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Are executives paid too much???

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spartn

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My answer is ‘NO’
I’ve just been reading a few comments about what people think about the pay package of the Macquarie Ceo Allan Moss's $33.5 million dollar pay package.

And I continually read comment after comment of 'Greed' this and 'Greed' that. One thing i have realised when I started out investing, "Correct me if im wrong", is that a massive percentage of most public companies ceo's salary’s is from stock options and share grants.

Ive seen this written a few times, such as were the Yahoo executives in the state's decided to take a $1.00 salary, for better share option and stock bonuses, Bill Gates is the richiest man inn the world but only get's $970,000 (US) a year as a cash salary, but looking at this a seriously doubt he needs, the best thing about the link below is that 95% of that money is going to carity, "good on him".

http://finance.yahoo.com/q/it?s=MSFT

And on top of that, Australia companies paid nearly $70 Billion aussie dollars in tax last year, (Personal tax i think was around $120 billion.) and that's just the companies, not small businesses where the tax goes to personal income not company tax, and on top of that the fringe benefit's taxes which was probably close to another $5 billion.

I personally just don't see why big company executives, don’t deserve there massive pay packages, after the taxes, they and the companies they are in charge of put so much into the economy, which I think makes a big difference to the tax cuts we get all the time.

I just wanted to see what you guy's and girl's thought about this issue.

SPARTN

:viking:
 
Re: Are Executive Paid Too Much???


Macquarie Bank's executives are overpaid to say the least. IMO it just comes down to sheer greed. Executive salaries are generally going through the roof, often at the expense of shareholders. Yet, the same executives often call for wage restraint for the wider community. Double standards no doubt.
 
Re: Are Executive Paid Too Much???

Moss's annual income does seem enormous, but as I understand it, it's made up of a basic salary plus bonuses, and this arrangement applies to most of MBL's staff. i.e. they don't get the big bucks if they don't turn in the results.
And Macquarie does turn in the results.

I have a problem with executive staff being paid megabucks when they don't achieve results, i.e. Coles, or various other CEO's who have failed, then left with huge payouts, but for Allan Moss as an example, I am - as a shareholder- entirely happy for him to earn what he does, as long as he generates the sort of results which brings the benefits to shareholders.

How about considering the alternative in the case of MBL. Say you offer a bloke like Moss an "average" salary. Do you think he's going to stick around and say, oh well, all right then, I will still put in the effort to achieve the results? I doubt it. He'd be off overseas to where he can get what someone else will quickly be prepared to pay him.
 
Re: Are Executive Paid Too Much???

Why is it greed?
Extraordinary results justify, indeed demand, extraordinary rewards. How wonderful it would be if every CEO of the companies that I am invested in turned in similar results and received similar rewards!

The one reservation that I do have is the amount of super they collect, which in this case would amount to some three and a half million dollars. I think that the compulsory super paid by the employers should be reduced on salaries starting at $500k, and eliminated at $1 million.

I only hope that they pay fully their tax obligations.

I have a problem with executive staff being paid megabucks when they don't achieve results, i.e. Coles, or various other CEO's who have failed, then left with huge payouts, but for Allan Moss as an example, I am - as a shareholder- entirely happy for him to earn what he does, as long as he generates the sort of results which brings the benefits to shareholders.

100% with you, Julia.

anon
 
Re: Are Executive Paid Too Much???

I think some are paid way too much, particularly when some companies do very poorly.

Telstra was one fine example when the share priced dropped massively and the CEO's was paid very hansomely.

Here is another example...

Look at the salary of David Brown, 'ex CEO of LVL. Pay packet was $300,000, and what did he do for shareholders, nothing but ran the company into the ground. He was then asked to take a pay cut of $150,000. Still way too much in anyones languge, then he was booted.

So...while many millions of workers slave away on very, very average wages and give 110% to companies to make their bottom lines look better, their CEO's cream the system with these massive pay packet. Whether they are justified or not is another question...I think not.
 
Re: Are Executive Paid Too Much???


How much is too much?

Too much is when branches close, too much is when O.T. is cut, too much is when staff numbers are cut, too much is when work is contracted out.

Lining the fat cats pockets with millions of dollars when the workers on the floor -- the ones that provide the best service, the best advice, the best attitude, the best skills and the commitment to their position (not wholly money related) get shafted for these bonus incentives to be met.

Like I said in a similar thread, over $10 m what more could you want out of life, even $5 m.Give the spare dollars to the people on the floor.
 
Re: Are Executive Paid Too Much???

Yes.

The money could go back into society or back into the businesses themselves before they end up in trouble.
 
Re: Are Executive Paid Too Much???

Wysiwyg said:
Give the spare dollars to the people on the floor.
Click to expand...

Or

How about if the people on the floor earn it, then they can share in the bonus.

Employees and executives both need to EARN thier pay, not be given it.

How about a bonus for employees and executives based on performance in this order:

1.) safest workplace
2.) highest quality
3.) most innovation
4.) lowest cost

Cheers,
 
Re: Are Executive Paid Too Much???

Anon,
the maximum super base above which an employer is not required to contribute the minimum 9% is 140,960 in 2006/07. note that they may choose to pay the employee more if they want and pay it on salary above that amount.

with regards to the question I guess it is a matter of whether the person in question generated that much value to the business. i think there comes a point where you would have to argue that the salary was not commensurate with the end-value generated.

Adam
 
Re: Are Executive Paid Too Much???

Before any of you jump on the band wagon... have you guys worked on the "floor" I think u will find any mac employee, regardless of their position will be handsomely rewarded come bonus time, it will obviously vary with responsibility. But I can almost bet my winky that mac office girls wont be running to other jobs anytime soon, I'm sure they are well looked after ($$$)

Secondly, what people do not realize is that these ceo's are taking on an enormous amount of responsibility, they control you, the shareholders $$$. this alone deserves a premium above anybody else in the company. If they F&*k up, it is their reputation, not the CFO's or other senior execs that suffer. If they ruin a co, I seriously doubt job offers will be flying at them.
Remember these guys are not you run of the mill commerce grads. They put their whole name behind the credibility of the company.
 
Re: Are Executive Paid Too Much???


I agree with you 100%.
 
Re: Are Executive Paid Too Much???

Its easier to whinge about something and tell other people how much they should be making. Instead of putting in the effort themselves to boost their own income. I say good on him. You don’t like the comparison of your wage to his then do something about it without the wah wah.Last time I checked with the right effort anyone can get rich.
 
Re: Are Executive Paid Too Much???

grumpee boi said:
Anon,
the maximum super base above which an employer is not required to contribute the minimum 9% is 140,960 in 2006/07. note that they may choose to pay the employee more if they want and pay it on salary above that amount.

Adam
Click to expand...

Thank you Adam. I feel better now. You can see that unfortunately I had never reached such peaks.

When I was involved with the Independent Retirees I wrote a newsletter where I urged our top leadership to lobby the government about corporate thugs such as Ray Williams, who mismanaged HIH to extinction and still managed to siphon off millions of dollars into his wife's account. That is raw naked greed which doesn't carry the legal punishment that it deserves.

anon
 
Re: Are Executive Paid Too Much???

Hi Julia,

Yes, exectives should be well rewarded, no arguments there. But Macquarie Bank's executive salaries are way over the top. Even Mr Howard reckons, as a private citizen, that its a huge amount. Its very hypocritical for the same executives to be call for wage restraint, yet increasing their own wages by ridiculous amounts. IMO its all about balance.
 
Re: Are Executive Paid Too Much???


Hi Greggy,

I absolutely understand how you feel. However, the reality is if we want a company to be as successful as MBL, then we have to pay the going rate for that level of management.

The share price for MBL in the last five years has gone from about $26 - $97.

The share price for SUN in the last five years has gone from about $12 - $21.

The share price for WES in the last five years has gone from about $28 - $38.

The old cliche: you get what you pay for.

Cheers
Julia
 
Re: Are Executive Paid Too Much???


Hi Julia,

Macquarie Bank has had a stellar run and I'm glad that you've done very well out of it. However, being the stubborn bugger that I am, I still maintain my previous position. Its not often one acknowledges how other people and its refreshing to see, but then I know for a fact that you've got a good heart.

Regards,

Greggy
 
Codswallop!

Julia said:
you get what you pay for.
Click to expand...

Codswallop!

So, those CEO's that stuffed up shareholders value and walk away with huge salaries are giving what the shareholders want??? I don't think so, and there are numerous examples of this in recent times.

It is about greed and self gratification!

Given the opportunity, would you ask to have your pay reduced if you were appointed to any job? The answer is no, because we are self gratifying individuals. We all play the market to increase our wealth from others works. We are not exactly doing anything masterful! After all, given the opportunity to buy a share at a price we know will grow and give huge dividends.. (aka insider trading) are we going to say, "oh no, better do the right thing an pick an average stock" We are the same as they are.. just most would not admitt to it.

The only way we would ever really know if those individuals were truelly worth those huge salaries, would be to replace them. I would love to see a major CEO replaced with someone who has some business sense, but more importantly passion about the organisation and do it for the same pay as the average manager. It's like Branson said, he'll take passion over education anytime.
 
Re: Are Executive Paid Too Much???

Without a doubt, the top rail has been extended from the bottom rail.
 
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