10:47 pm: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

At one time the Japanese auto company top exec's made no more than 10 times the amount of the hourly worker. I don't think that it still holds true today.
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Darwinism
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Username: Darwinism

Post Number: 636
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Posted on Friday, May 04, 2007 - 11:10 pm: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

Lilpup: Nothing to be crabby about auto exec salaries with Wall Street salaries, because that would be putting oranges next to kiwis. If I look at Wall Street wages, I would stack it against Tokyo, London or Frankfurt. Wouldn't you ?
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Detrola
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Username: Detrola

Post Number: 44
Registered: 02-2006
Posted on Saturday, May 05, 2007 - 7:20 am: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

The problem so many seem to have with exec salaries speaks to the class issues we have in this country. The same questions are rarely applied to the salaries of athletes. At least not with the same rancor.

Talent goes where the money is. Talent does not always equal success. Rebuilding takes time. These things are true in both sports and business. It would seem that we identify more with Allen Iverson than Alan Mulally.
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Mcp001
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Username: Mcp001

Post Number: 2623
Registered: 11-2003
Posted on Saturday, May 05, 2007 - 9:52 am: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

If you do not like what they are being paid, there is nothing preventing you from not purchasing their products and contributing to their salaries.
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Huggybear
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Username: Huggybear

Post Number: 290
Registered: 08-2005
Posted on Saturday, May 05, 2007 - 9:55 am: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

As Coleman Young once said, ďGeneral Motorís ainít running no fucking charity.Ē

I don't know why Ford is paying Mulally that much. Itís many multiples of what anyone has ever made there before. Maybe they thought he could make it a good takeover target for Nissan or Toyota and that they would get it all back on the tender offer.

Moving downtown, before you start attacking people like Wagoner, did you even bother to flip to the other sections of that survey to see what other sectors make? Consumer durables is chump change compared to other sectors (if you have problems with someone making $3mm in an industry where blue collar comp is $75K, itís time to pick a fight with Robert Half, whose temps make as little as $10/hour and the CEO gets $75 million). And even within consumer durables, companies with much smaller revenues, organizations and problems than GM pay much, much more. Compare that the CEO of Johnson Controls makes $25mm, TRW gets $13mm, Goodyear gets $11.5mm, Harley gets $7.25mm, and Whirlpool gets $4.62mm.

General Motors is a multinational corporation that makes about $200+ billion a year in revenues. Itís the third largest corporation in the world. It has sales in over 50 countries; manufacturing in around 20; a unionized workforce in North America, Europe and Korea; and has extensive finance operations. As a result, it has characteristics of a government manufacturing operation, a bank, and a health insurer. Itís tough to run. And itís a job that no one wants. If you succeed, you are only credited by the media with ďstaving off for a few more years the inevitable decline/bankruptcy/etc.Ē If you fail, youíll never work anywhere again. Part of why CEOs get paid so much is risk Ė and GM is a very risky company for the person running it. Youíre not storing up your reward in heaven, if you get my drift.

[Question: does anyone who understands Toyota's governance structure think that Jim Press's role has anywhere near the complexity of Rick Wagoner's?]

In terms of governance, GM's board of directors is in control of salaries, and it is made up of... surprise... people whose background is with other large corporations. If they thought the salary was truly out of line, then they would not allow it (and given what CEOs make in general, itís unlikely that they would blink). If GM's board thought that the solution was paying someone in another industry $30mm a year to come in and run things, they wouldn't blink. Thatís apparently where Ford ended up with Mulally.

Wall Street people Ė i.e., the institutional investors and funds that own the biggest chunks of GM - ultimately run the show. To them, a couple of million in salary is cheap - especially when it's a complicated multinational company with a financial throughput bigger than the GDP of 150 countries (World Bank figures would put General Motors at the 28th largest economy in the world). Think for a minute that in that world, a stock jockey can make half a million churning up $5mm in gross commissions.

At the end of the day, Wagoner and Lutz have done a pretty good job of getting GM on a track to profitability. On their watch, GM has upped to 4mm cars a year abroad, rehabilitated a defunct Korean automaker into a profit center, cut its workforce by a third, made Buick a popular and profitable brand (well, at least in China), and finally leveraged global design capabilities. I thought Wagoner was incompetent when he came on, but with a solid product person like Lutz behind him, things are a lot better than they could be.
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Wally2times
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Username: Wally2times

Post Number: 32
Registered: 03-2007
Posted on Saturday, May 05, 2007 - 10:02 am: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

I don't think anyone in the world deserves to make that kind of money.

I understand we live in a capitalist country but damn, I mean c'mon there are people starving and dying right here .

If we were smart years ago some type of earning cap should have been placed on all people.

I mean realisticly how many billionares other than Gates and Buffet would actually just give away their entire fortunes without a blink of an eye.
I applaud those guy and their wives and families.

Why do we pay dudes in tights millions a year to play with each others balls anywho?

I thought they enjoyed playing with each other.
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Thejesus
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Username: Thejesus

Post Number: 1092
Registered: 06-2006
Posted on Saturday, May 05, 2007 - 10:51 am: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

Wally2times:

Vote for the Green party if you want a cap on wages...

Just don't complain when all the talent in the country that keeps the economy moving runs off to countries that aren't stupid enough to set caps on wages...
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Wally2times
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Username: Wally2times

Post Number: 36
Registered: 03-2007
Posted on Saturday, May 05, 2007 - 11:00 am: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

Jesus,

I should have specified world wide. I know its a pipe dream. But it would be nice and level the playing field for all.

People might even be nicer.
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Durango
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Username: Durango

Post Number: 21
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Posted on Saturday, May 05, 2007 - 11:06 am: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

Wally2times:

It scares me when the thought of a wage cap is brought up. We all make choices in life in attempt to ensure as much as we can, to live the life of our desires. Some people decide to pursue higher education to hopefully attain a certain lifestyle. There are others who decide to go directly into the workforce. I don't understand how a person who has a higher education and is more qualified than another person should not have the opportunity to earn what the market is willing to pay. Just like the person in a factory who is wiling to work additional hours receives overtime wages for his/her additional effort.

I respect your opinion, I just don't understand it.
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Alan55
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Username: Alan55

Post Number: 101
Registered: 09-2005
Posted on Saturday, May 05, 2007 - 11:06 am: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

"Don't like it? Build your own wealth from business."

Exactly!! Just like Rick Wagoner did! (Uh, wait a minute, no, he golfed and barbequed his way to the top.) Well, like Bill Ford did!! (No...he was born into the money.)

Well, never mind...Ford, GM, and DC don't need to cut costs...

(Unless, we're talking about workers, then they need to slash pay and benefits to the bone...)

(Maybe there a qualified guy in Bangalore who will be CEO for $50,000 per year....)
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Wally2times
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Username: Wally2times

Post Number: 38
Registered: 03-2007
Posted on Saturday, May 05, 2007 - 11:14 am: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

Durango,

I meant a cap upwards of up to 250k per yr and it would be world wide for everyone and the economy would follow and lower prices world wide thus making it easier for all to be employed, have homes , not worry about where the next meal is coming from or how to pay their gas and electric.
Those qualified, doctors lawyers, judges scientists etc would be at the top of earning because of their special qualities while the rest of us earn a little less but yet can still live decent.
Like I said , I know it will never happen but the world can fix all hunger,poverty,homelessness if we just backpeddled a bit .

I know that greed will not allow it because Oprah and Bill have to have multiple mansions and planes and such .
God forbid Martha can't screw the little guys with insider trading anymore.
Oh and lord, please what would Bono do without being able to send his private jet to pick up his favorite baseball hat from the other side of the world.
Just thoughts, thats all.
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Durango
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Username: Durango

Post Number: 22
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Posted on Saturday, May 05, 2007 - 12:08 pm: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

Wally2times,

Thank you for the clarification. I enjoy understanding other people's opinions, it makes the world a better place when we can discuss ways to improve the current state of affairs. The sad part of the manufacturing industry, especially the auto industry, in America is that "the captains of industry" were so naive and arrogant for so long that we didn't think that the countries that were destroyed in WWII wouldn't rise from the ashes and compete with us. We ignored change and didn't change and we continue reward CEO's for poor results. I guess in some ways I am supporting your point of view.

Thanks for your reply.
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Sstashmoo
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Username: Sstashmoo

Post Number: 88
Registered: 02-2007
Posted on Saturday, May 05, 2007 - 12:27 pm: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

An American worker making 70 thousand a year and full benefits cannot compete with a Chinese worker making 4 thousand a year and no benefits.

Blaming corporate management, politicians at and below the state level is ridiculous.

The US needs to change it's trade policies before it's truthfully too late. Unfortunately, we'll have to be thrust into an economy worse than 1929 before many realize we need to do something. Until then the idiots will keep chanting "global economy"..
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Durango
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Username: Durango

Post Number: 23
Registered: 10-2006
Posted on Saturday, May 05, 2007 - 12:44 pm: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

Sstashmoo,

You are right that our international trade policies are broken for our goods. The broken trade policy is one of the many key pieces that have put us in the situation that we are in today.

Sstashmoo, I think comments warrants a new thread....
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Darwinism
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Username: Darwinism

Post Number: 637
Registered: 06-2005
Posted on Monday, May 07, 2007 - 12:40 am: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

How about hearing from someone who HAD ALREADY made his moolah ?

http://money.cnn.com/2007/05/0 5/news/newsmakers/buffett/inde x.htm

Those of you above who said Rick and Alan deserve the paychecks ... you must not live around here or affected by the industry whatsoever. For pete's sake, even Warren Buffet has a problem with CEO salaries.
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Huggybear
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Username: Huggybear

Post Number: 291
Registered: 08-2005
Posted on Monday, May 07, 2007 - 7:37 pm: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

quote:

The sad part of the manufacturing industry, especially the auto industry, in America is that "the captains of industry" were so naive and arrogant for so long that we didn't think that the countries that were destroyed in WWII wouldn't rise from the ashes and compete with us. We ignored change and didn't change and we continue reward CEO's for poor results. I guess in some ways I am supporting your point of view.

Hmm.

The U.S. government needed a strong Germany in Europe and a strong Japan in Asia to fight communism - so it deliberately encouraged their reindustrialization. Our government was never going to go to bat for American businesses on trade or currency issues because the overriding concern was making nice with our new allies. You can find a pretty good account in Iacocca's first book of how the government reacted to appeals by American industry to level the playing field.

You call it naivete or shortsightedness, but if you do, explain to the rest of us what U.S. corporations would have done (other than outsourcing) that would put them on a footing with countries that have strong industrial policies, non-tariff barriers, economic nationalism, low labor costs and strategic importance to the U.S. military?
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6nois
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Username: 6nois

Post Number: 201
Registered: 11-2006
Posted on Monday, May 07, 2007 - 8:04 pm: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

Caps are no good, if you can get someone to pay you millions then good for you.
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Durango
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Username: Durango

Post Number: 25
Registered: 10-2006
Posted on Monday, May 07, 2007 - 10:18 pm: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

Huggybear,

Quote:

"You call it naivete or shortsightedness, but if you do, explain to the rest of us what U.S. corporations would have done (other than outsourcing) that would put them on a footing with countries that have strong industrial policies, non-tariff barriers, economic nationalism, low labor costs and strategic importance to the U.S. military?"

I stand corrected to a degree. You make a very logical point that I neglected to look at with open-eyes, the trade policies of other countries versus ours.

I had to dust off my copy of Iacocca, it is hard to believe that book is over twenty years-old. Many of his points still ring true today, only the numbers aren't as good for us as they were then. He did reference the way that countries like Japan built their post WWII economic structure to protect themselves first, which was probably pretty similar to their culture at that time. Lee also says," But regardless of how the Japanese manufacturers were helped, they also deserve our respect and admiration. They've shown themselves to be prudent planners and engineers. They didn't sit back behind barriers, and grow fat."

Our economic situation at that time, cheap gas and an expanding economy after WWII on top the unbalanced trade policies didn't create demand for smaller vehicles in the U.S. The U.S. automakers didn't put effort into smaller cars at that time and we never recovered. In short, automakers should have done more to create more fuel efficient cars, they created muscle cars, which I love, but in their eyes a profitable market wasn't there to justify the effort.

That's why I enjoy this forum, I grow from other people's opinions and views.
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Ltdave
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Username: Ltdave

Post Number: 52
Registered: 09-2006
Posted on Tuesday, May 08, 2007 - 8:45 am: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

"""I meant a cap upwards of up to 250k per yr and it would be world wide for everyone and the economy would follow and lower prices world wide thus making it easier for all to be employed, have homes , not worry about where the next meal is coming from or how to pay their gas and electric.
Those qualified, doctors lawyers, judges scientists etc would be at the top of earning because of their special qualities while the rest of us earn a little less but yet can still live decent.
Like I said , I know it will never happen but the world can fix all hunger,poverty,homelessness if we just backpeddled a bit. """

thats called a workers paradise, or utopia or a socialist country. i am appalled at such a notion...

someone my local paper made a stupid comment about the Supremes getting a State funded car. something like this: "Boy, i wish I could get a State funded car. It must be nice." my comment on that is, if you want such a perk, they take your ass to college and get a degree. then apply for Law School. get accepted and earn a Law Degree. take and pass the BAR exam. practice law for several years and get your self elected to the local District or Circuit Court. then after you spend several years doing that run for the office of a Michigan Supreme Court Justice...

this "why do they deserve such and such" and "it must be nice to be GIVEN that" makes me puke. LIFE is not fair, its not EQUAL, its not the same for everyone. its not now, it never was and it wont be in the future. and another thing, it was never INTENDED to be any of those things...

do i have an issue with CEO or upper management pay? sure. when they get rewarded for SCREWING UP instead of punished...

david
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Bobj
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Username: Bobj

Post Number: 2092
Registered: 11-2003
Posted on Tuesday, May 08, 2007 - 8:52 am: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

I don't think paying an effective CEO a gazillion dollars is bad, when they do the job!

What bugs me are the packages they get when they are ineffective and get fired.
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Cambrian
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Username: Cambrian

Post Number: 1065
Registered: 08-2006
Posted on Tuesday, May 08, 2007 - 9:04 am: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

These guys haven't produced results. Results being profitable CONSECUTIVE quarters. There fore they should be canned, or paid what they're really worth. Jockeying around shares, and increasing a companies net cash by slashing jobs is not conducive to the long term health of said companies. If I'm hired to do a job and instead spew out excuses why I can't, how long do you think my boss would put up with it? DCX and the Jap companies are foreign, therefore are not required to state executive income. That needs to change to where any company doing business here that is publicly traded should be required to state what they pay these people. Fair is fair.
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The_nerd
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Username: The_nerd

Post Number: 430
Registered: 12-2003
Posted on Tuesday, May 08, 2007 - 4:26 pm: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

If you guys are complaining about public company CEO, then you'll really have a fit over what the private equity guys and hedge fund managers are getting.

Any of those will make Ricky's and Al's pay look like a K-Mart cashier (i.e. some fund managers took home 10 figures last year in profit).
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Terryh
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Username: Terryh

Post Number: 278
Registered: 11-2006
Posted on Tuesday, May 08, 2007 - 6:57 pm: ††Edit PostDelete Post†††Move Post (Moderator/Admin Only)

I don't believe that any company needs to pay an executive 400 times what workers make to put out a good product. Compare US executive compensation to top executives in Japan and other countries and there is a significant difference. It amazes me how many American workers are indifferent to or supportive of the greed and unfairness of American companies.

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