Study: Most prefer wealth distribution similar to Sweden

SS109 wrote: Hedge fund managers? People choose to pay them by investing in their hedge funds. Think their fees or compensation is too high, you are free to go elsewhere and not pay him.

Care to point out one where the manager makes significantly less than the typical? This is practically a monopoly, if this industry didn't have so much power they would have been investigated years ago for anti-trust violations and price-fixing.

Lower executive pay in other countries? I talked to a French executive about this and he says the taxes are so high on large incomes and the public backlash is so severe that they pay themselves an OK salary and pay themselves in excess in other ways, like their housing and transportation is paid for by the corporation.

Compensation packages are compared not just for salary but for full total compensation. American execs play games with taxes, too, which is why so often such a big percentage of their packages are in the form of stock options, etc. No, when you compare total packages American execs compensation is STILL way, way out of line with what is paid to top execs in other countries.

Rockdoc Franz wrote:

AspenValley wrote:

Rockdoc Franz wrote:

AspenValley wrote:

Nmysys wrote: We choose the fields we want to work in, and they are not always for the $$$. Medicine, and teaching are honorable professions, though not always the same remuneration. The problem with this wealth distribution you speak of is that it relies on stealing from those who have it, no matter how you look at it.

Let's face facts, the person is rare who will not take something for nothing!

No, it doesn't depend on "stealing from those who have it". In other countries, top earning executives are paid salaries that are much closer to the average middle-managers salary than they are here. No one is suggesting we tax high salaries more to make things more "equal", just questioning why other first world countries seem to get along just fine paying their executives and financial managers more reasonable salaries.

All of you keep thinking this is about taxation, it isn't. It's about a situation that has developed rather recently in this country where there appears to be some kind of rigged game for those at the very top, paying themselves salaries unheard of even a decade or two ago. I know they say it is because they have to have "top talent" in order to compete in the world economy. So what are German executives, bottom and crappy talent? They seem to be competing just fine and their execs make a fraction of what they do here. I don't buy this story that these guys are somehow "worth it". They are just in a position to give themselves insane raises and bonuses and perks, so they DO. Some of it paid for by taxpayer bailouts, I might add!

Seems to me that if anything, these obscene "compensation packages" are making us LESS competitive, not more, as the money has to come from somewhere. And i suspect it is coming from squeezing the benefits and salaries of the poor peons below them.

As always, you make good points. Yes, I did read that you are not for equal but for compensation packages that fall under the main part of a bell shaped curve. I suppose I'm with you on the extreme deviations. What I do not know is where extreme for a particular discipline begins or ends. And what about wealth accumulation through successful enterprise, say a google or fb? Do we subjugate them as well? If so would that not blunt the drive to succeed?

I have nothing against an individual inventing a google and profiting proportionately. What I have a problem with is that there seems to have developed a class of what I would consider parasitic frauds at the very top who make their livings not through innovation or providing any value but through looting in ways like bundling toxic securities, selling them to their clients, and then SHORTING THEIR OWN CLIENTS on the investment, and turning around when the whole thing goes sour and holding up the taxpayers of the United States of America with threats of destroying the whole economy if we don't make good on their debts.

Or a small gang of good old boys who float from the CEO-ship of one corporation to another, sitting on corporate boards, voting their cronies ever larger "compensation packages" with the serene assurance that no one will be able to stop them, so long as they slash and hack and produce impressive short-term results for the shareholders. Or actually, these days, even if they DON'T.

None of this is captialism, none of this is sound market economy principles, this is out and out CRIMINAL FRAUD, and no one, not ONE of these people is being prosecuted. It's pretty darned obvious that the fix is on, the organized crime has become institutional, and it's too late to do a damned thing about it other than to try to stand the hell ouf of the way when the whole stinking mess comes crashing down.

I could go on, but I'm guessing you've got the picture....

Certainly, when you paint the scenarios as you have, but does that truly represent the general condition? I do not doubt such things happen and perhaps too often and those good old boys should be caught. Does it constitute the general situation in companies? The the point made by SS109 with regard to French execs, highlights alternative avenues that do not show up as compensation thereby skewing the more even distribution being sought. And what about athlete compensation? Talk about being totally out of whack. But, how do you curtail competitive bidding for services? Do you put ceilings on income?

I actually think a better case can be made for the huge salaries paid to atheletes than the huge salaries paid to most top executives. Because atheletic performance is directly tied to performance. No team is going to pay a huge salary to a guy who isn't delivering the performance that drives ticket sales, etc.

On the other hand, you can't tell me that executive pay is, because even when these guys totally destroy corporations they STILL pay themselves insane amounts. This isn't a matter of putting ceilings on incomes, I think it's a matter of accountability. Since the vast majority of corporate stock is owned by large institutional groups, most of whom are in the same "club" as the CEOs, like hedge funds, there is very little accountability from the shareholders. And since the performance of individual companies is often masked by being stuffed into a mutual fund or other blended security, there seems to be little in the form of consequences for poor corporate performance. Add to that the fact that the stock market itself is clearly being manipulated, and there is almost a perfect storm situation for the guys at the top to get away with what amounts to high-level larceny.

Too big to fail? I think these financial manipulators have gotten too big to be allowed to exist.

AspenValley wrote:

SS109 wrote: Hedge fund managers? People choose to pay them by investing in their hedge funds. Think their fees or compensation is too high, you are free to go elsewhere and not pay him.

Care to point out one where the manager makes significantly less than the typical? This is practically a monopoly, if this industry didn't have so much power they would have been investigated years ago for anti-trust violations and price-fixing.

Lower executive pay in other countries? I talked to a French executive about this and he says the taxes are so high on large incomes and the public backlash is so severe that they pay themselves an OK salary and pay themselves in excess in other ways, like their housing and transportation is paid for by the corporation.

Compensation packages are compared not just for salary but for full total compensation. American execs play games with taxes, too, which is why so often such a big percentage of their packages are in the form of stock options, etc. No, when you compare total packages American execs compensation is STILL way, way out of line with what is paid to top execs in other countries.

AV,
I don't think you understand what a hedge fund is. There are few, if any, barriers to you or I setting up a hedge fund. So a new hedge fund with much lower manager compensation will always be an option, even if most investors follow the herd of buying into the hedge funds that gave the best results last quarter or last year.

And I think long term stock options are a great from of executive compensation. If you, as CEO, send the company into a nose dive and stock falls from $75 to $55, your stock options granted at $75 are totally worthless.
My company issues stock options to all our employees because when we started up, cash was short so in exchange for less pay, you got a chance to score much higher gains. Due to this, some rank & file employees have earned more in a year off stock options than their regular pay packets as the company has grown. Of course, there have also been lean years where my stock options granted were worthless for a couple years until the stock rebounded.

I understand what a hedge fund is. And I also understand that if you don't have a nice set of insiders ready to invest in it, your hypothetical hedge fund won't get off the ground. Research who the players are, and you will quickly find it is pretty much a closed country club.

Regarding executive compensation - I don't have a problem with stock options as compensation, I was merely pointing out that France is hardly unique in paying large portions of their executive compensation in less highly taxable forms than cash.

And I do believe executive compensation in the US is out of whack. The boards aren't doing their jobs and trying to keep executive compensation at reasonable levels so that the stockholder gets more money. Too often, they like to make a big play hiring a CEO superstar from another industry and not finding out till 5 years down the road that it was a bad choice. Sort of like college football coaches. Just because he turned W.R. Grace around, doesn't mean he can fix Conoco/Phillips.

But one side note about executive compensation, some of these corporations are just so huge, that while executive salaries are very high, as a percent of costs, they are less than one percent. One possible reason why Euro compensation is smaller, most of thier corporations tend to be smaller.

Goldman Sachs comes to mind in terms of manipulation and egotistical justifications.

Executive compensation perhaps ought to be tied to reasonable stock options. At least that way there is a tie to performance, that otherwise is hard to measure. I might wish to quibble with you over the athlete compensation though. While a performance link exists, the compensation is driven by our lust for competitive games. We simply place a much greater value on entertainment than on performance that actually benefits mankind as a whole. I'd love to see a correspondingly high value place on educators and other professional groups.

Rockdoc Franz wrote: Goldman Sachs comes to mind in terms of manipulation and egotistical justifications.

Executive compensation perhaps ought to be tied to reasonable stock options. At least that way there is a tie to performance, that otherwise is hard to measure. I might wish to quibble with you over the athlete compensation though. While a performance link exists, the compensation is driven by our lust for competitive games. We simply place a much greater value on entertainment than on performance that actually benefits mankind as a whole. I'd love to see a correspondingly high value place on educators and other professional groups.

You do see some college education superstars actively recruited & get big contracts, but more the big researchers or the Nobel Prize winners.

And some college presidents are treated the same way, Gordon Gee, formerly of CU is a good example.

SS109 wrote:

Rockdoc Franz wrote: Goldman Sachs comes to mind in terms of manipulation and egotistical justifications.

Executive compensation perhaps ought to be tied to reasonable stock options. At least that way there is a tie to performance, that otherwise is hard to measure. I might wish to quibble with you over the athlete compensation though. While a performance link exists, the compensation is driven by our lust for competitive games. We simply place a much greater value on entertainment than on performance that actually benefits mankind as a whole. I'd love to see a correspondingly high value place on educators and other professional groups.

You do see some college education superstars actively recruited & get big contracts, but more the big researchers or the Nobel Prize winners.

And some college presidents are treated the same way, Gordon Gee, formerly of CU is a good example.

These are the exceptions are they not? I'm glad to see movement there, but let's face it. If you took a run of the mill professional ball player and a run of the mill educator, there is no comparison in terms of compensation. One can argue that a ballplayer's career is short, but does that mean they only need to work a small part of their lives to make all the money a professional non-ballplayer does not even make over a full working lifetime? Not in my book because 1) I value education more than athletic prowess and 2) I believe ball players need to think beyond their playing years, like some of them do (Carl Eller being in the news lately is an example).

Rockdoc Franz wrote: I might wish to quibble with you over the athlete compensation though. While a performance link exists, the compensation is driven by our lust for competitive games. We simply place a much greater value on entertainment than on performance that actually benefits mankind as a whole. I'd love to see a correspondingly high value place on educators and other professional groups.

I can't argue that our time and money would be better spent than in paying tribute to sports stars, but so long as we do, the salaries seem economically justified.

SS109 wrote: And I do believe executive compensation in the US is out of whack. The boards aren't doing their jobs and trying to keep executive compensation at reasonable levels so that the stockholder gets more money.

You nailed a big part of where the problem lies. The people that sit on the boards are all part of the same group. The CEO of one company sits on the board of another company whose CEO sits on yet another. They all vote for ever higher compensation packages for each other because they know the guy they're voting it for may be sitting on THEIR board next year. It's a good-old-boy network at best, an incestuous conspiracy at worst.