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Andrew Bathgate

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On average are the CEO's of the top 100 companies worth their salary?

In my experience many of the top CEO's seem to fall in to their positions by being well connected rather than being particularly talented. This does not apply to those that created their own company. They then manipulate their compensation to far outstrip what the market would set it at if it were working correctly.

Topics: Compensation corruption inequality motivation
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  • Andrew Bathgate

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    Dec 1 2011: So many of these high flying CEO's drive their companies in to the ground and get massive severance packages. They act like entitled psychotics. One CEO of a company I worked at used to bring a live grenade in to board meetings. Another CEO I knew bought his friends worthless company for $440m then increased his compensation to deal with his new responsibilities.

    American Airlines, GM, Chrysler, BofA, Citigroup - All companies that paid their CEOs > $100m to destroy their companies. And the shareholders got screwed. Any company where the CEO is paid more than 10 times the average salary has been corrupted.

    Again I want to stress this does not include the folks who create their own company - Bill Gates, Steve Jobs, Larry Elison etc.

  • David Saia

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    Nov 28 2011: I understand that the history of America's development was more than the tax issue. As a student of history, I'd summarize it as an attempt to make our way without oversight and intervention. In short, it was a place where greed was unchecked, and not reserved for the wealthy.

    No matter how long the debate, I'll never agree that high taxes lead to greater achievement. At the same time the tax rates were high we began buying anything and everything- personal spending on products that are still in our land fills was high as well. It was when what we had became the measure of the person instead of what we are and who we are. That was when the rich got richer and the country produced a government of platitudes and of inattention to the needs of the poorest of us. It is also when we created lifeless public spaces and the shopping mall, and the individual was reduced to a cog in the wheel, culture and religion and family began tearing apart under the strain of expecting the government to be all things to all people. We rely too much on government, and vote for people wholly unable or unwilling the concern themselves with real life in America. They want only to be re-elected. We have lost our reliance on ourselves and the value of community. When half of what we earn goes to the government, there is no point in working, at least working for money.

    Andrew, we will, I suspect, never agree on these issues and should likely stop. As it's your thread, please feel free to have the last word.

    • Andrew Bathgate

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      Nov 29 2011: I believe the revolution was opportunism. I am glad that it happened, I dont think the USA would have done as well as part of the British empire which was far from a meritocracy. But as I said that is a long and complicated debate.

      Here are the FACTS about the top tax rate
      1918 ->top tax rate was 77% And the following decade was the roaring twenties
      1929->top tax rate reduced to 24% And the following decade was the depression
      There was negative growth in the USA until the year after top tax rates were increased to 63%
      From 1944-1963 Rates were over 90% and we had the golden age
      But in 1970 top tax rates were reduced from 77% to 70% and suddenly the USA got stagflation, we lost our first war (Vietnam), we could no longer go to the moon.
      Reagan dropped them again and we had a debt crisis.
      Bush Sr and Clinton raised the top tax rate and we got the booming 90s.
      Then Bush Jr reduced them and well... you know what happened.

      I rest my case.

      If I must provide the last word let it be shibboleth

  • David Saia

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    Nov 27 2011: Revolution against unrestrained taxation is what created this country, and we are right back where we were. No one- and I mean no one- can tell us where our money is going when we pay taxes, so it is without representation. Not to mention that our "representatives" have no awareness of the people they represent as they do not live among them. If everything is fine and dandy why do senators and congressmen have health insurance their own districts or state's populations cannot, for the most part, afford? Remember, the 1% don't want estate taxes and are content with the richest Americans paying the least taxes- just ask Warren Buffet who pays less taxes than his secretary. Face it- it is a dying system from an outdated philosophy of modernism. We must embrace the new post-modern age and free ourselves from our masters to decide how we want and need to live. Relax, it won't happen in our lifetimes, and certainly not here. At least we can agree to disagree, right?

    • Andrew Bathgate

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      Nov 27 2011: The causes of the revolution are not exactly what teachers say they were... but that's another debate and a long one.
      However I am not talking unrestrained taxation and certainly not taxation without representation.

      The USA's greatest growth in wealth and its greatest achievements were all when it had top tax rates of 90%. We beat the Nazis and became a super power and held off the commies and put a man on the moon when top tax rates were 90%. It was only in the 70s when we dropped our top tax rates that we suddenly found ourselves unable to achieve great things. We lost our first war, we could not go back to the moon, we began to slide.

      We have been fooled in to thinking that lower tax rates encourage growth but history shows exactly the opposite is true.

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    • Andrew Bathgate

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      Nov 27 2011: The problem is the hierarchical view of management. I have a team of experts and I hired a college grad to manage us. Our manager is not our superior she just tracks our task list, calendar and communications.

      There are maybe 0.1% of tech folks capable of doing the tasks my team does but 5% of the population can manage them. In the past managers insisted on more pay, privileges and then end up treating their team like inferiors. A sense of entitlement just grows within them.

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        • Andrew Bathgate

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          Nov 29 2011: Nice
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          Salim Solaiman 50+

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          Nov 29 2011: Hi Tony
          Sorry I am a bit confused after reading your two posts above.
          First you posted companies makes YES boss stupids (which in some cases right but defintely not for all) CEO & their high salary is to buy their loyalty.

          In second you have given some very practical & logical example and explanation which is contrary to your first one...... which one you actually stand for ?

          CEO salary is big point of debate these days.......but reality seems CEOs are rare breed , so supply demand situation pushing their salary sky rocketing.
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    anthony bruni 30+

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    Nov 27 2011: I do not think the argument should be whether they deserve their salary or not. Some do most don't The problem is it skews the economic landscape. Do they deserve their salary more than you deserve not to live as a surf. Will we be better off if we acknowledge that while some people do deserve more, others deserve a fair slice as well and we have to weigh theses needs.

    • Andrew Bathgate

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      Nov 27 2011: Yes, I believe inequity is a problem as well as corruption. But a healthy competition is good. What I hate is the obsequious deference to those born to money to such an extent that they are given positions they are not capable of. Then they get rewarded based on the strength of their connections rather than the strength of their work.

  • David Saia

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    Nov 26 2011: Andrew- I believe there is no compassionate capitalism. That's the problem. It is about getting more and eventually the most, for money having the extreme level of value it has in capitalism ultimately corrupts, first in small ways and then in huge, nation-bending ways. True innovators are not motivated by money exclusively- perhaps by work, or by invention, or by helping people, but if the goal is getting rich, or at least getting more money, then it will stop short of innovation. I agree that meritocracy has to win out to save the planet, but it will be hard to sell it to America after so many years of thinking competitively and motivated by the "me" and mine. It is an old "modernist" notion that has corrupted all who touch it. We used to have the idea that we were different from "undeveloped" nations and it was "right" to go in and show them how to improve their societies. Actual cultures will ultimately reject the help because the cost is too great- usually resulting in subordinating their uniqueness into a larger whole that is insensitive to their needs and lifestyles. We have to think in a community based way, not a national way, for nations as we understand them are an illusion of unity that feeds the corporate machine and are therefore promoted as real- at great expense. We are a collection of small communities and cultures- the melting pot did not work . . . . did it? That's just my opinion.

    • Andrew Bathgate

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      Nov 27 2011: I disagree. I think taxation can be used to keep the competition alive. Especially estate taxes. And those taxes pay for welfare which needs to be provided with intelligence as well as compassion.

      The natural end point of unrestrained capitalism is plutocracy.

  • David Saia

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    Nov 23 2011: They are the 1% that is radically out of touch with the rest of us. The question to me is how much is enough? Is there an amount of income we could be satisfied with? I think anyone who gets grossly overpaid as the example you described has no appreciation of the value of money- not that is is important, but that it is actually unimportant. One year of a salary like that can radically change our world if it was put back into the world. Yet we live in a country that values corporations as individuals- which is absurd- and whose leaders cannot even put aside political party affiliations to fix our broken economy. We simply live in a broken system with megalomanical leaders who represent no one but themselves and simply want to keep their jobs without doing their jobs. Like the fallacy of extending tax cuts for the rich because it will stimulate the economy- a fact that has never been proven by anyone. As long as the rich get theirs, screw the rest of us. 2012 will be a very interesting year when it all crashes and burns . . . .at least it seems to be heading that direction doesn't it?

    • Andrew Bathgate

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      Nov 26 2011: I am not against people being rich. Money as a motivator works which greases the wheels of the economy. I am not against capitalism, I am against the corruption of capitalism which stops innovation and wealth creation. We should strive for a meritocracy that is compassionate. That would allow us to pursue happiness effectively.

  • Andrew Bathgate

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    Nov 22 2011: As a lowly employee I was once granted an audience with the CEO for lunch. I presented him with a document detailing flaws in an upcoming product release but he refused to take it saying "Are you joking? Give it to your manager. Which I did. The product was released and the flaws destroyed the company.

    http://www.businessinsider.com/worst-ceos-ever-2009-6

    I once bought shares in a company and in that year they hired a new CEO gave him $700m then fired him. That year the company declared a loss of $300m.

    I have met many CEOs and have yet to meet a genius but I work side by side with genius every day.
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