Slashdot Mirror
Expose on Insider Loans
Ctimes2 writes "Everyone's been grousing a lot lately about high priced CEO's and compensation packages, in no small part due to the 'Enron incident'. Business2.0 has a lengthy but enjoyable feature about how corporate loans became 'compensation packages', forgivable, sometimes tax free the and norm for corporations. And Slashdot's favorite whipping boy Microsoft, while not leading the pack, certainly isn't the poster child for trustworthy finance. More importantly (or rather, to our eternal annoyance), the article provides some much needed information trolls can add to their 'CEO's are bad!' rants: "Insider lending added thrust to the long surge in executive pay that has pushed the average major-company CEO's compensation from 45 times that of the average worker in the early 1970s to about 500 times worker pay today.""
Seriously, what exactly does the CEO do anyway that makes him worth so much?
I'll bite.
I'm one. Of a considerably smaller ship, but one nontheless (I provide broadband to about eight counties in a "fly over country" state and run a regional network for voice, IP and private line).
I created my company. Worked my ass off for several years living in a crappy part of town in a small house. Leveraged everything. Risked everything. Signed on the line for every loan, pledged my house, farm and income for years to come to make it happen. Worked for 12 months with no fscking paycheck (actually, you get to pay to play in this club... attorneys, accountants, routers, systems, offices all cost bucks. Guess where it comes from?)
While my geek friends were sneaking out at 4:30 on Friday to go drink and hit the hockey games, I was working till midnight and both weekend days. Vacation? 1998 was the last time I saw free time. Fund the company? Build routers? Climb towers? Carry out the trash? Whatever it took.
Meanwhile, my competition (incumbant/monopoly phone companies in small towns) was run by Junior (second or third generation or more of family-run operations). While Junior made a cushy income, drove his flashy car, golfed at the country club and enjoyed that nice $5 million company home in Vail, I froze my ass off on grain elevators and windmills at 4AM, making small town customers happy.
So now I'm taking Junior's business. Bringing broadband to his town. Making the people happy. Junior's been horrified, learning that my annoying, trivial little company is now taking his core business. He's yesterday. Obsolete. To Junior, I'm a barbarian, but to the community I'm a saint. Even Junior's senator hangs around my office for photo ops.
So why shouldn't I be paid for what I did? You want progress? Don't expect it from Junior. If you want it from me, it comes on my terms. If I get greedy (like the dot-com assholes who lost were in it only for the $10 million homes - learn about these losers and you'll see they're nothing but upper class daddy's boys anyways. They didn't earn it), then I'll join Junior and let some efficient young fsck replace me.
So, do you really want to eliminate my incentive? Sure hope you like Junior...
*scoove*
That's certainly a valid answer. You started with nothing and built up a great business, and you're entitled to whatever you can get out of it.
What I meant was, these companies that hire someone to come in and run the place - not create it, not stay up til 3 in the morning to keep it running, just make the decisions and collect stock options, like Junior - what do they do?
I'd be happy to hear that they're worth every penny of the money; I'm honestly curious.
BTW, somebody mod the parent +1 interesting..
Twenties Retirement
SEC's budget last year: $438 million
Budget under new law: $776 million
Budget after Bush cut: $568 million
So my question is, what does the SEC need so much money for?
$30 million / 100 new employees = $300,000 per new employee.
$438 million / 3,100 employees = $141,000 per employee.
$102 million / 3,100 employees = $33,000 raise per employee
$108 million / 3,100 employees = $35,000 per employee for computers and 'financing' to restore the agency after losing its New York offices.
Where is all of the SEC's money going?
It's not reported nearly enough that Bush Jr. (Jar Jar Bush) got his breaks through insider loans. The second article is worth reading through.
t m
http://www.american-reporter.com/1954/112.html
Another important provision included in the bill makes it illegal for corporate executives to receive loans from the company coffers. The President has acknowledged he received a loan from Harken in the late 1980s.
http://www.commondreams.org/headlines02/0712-06.h
In recent days, questions have resurfaced about the way Bush sold $848,000 worth of shares in Harken Energy Corp. just before the stock price slumped, and about Bush's delay in filing the required insider-trading report. The Harken deal helped Bush pay off the loan on his $606,000 investment in the Texas Rangers baseball team, for which he walked away with $14.9 million. In his defense, Bush has repeatedly noted that the Securities and Exchange Commission investigated possible insider trading but took no action against him. The investigation occurred during his father's administration. Bush's critics have sometimes joked - as they did of his father - that he was ''born on third base and thought he hit a triple.'' In fact, the full context of Bush's business dealings provides a somewhat different metaphor: This is the story of a man who struck out numerous times before being bailed out by big hitters who often were family members, friends, or supporters of his father.
__ Someday, but not this morning, I'll finally learn to use the preview button.
So, do you really want to eliminate my incentive? Sure hope you like Junior...
No one is arguing that a CEO shouldn't make MORE money than other workers at a company. The question is why they are being given absurdly high compensation packages compared to every other country in the world.
It's insiderism, it's a sleazy money grab; they know it's wrong, why else would boards of directors try to hide these compensation packages from their shareholders? See the Jack Welch of GE's compensation scandal for only the latest such example.
You worked your ass off. You took risks, you got rewarded. But you can bet Jack Welch didn't climb any poles or take out the trash. Unless the trash was in Tahiti and he took the company jet. Most CEOs of large companies get a big payday whether or not their companies do well. Tying compensation to stock prices was supposed to fix that; instead they figured out how to fix their own stock prices until they could cash out.