[extropy-chat] You're Fired

The Avantguardian avantguardian2020 at yahoo.com
Tue Oct 17 05:46:45 UTC 2006

 --- BillK <pharos at gmail.com> wrote:
> >> Some directors will be lucky to be in the right
> >> place at the right
> >> time and some won't.  There are only a very few
> >> directors whose
> >> decisions have much effect on company
> performance.
> >> Usually in new,
> >> fast-moving sectors where rapid change is
> paramount.

> On Oct 16, 2006, at 11:38 AM, The Avantguardian
> wrote:
> >
> > If you are right and that is the case, then there
> is
> > no justification whatsoever to huge CEO salaries.
> Cap
> > their salaries at ten times the salary of the
> average
> > employee and use the savings to pay the
> shareholders
> > dividends.

--- "J. Andrew Rogers" <andrew at ceruleansystems.com>
> This type of populist thinking is naive and wrong. 
> If this was  
> really true, the shareholders already have the power
> to do it.

The shareholders or the majority share holders?
> The kind of CEO that gets paid $10 million is also
> the kind of CEO  
> that immediately adds $1 billion in value to a
> company, making it one  
> of the best investments a shareholder can make. 

Value or price?

> Only a fool would  
> think this is a bad deal for the shareholder.  If
> paying the mail boy  
> a ton of money had the same ROI, the shareholders
> would be all over  
> that too.

What do you consider ROI? Net profit or more market
capitalization from hopeful investors who want to buy
into Job's next big project?

> As a point of fact, most CEOs do not make
> all that much  
> money and they have to put up with hours, risks, and
> other crap no  
> ordinary employee has to.

Those are the CEOs that are actually earning their
salaries. If those particular CEOs make more than 10
times the average employee of their company and didn't
actually FOUND the company, I will be happy to
reconsider my salary cap. (I consider CEOs that
actually started the company has a whole different
breed ... owners in fact)

> Not surprisingly, in a
> free market a good  
> CEO is usually worth to shareholders what they are
> paid whether you  
> recognize it or not, anecdotes notwithstanding.

In the ideal mathematical nirvana known as the free
market, I agree. In the real world, "caveat emptor"

> A somewhat relevant tangent is that until the Bush
> tax cuts, the tax  
> code made this kind of indirect investment in
> high-value CEOs one of  
> the best ways of returning value to shareholders.

The shareholders or the majority shareholders?
> Now that old- 
> fashioned dividends are (for the moment) a
> moderately good (but not  
> great) vehicle for returning value to shareholders,
> it will mitigate  
> some of the creative ways in which shareholders try
> to maximize their  
> profit.

Yeah I know. If I could somehow earn my keep by
collecting stock divedends instead of working. It
would be like not having to pay taxes. How cool is

>  Much of what people dislike about how money
> is shuffled  
> around and allocated at companies is a direct result
> of stupid  
> taxation policies and regulations and the investor
> market responding  
> to said stupid taxation policies and regulations. 
> The government  
> created this environment for the most part, not the
> companies.

But Andrew, isn't the government simply composed of
the mouthpieces of those industries and non-profits
with most successful spin-doctoring in a given
election cycle? Who are you going to vote for come
November? Big tobacco or the Sierra Club? The National
Rifleman's Association or the entertainment industry?
The "Don't Nuke the Whales Foundation" or "U-boat
Veterans for Deficit Spending?"

Corporations (in a broad sense) are the government.
And which ever ones gain the high ground and are able
to lob grenades onto their opponents every four to
eight years don't seem to have much to offer the
average voter. Yet amazingly, any two of even the
least-informed voters seems to have the most
deap-seated political convictions. Convictions that
demand loyalty to idealogies that have long ago ceased
to have any of but the most token of meanings to the
political parties that supposedly espouse them.

Thus we live in an age where republicans try to drown
the government in a bathtub by creating gigantic new
bureaucracies in the name of combatting the "phantom
menace". And the democrats support legislation
endorsing the creation of what amounts to
concentration camps for the undesirables without very
clearly defining who those are. All supposedly in the
name of "business as usual".

Stuart LaForge
alt email: stuart"AT"ucla.edu

"More persons, on the whole, are humbugged by believing in nothing, than by believing too much."

- P. T. Barnum

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