Joy, Joy, Joy, It’s Raining M*

The Drought Is Over (at Least for C.E.O.’s)

It’s clear that some men are smarter than others.  When I went to school you could tell who they were.  Some were quiet, some were bold.  I could tell they were better than me.  Now I have some handle on just how much better.

I’m an average joe with an income of less than $100,000/yr (I live in California) but I know who my betters are.  The best better is Philippe Dauman who equals 845 of me:  that is he makes $84,500,000/year.  I haven’t run into him at the supermarket yet but I’m sure he eats.

We have some things in common:  We don’t like to pay taxes.  I grumble inside but know my taxes pay for things like roads, schools, veteran’s benefits.  Things that make up our “commonwealth.”

I know I share in this “commonwealth” because I served in the army, Medicare paid for some medical procedures, I got some student assistance, had some mentoring from caring people in the work place, in fact, there are innumerable instances of benefit from this “commonwealth” that I have received.

I like to think that I could remain humble in the face of increased wealth but I have some minor insight into this.  When I was a younger man I was making $200,000 for a few years.

Those were the salad days of unrestrained hubris.  $200k isn’t really a lot of money (as this article shows) but it makes for a good test case.  The median income in the US is about $43,000 so I said “Whoaa, I’m worth any four people out there!”

Of course my testosterone fueled sense of self worth was all in my head.  Sort of like the building sense of omnipotence experienced by a lottery winner – or the exhilaration felt by a dope addict.  The reality was that my endocrine system feeding back into my self image of myself, feeding my sense of self worth and feeding in sense of worth diminution of others.

Hmmm, well this is interesting.  I imagine if I had been making a million a year I might have considered that those making less would have less of a claim to some of the good things in life.  But would I have had access to all of the good things in life were it not for all of those who made it possible for me to go to school, who paid for the libraries in which I lived for much of my youth?

Isn’t there a commonwealth inherited by us all that gets divided up in just and unjust ways?  Aren’t we obliged in some way to give back in kind the wealth we amass?

Apparently not according to some of the voices I hear in the street.  Some of these voices would have it that they shouldn’t pay for schools because they don’t have children, that they shouldn’t have to pay for public health care because they already have insurance and everyone should be responsible for their own health care.  We should not be required to care for our neighbor’s problems if we didn’t cause them.

The undercurrent is that this world is subject to some kind of Darwinian selection where those who are improvident should be considered expendable.  Not all who play can be winners, but this can’t be blamed on me.  Interesting. – carlos

Raining M*NEY!

By DANIEL COSTELLO, Published: April 9, 2011

HAPPY days are back — in the corner office, at least.
In just nine months, Philippe Dauman of Viacom was paid $84.5 million, more than any other C.E.O. made all year. After shrinking during the 2008-9 recession, paychecks for top American executives are growing again — in many cases, significantly so.

Rarely has the view from the corner office seemed so at odds with the view from the street corner. At a time when millions of Americans are trying to hang on to homes and millions more are trying to hang on to jobs, the chief executives of major corporations like 3MGeneral Electric and Cisco Systems are making as much today as they were before the recession hit. Indeed, some are making even more.

The disparity is especially stark as companies are swimming in cash. In the fourth quarter, profits at American businesses were up an astounding 29.2 percent, the fastest growth in more than 60 years. Collectively, American corporations logged profits at an annual rate of $1.678 trillion.

So far, this recovery has not trickled down. After two relatively lean years, C.E.O.’s in finance, technology, energy and beyond are pulling down multimillion-dollar paychecks. What many of these executives aren’t doing, however, is hiring. Unemployment, although down from its peak, stood at 8.8 percent in March. And few economists predict the jobless rate will drop substantially anytime soon.

For the average C.E.O., however, the good times have returned. The median pay for top executives at 200 major companies was $9.6 million last year. That was a 12 percent increase over 2009, according to a study conducted for The New York Times by Equilar, a compensation consulting firm based in Redwood City, Calif.

Many if not most of the corporations run by these executives are doing better than they were in the downturn. Many businesses were hit so hard by the recession that even small improvements in sales and profits look good by comparison. But C.E.O. pay is also on the rise again at companies like Capital One andGoldman Sachs, which survived the economic storm with the help of all those taxpayer-financed bailouts.

Against such a backdrop, it’s noteworthy that recent moves to empower shareholders seem to have done little to tamp down corporate enthusiasm for paying top dollar to top executives. This is generally the season when companies hold annual meetings for their shareholders.

Under new rules included in the Dodd-Frank financial regulations, nearly all public companies must now give shareholders a say on executive pay. Analysts and corporate governance experts are wondering how these votes will play out, even though companies are under no obligation to heed their shareholders’ advice.

“What’s funny about pay is that when the market is going up, it covers a lot of sins,” said David F. Larcker, director of the corporate governance research program at the Stanford Business School. It is when the market “is going sideways or down that funny things happen,” he said: “Considering some of the current pay packages, shareholders want to see strong results.”

On this year’s list, the highest-paid C.E.O. was Philippe P. Dauman of Viacom, who made $84.5 million in just nine months. (Viacom changed its fiscal year-end to September from December.)  Viacom has said that the compensation was inflated by one-time stock awards linked to a long-term contract signed last year.

Also at the top was Ray R. Irani, the C.E.O. of Occidental Petroleum, who took home $76.1 million last year, up 142 percent from the previous one. Last year, the board awarded Mr. Irani a $33 million cash bonus plus $40.3 million in stock awards, more than double what he received in 2009.

Mr. Irani is retiring this year, and Occidental has said that it has set higher hurdles that will significantly reduce executive pay packages.

Lawrence J. Ellison of Oracle, the software giant, followed close behind, with a $70.1 million payout, though that is down 17 percent from 2009. Still, Mr. Ellison’s fortunes are just fine: he had more than $26.3 billion in stock and other holdings in Oracle in 2010.

UNLIKE some previous years, 2010 registered broad gains in executive pay, benefiting C.E.O.’s from nearly all parts of the economy.

Many consumer products companies also offered rich pay packages, including one for John F. Lundgren, chief executive of Stanley Black & Decker, whose pay rose 253 percent, to $32.57 million, after a huge stock award. His counterpart at Emerson Electric, David N. Farr, saw his pay rise 233 percent, to $22.9 million, also because he was granted millions in stock.

Most executive compensation plans consist of stock options that ballooned as markets recovered after the financial crisis. Although executives typically have to wait several years before cashing in new options, the booming stock market still meant that those options were a bonanza for many chiefs, said Bruce H. Goldfarb, a compensation consultant based in New York.

The chief executive of Ford MotorAlan R. Mulally, made $26.5 million in total pay, up 48 percent over the previous year as a result of big stock option awards.Ford was the only one of Detroit’s Big Three automakers that did not receive a government bailout, and its stock value rose 68 percent last year.

New government regulations put in place after the financial crisis have emboldened some activist shareholders to try again to rein in compensation they deem excessive and undeserved. Although companies will not be bound by such votes, they will have to disclose the results in reports filed with the Securities and Exchange Commission, as well as how they considered the voting in setting subsequent executive pay.

Still, it remains to be seen whether these changes have any teeth. For “say on pay” votes, there is no standard for what percentage of shareholder votes constitutes an endorsement or a rebuttal of policies. Even the prospect of the public votes, though, appears to have altered the relationship between investors and corporate executives on many discussions in recent months.

“I’ve been in two client meetings a week for the past four months to help determine this year’s compensation plans,” said Ira T. Kay, a managing partner at Pay Governance, a compensation consulting firm in New York. “While companies are making many tactical decisions about what to pay executives, it’s all being done in the context of trying to make sure they get a favorable vote on say on pay.”

For the full scandalous story see NY Times…

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About carlos

I'm a curious person, of reasonable intellect, "on the beach" (retired) and enjoying my interest in anthropology, language, civil rights, and a few other areas. I've been a hippie/student/aerospace tech writer in the '60s, a witness to the Portuguese revolution in the ‘70s, a defense test engineer and witness to the Guatemalan genocide in the '80s, and a network engineer for an ISP in the '90s. Now I’m a student and commentator until my time is up. I've spent time under the spell of the Mesoamerican pyramids and the sweet sound of the Portuguese language. I've lived in Europe, traveled in Brazil, Central America, Iceland, New Zealand, and other places. My preferred mode of travel is with a backpack and I eat (almost) anything local. Somehow, many of the countries I have been to have had civil unrest (for which I was not responsible). I'm open to correspond with anyone who might share my liberal, humanist interests. I live in San Buenaventura, California.
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2 Responses to Joy, Joy, Joy, It’s Raining M*

  1. peakers82 says:

    That’s crazy. I know CEO’s make a lot of money, but wow. This is what angers me when republicans say we can’t raise taxes on the rich. Some of these guys make the same amount of money it takes to fund government programs. You could feed the homeless if you taxed them 10% more. I just don’t get it.

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