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Paul DThu Feb-13-03 12:50 AM
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"Corporate Executive Greed"


  

          

A senior Australian bank executive resigned recently. Let me stress this. HE RESIGNED - he wasn't fired or pushed or made redundant, he resigned to go to a presumably better job. He took with him a severance pay of $32.75 MILLION.

I am 56 years old, and I currently earn $50,000 a year. I consider this a fair salary for what I do. If I spent my entire working life on my current salary I would have earnt $2.2m TOTAL. And if I resign of my own volition I would get accrued long service leave - nothing else.

For three years my wife worked for the same bank as this greedy bastard. She worked part-time - pretty well no-one below branch manager gets a full-time job in Australian banking any more. She spent three years copping abuse from the public over reduced services and ever more branches being closed, all of which were making the money that went to this man's payout, for the equivalent of $24,000 per year full time. She eventually resigned because the stress was too great. Her payout was $2,000 superannuation contributions, which she can't touch until retirement age, and one week's leave she was owed.

And this bank's share price has been dropping steadily for over two years.

Can some of you advocates of capitalism please explain to me exactly why all the above is fair and a good thing. I'm afraid it escapes me.




Paul D


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Paul D

  

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MrManThu Feb-13-03 01:42 AM
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#1. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 0)


  

          

Your wife could have quit any time she felt like it and pursue another line of work, but chose not to. You could have majored in business/engineering/computer science and gotten a fairly high-paying job, but chose not to. Heck, you could go to college now and come out 4 years later with such a degree, but you choose not to. The opportunities are there, you just have to use them.

  

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baloThu Feb-13-03 01:48 AM
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#2. "RE: Corporate Executive Greed"
In response to MrMan (Reply # 1)


          

It is neither fair nor an example of capitalism. It is based on pure greed of the individual and the comlicity of the corporation. Obviously, other expect the same thing so they support this type of "payout". Read Barbarians at the Gates.








http://www.bobbalogh.com/


  

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EthanThu Feb-13-03 01:57 AM
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#3. "RE: Corporate Executive Greed"
In response to MrMan (Reply # 1)


  

          

>Your wife could have quit any time she felt like it and
>pursue another line of work, but chose not to. You could
>have majored in business/engineering/computer science and
>gotten a fairly high-paying job, but chose not to. Heck, you
>could go to college now and come out 4 years later with such
>a degree, but you choose not to. The opportunities are
>there, you just have to use them.

Are you serious?

Ethan

Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.
"Why shouldn't the American people take half my money from me? I took it all from them." - Edward Filene

  

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MrManThu Feb-13-03 02:07 AM
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#4. "RE: Corporate Executive Greed"
In response to Ethan (Reply # 3)
Thu Feb-13-03 02:07 AM

  

          

If you can provide a rational refutation to those points, I'd like to hear it.

Oh, and this too:

http://www.capitalismcenter.org/Philosophy/FAQ/default.htm
" Question: Under capitalism, how can you justify the disproportionate rewards given to CEOs, who earn hundreds of times as much as their lowest-paid employees?

Answer: A recent study claimed that corporate CEOs make, on average, 400 times as much as the company's lowest-paid employee. Let us assume that this figure is correct. Is that really "disproportionate"?

Let us concretize the question. What kind of work is performed by the lowest paid worker in a company? This worker might be, for example, a janitor. His work consists of performing routine, pre-established tasks, requiring little thought and only moderate physical effort. If he performs his work well, there is a moderate benefit: a clean workplace is more productive than a dirty one. But if he performs his work poorly, the consequences are minor—and the worker can easily be replaced by a better janitor; since the skills required are not complex, almost anyone can perform the job properly.

In the case of a CEO, by contrast, his work consists primarily in making decisions—decisions about what products the company should produce, how much it should invest in improvement of its equipment, whether it should raise money through stocks or bonds, etc.

Bear in mind that wealth is not produced by blind, uncoordinated action. The best employees in the world working the longest hours are useless unless they are making a useful product backed by adequate funding and good marketing. Consider, as an example, the recent failure of the satellite telephone venture Iridium, a project with no shortage of brilliant engineers and rocket scientists—but without a realistic business plan.

But ensuring that a company's resources and personnel are being used productively is the job of the CEO.

In justice—if justice means rewarding merit—an employee ought to be paid in proportion to the value he brings to the company. By that criterion, is there anything "disproportionate" about paying the CEO an enormous salary? If there is, the disparity is in the other direction. A good CEO of a multi-billion-dollar company is not worth so little as 400 employees, much less 400 janitors; he is worth as much as thousands of employees. Their work is profitable only as long as he makes the right decisions.

Of course, a bad CEO—one who makes poor decisions and wastes a company's resources—can wipe out the work of thousands of employees. But that is precisely why companies offer their CEOs such enormous financial rewards, rewards that are often dependent on the company's performance. For such a crucial position, nothing less will attract and motivate the best minds."

  

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Paul DThu Feb-13-03 02:20 AM
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#6. "RE: Corporate Executive Greed"
In response to MrMan (Reply # 4)


  

          

And the norm is that bad CEOs, who as often as not are bad because they are dishonest, not incompetent, are usually smart enough to ensure that their employment contracts contain unbreakable payout clauses.



Paul D


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Paul D

  

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MrManThu Feb-13-03 02:37 AM
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#8. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 6)


  

          

And it's up to the prospective employees to read the contract and decide if they should agree to it or not. It's entirely their choice to agree to such conditions as payout clauses.

  

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Paul DFri Feb-14-03 03:38 AM
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#47. "RE: Corporate Executive Greed"
In response to MrMan (Reply # 8)


  

          

I was referring to the senior EOs payout clauses. And why wouldn't they sign them. They or their lawyers usually write them. Unlike the workers, who get no choice.



Paul D


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Paul D

  

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MrManFri Feb-14-03 04:06 AM
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#51. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 47)
Fri Feb-14-03 04:06 AM

  

          

Ah, I thought you were referring to hiding clauses in employee contracts.

Anyway, if I understand correctly, the board of directors is the what writes employement contracts, and they, as well as the shareholders, have the right to accept or deny any additions to that contract.

  

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Paul DFri Feb-14-03 04:27 AM
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#53. "RE: Corporate Executive Greed"
In response to MrMan (Reply # 51)


  

          

Correct - and it's the boards of directors that are ultimately responsible for this sorry state of affairs. Minor shareholders opinions don't count. They are factually powerless in most large companies.



Paul D


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Paul D

  

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hal9000Fri Feb-14-03 04:42 AM
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#55. "RE: Corporate Executive Greed"
In response to MrMan (Reply # 51)


          

Your vision and ability to understand is clouded by your own sense of inadequacy. You learn in order to feel superior towards others not to understand them. Don't acquire knowledge simply for the purpose of feeling superior, but rather to understand and see the truth. You have a rare and gifted talent, once you believe that in your heart, you won't let your ego lead you around by the nose.

  

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Paul DThu Feb-13-03 02:16 AM
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#5. "RE: Corporate Executive Greed"
In response to MrMan (Reply # 1)


  

          

You arrogant little A#@$hole. I am 56 years old. At the time I left school, university was not an option because my working-class parents could not afford it. There were no courses in computer science available - the subject didn't even exist. I have completed in my own time and at my own expense several IT courses, and now work in software systems support.
You continually tell me I know nothing about you, but believe me, you know less than nothing about me, my wife or conditions in Australia either now or when we were completing our education. You really need to get out of your ivory castle and into the real world.

Beside which, you've really missed the whole point of my post, which doesn't surprise me in the least. I wasn't complaining about my lot in life. I have a wife, three kids, two grandchildren, a nice home which I own outright and a job I enjoy at what I consider a fair rate of pay (as I said). The point is how can anyone justify being paid $32.75m for leaving a job. Not for doing a job, for leaving a job. Of his own free will.




Paul D


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Paul D

  

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MrManThu Feb-13-03 02:27 AM
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#7. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 5)
Thu Feb-13-03 02:30 AM

  

          

Geez, I was just trying to illustrate the freedom inherent in a capatalistic system. Anybody can go to college nowadays, seeing as there's plenty of companies willing to offer student loans and other services, if you're willing to do what's necessary. Thus, is does not involve any amount of assuming on my part for me to say you could get a high-paying job if you wanted to.

  

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oldgitThu Feb-13-03 02:44 AM
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#10. "RE: Corporate Executive Greed"
In response to MrMan (Reply # 7)


  

          

Paul, I'm with you all the way on this one, I know it's easy for us chaps of mature years (I'm 59) to say that youngster's don't know they're born, but in this case I will say just that. Circumstances in the late 50s early 60s was totally different to those of today, it was a hard disciplined world in which for the most part, ordinary folk had to comply, - they had no other option. To have had this sort of upbringing, and then see the sort of Fat Cat payouts that so many of these gangsters get away with makes me want to spit blood!
Sincerely,
Richard.

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Paul DThu Feb-13-03 02:49 AM
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#11. "RE: Corporate Executive Greed"
In response to MrMan (Reply # 7)
Thu Feb-13-03 02:51 AM

  

          

You're assuming that all your "choices" are available to everyone. In the real world that just doesn't happen, because everyone's life takes a different course, and one person's options aren't necessarily anothers.

But you're still missing the basic point (or more likely evading it. I think you're too smart to be missing it). I never at any stage complained about my lot in life. The figures I offered were purely for comparison. And the payment wasn't for doing his job, it was for not doing it.



Paul D


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Paul D

  

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MrManThu Feb-13-03 03:03 AM
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#13. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 11)


  

          

What I'm trying to show is that high-paying positions are available to anyone who's willing to work at it. Of course, some are afforded more favorable circumstances than others, however that doesn't refute the fact that opportunities are plentiful. And it is for that reason, as well the ones detailed in the quote above, that a CEO's large salary is fair.

  

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Paul DThu Feb-13-03 04:12 AM
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#14. "RE: Corporate Executive Greed"
In response to MrMan (Reply # 13)


  

          

Define plentiful.

In Australia less than 1% of salary earners make more than $200,000, and that's way below the numbers we're talking about here.




Paul D


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Paul D

  

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MrManThu Feb-13-03 05:05 AM
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#15. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 14)
Thu Feb-13-03 05:06 AM

  

          

.

  

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Paul DThu Feb-13-03 06:20 AM
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#17. "RE: Corporate Executive Greed"
In response to MrMan (Reply # 15)


  

          

All that tells me is that 6.2% of Australians are unable to get any work at all. It tells me nothing about what jobs are available in what pay scales. Incidentally, you only have to be working 10 hours a week to be counted as employed by Australian Government standards. The percentage of people who can't get as much work as they want is actually in the order of 15%.

I'm not going to argue with you any more. You are a snotty nosed little brat who has no life experience of his own and firmly believes that the answer to everything is on the Internet, and real life has no meaning. If I had the time and the inclination I could probably find stuff on the 'net to refute anything you post. Get a life away from your PC!

On reflection, you'll probably make a good CEO yourself some day. A good brain, strong on logic, and absolutely no empathy with your fellow man. So off you go and make your millions, and the best of luck to you.




Paul D


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Paul D

  

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MrManThu Feb-13-03 07:16 AM
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#25. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 17)


  

          

>All that tells me is that 6.2% of
>Australians are unable to get any work at all.

This can be blamed partly on the RBA's stubbornness in changing interest rates. Regardless, the resources are there, you just need to find them.

>It tells me
>nothing about what jobs are available in what pay scales.

I fail to see how this is relevant.

>Incidentally, you only have to be working 10 hours a week to
>be counted as employed by Australian Government standards.
>The percentage of people who can't get as much work as they
>want is actually in the order of 15%.

Prove this, please.

>I'm not going to argue with you any more. You are a snotty
>nosed little brat who has no life experience of his own and
>firmly believes that the answer to everything is on the
>Internet, and real life has no meaning. If I had the time
>and the inclination I could probably find stuff on the 'net
>to refute anything you post. Get a life away from your PC!

How characteristic of you to make several unfounded insults against your opponent and drop out of an argument so you won't be bothered to defend your losing position. Even if I am naive, at least I'm not a coward.

  

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Paul DFri Feb-14-03 03:41 AM
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#48. "RE: Corporate Executive Greed"
In response to MrMan (Reply # 7)


  

          

"Anybody can go to college nowadays..."

That insane statement is probably worth an entire thread of its own. If you really believe that, I pity you. Remember this is a worldwide forum, not one devoted to Washington.



Paul D


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Paul D

  

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MrManFri Feb-14-03 03:57 AM
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#49. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 48)


  

          

I was referring to Australia, which is where this entire debate has been centralized on. I did make a couple assumptions, namely that the person involved lives in or near an urban area. Obviously there will be some exceptions.

  

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Paul DFri Feb-14-03 04:24 AM
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#52. "RE: Corporate Executive Greed"
In response to MrMan (Reply # 49)


  

          

And about which you obviously know nothing.

Tertiary education places are limited. In my home state this year nearly 5,000 qualified school leavers missed out on tertiary education places.

And to go from the sublime to the ridiculous (and I personally know these people) one of those limited places went to the wife of the owner/CEO of one of Queensland's biggest Financial Advisory firms. This lady (in her 50s) is going to University because she is bored and wants a hobby. She has no intention of doing anything with her degree once she gets it. They are really nice people - he's self-made and a thorough gentleman and they are both extremely generous with their time to the community - but it still pisses me off that she has kept a school-leaver out of university.


"..seeing as there's plenty of companies willing to offer student loans and other services..."

And this comes from your extensive knowledge of Australia, does it?



Paul D


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Paul D

  

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MrManFri Feb-14-03 04:41 AM
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#54. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 52)


  

          

>And this comes from your extensive knowledge of Australia, does it?

I'm quite familiar with HECS, so yes. From the official HECS page:

http://www.hecs.gov.au/pubs/hecs2003/2003_1.htm
"1.1 What is HECS?

The Higher Education Contribution Scheme (HECS) is a fair and equitable way of ensuring that students contribute to the cost of their higher education. It is considered reasonable that students who directly benefit from higher education should pay part of the cost of their studies, while the Commonwealth pays the major part of the costs involved. HECS provides a loan to students that is indexed to maintain its real value but is otherwise interest-free, with deferred income contingent repayment. The deferred payment arrangements mean that students are not prevented from participating in higher education if they are unable to pay the contribution up front. The money collected through HECS is spent on the higher education system."

  

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Paul DFri Feb-14-03 05:35 AM
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#57. "RE: Corporate Executive Greed"
In response to MrMan (Reply # 54)


  

          

HECS simply defers payment of course fees. It puts no money into student hands and in no way contributes towards living expenses, associated expenses (textbooks etc).
And of course it's not available to the previously mentioned 5,000 who were unable to access university in the first place.




Paul D


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Paul D

  

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observerThu Feb-13-03 02:42 AM
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#9. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 5)


          

I agree with you 100% Paul. The problem is that work is not what is valued in society, it's money and your work is most often judged by others in terms of what you make.

Whenever we have a garbage strike here it always makes me think about how much I value their services compared to some other 'elite' occupations. The idea that someone who performs boob jobs makes more money than a firefighter or police officer makes me scratch my head.

Those that think there are no barriers to entry in the economy should get their heads out of the sand.

  

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HauxfanThu Feb-13-03 03:02 AM
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#12. "RE: Corporate Executive Greed"
In response to observer (Reply # 9)


          

Mr.Man, you really have a lot to learn in the real world!

For one thing, the difference between deserving and pure greed.


  

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LilJoeThu Feb-13-03 05:56 AM
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#16. "RE: Corporate Executive Greed"
In response to Hauxfan (Reply # 12)


  

          

Sounds like the case of another snot nosed kid born with a silver spoon in their mouth.Their day of reckening will come when they have to get out on their own and see what the real world is all about.

LilJoe

  

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MrManThu Feb-13-03 06:41 AM
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#19. "RE: Corporate Executive Greed"
In response to Lil'Joe (Reply # 16)


  

          

I hope you're not referring to me, because if you are you're sadly mistaken. I've had to deal with more than my share of hardships (none of which I care to reveal here), so perhaps you should wake up and realize not everyone with capitalistic beliefs is ingenuous.

  

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rhbowlerThu Feb-13-03 07:09 PM
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#36. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 5)
Thu Feb-13-03 07:17 PM

  

          

Taking Hal's place wth the name calling Paul?? Doesn't really seem neccesary to illustrate your point now does it? He's young, so what? He goes on HIS life experience, just as you go by yours. In his life and times, what he says is perfectly true, and to some extent, the points he makes were somewhat valid in your time too. The fact you couldn't go to college for whatever reasons, aren't the issue. So if another person, by whatever good fortune DID spend the money, and time it takes to go to college, which by your own admission was much more difficult to do in those days, should he not get more compensation in his later years, in the position of responsibility he's in? Do i think 32 million is right? No, i don't, but i'm not in that position. The people who hired him must have thought so at the time they hired him. Remember Chrysler Corp? They were on the verge of bankruptcy several years back, until a man named Lee Iacocca came along, took the helm of the company, and steered it back to solvency agin. Now here is a company that makes 100's of millions of dollars a year now. Is he worth 32 million when he leaves? While i'm sure there isn't, there should be a relationship to the job he did when he worked for the company. Not knowing the financial situation of the bank, when he joined, as opposed to when he left, it's hard to say whether there is ANY justification for the payout he got, or not. In Iacocca's situation, i believe thee is some justification for him gettng that kind of money, in the case your citing, i don't have the facts, so really don't know. Don't try and be a teacher Paul, PLEASE. A young man expresses his opinion, and rather than explain to him what you percieve as the errors in his thinking, you call him an "arrogant little asshole". And you no doubt can't understand the lack of respect for elders that young people seem to have these days? You have to give respect to recieve respect. Age has nothing to do with respect in my book. You don't earn respect from me by livng longer. Oh, and before you write my words off as being from another arrogant little asshole, i'm 52 years old.


RussH






  

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Paul DThu Feb-13-03 11:29 PM
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#41. "RE: Corporate Executive Greed"
In response to rhbowler (Reply # 36)
Thu Feb-13-03 11:30 PM

  

          

In my original post, I used myself as an example of what I perceive as the inequity of this situation. I made (as I have stressed several times since) no complaint about my personal situation. As I have stated, I enjoy my job and I consider that I receive fair recompense for what I do. Your young hero's first post was a direct attack on me with implications that I am (a) whingeing about my lot and (b) unsuccessful because I am lazy.
I do not consider myself either of the above, and it is not the first time that MrMan has attacked me thus. He's an arrogant little a@#$hole!



Paul D


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MrManThu Feb-13-03 11:50 PM
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#42. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 41)


  

          

My first post was in no way intended as an attack, nor does it read as such. The only thing I implied was that you, as well as your wife, have have the freedom to pursue whatever career you choose, and that there is no lack of opportunities for doing so. That was an attempt at addressing your question, that being how such a large salary and severance pay can be considered fair. Any other implications are entirely in your head.

  

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rhbowlerFri Feb-14-03 06:07 AM
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#58. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 41)


  

          

I'd just think you would be past the childish name calling was my point. And you obviously choose to ignore the pount that i gave you an example of with Chrysler Corp. Since your mind is closed to any point of view but your own, i won't waste any more time stating mine.


RussH






  

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Paul DFri Feb-14-03 12:52 PM
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#71. "RE: Corporate Executive Greed"
In response to rhbowler (Reply # 58)


  

          

I didn't ignore your point about Iacocca, but since it exactly paralleled Al's point about Gerstner and IBM I didn't see any point in repeating myself. But since you've obviously read only selected parts of the thread I suggest you find my response to Al and substitute Iacocca for Gerstner.



Paul D


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Paul D

  

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KevinRTue Feb-18-03 06:48 AM
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#107. "RE: Corporate Executive Greed"
In response to rhbowler (Reply # 36)


          



I agree wholeheartedly with you, rhbowler.

That's not to take anything away from you, Paul. However, I do believe that, in order to pay this guy that 32.5M, there had to be more than his signature on the check. I would imagine there is a pretty greedy board of directors at that bank too !!!


Pentium 2.4 512, Win XP SP2, ATI A-I-W 9800, Intel M/B, On-Board Audio

  

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EdGreeneFri Feb-14-03 06:03 PM
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#74. "RE: Corporate Executive Greed"
In response to MrMan (Reply # 1)


          

>Your wife could have quit any time she felt like it and
>pursue another line of work, but chose not to. You could
>have majored in business/engineering/computer science and
>gotten a fairly high-paying job, but chose not to. Heck, you
>could go to college now and come out 4 years later with such
>a degree, but you choose not to. The opportunities are
>there, you just have to use them.
__________________________________

The presumption of course being that doing any and or all of what you suggested above would have put him in position to reap the same benefit.

From him I read: "It is not fair that so many labor and so few benefit from that labor."

From you I read: "It IS fair that the many, unless they are as ruthless, as greedy for power as the few, get screwed."

There's something might wrong with your take on things.

Ed
I get it done with YAHOO-DSL!

  

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MadDadThu Feb-13-03 06:25 AM
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#18. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 0)


          

Very interesting post. If you're happy making 50k a year, good for you. I'd be happy to be earning that much. If you're not complaining about your post in life, then what's the reason for this post? You obviously think that something is "unfair" in this situation.
It sorta sounds like you expect your wife to have been paid more than she was, since obviously this fella was WAY overpaid, in your opinion. And if he hadn't been "overpaid", there would have been more money for your wife.I would bet, Paul, that had you been in his situation, you would have done the same.
And sorry if you think the opportunities just weren't there for you. I agree with Mr.Man.......if you REALLY had a hankering to earn more money, you could have. I bet there are people in similar situations as yours when you were a wee lad that have.
Let's see.......1% of Australia's population makes over $200,000/year. Look at it this way. If only 1% of Australia's population is capable of earning that much per year, the pool of competition must be much less than having to try to fight for the other 99% of the available jobs.
Tell ya what, Paul. Go start your own business, with your own money. Take out loans, find a building. Market your product, or find an agency to do it for you. Hire a law firm. Hire accountants. Now keep an eye on what they do. Keep up with the competition. Got to school in the evenings. Work weekends. Don't take a vacation for 5 years. Be the person in charge of keeping it going, bringing in new customers, deciding on what equipment you need to invest in, hire employees, fire employees, deal with government regulations, workers comp, osha, the epa, etc., etc,. But, with your logic, make sure the person who does the filing gets paid more than anyone in the company, including you. After all, why would you deserve it? You haven't done shit.

  

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observerThu Feb-13-03 06:53 AM
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#20. "RE: Corporate Executive Greed"
In response to MadDad (Reply # 18)


          

MadDad, I think you are missing the point of the post. I don't think it was an "I feel hard doneby post", he was only quoting his experiences as a point of reference. For one thing these CEO's are not assuming any risk whatsoever (it's a corporation, they are hired just like everyone else), so your lengthy post regarding starting your own business, while true in many ways, does not support the case for high CEO payouts.

I can't see how anyone can think that money like that is deserved for leaving a company. That money is on top of what he earned in salary and any other bonuses. The CEO is not to blame, it's the state of the marketplace, same in sports. I can understand Paul's questioning of the current corporate environment, when working at a bank we were constantly being told that raises would be small because of poor market conditions, gradually staff was hired more frequently as temporary workers ie. no medical or retirement benefits. During this time CEO payouts skyrocketed because all these changes were good for the bottom line and the banks made record profits.

While I think these sorts of payouts are horrifying there is really no way to prevent it, if people are willing to pay, it shows there is sufficient demand for these people. Ultimitely, it's up to the Board of Directors and shareholders to decide what's right for the company.

  

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MadDadThu Feb-13-03 07:11 AM
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#24. "RE: Corporate Executive Greed"
In response to observer (Reply # 20)


          

Paul, or anyone, put in that same situation, is going to take the money. The only reason people whine about this stuff (as long has it is legal)is because they aren't the one to go home with the millions.

In the end, it's only money.

  

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AlThu Feb-13-03 06:54 AM
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#21. "RE: Corporate Executive Greed"
In response to MadDad (Reply # 18)
Thu Feb-13-03 07:18 AM

  

          

Paul,

I doubt the severence pay was for leaving the job. If it was, the Board didn't do a very good job of negotiating the package. More likely it was a payment directly related to the performance of the company.

But that is the Board of Directors decision. Not yours. Fair isn't what the point is. Creating situations that make for successful, profitable companies are.

Since I don't know the exact details of the situation that you described, let's use one I do.

Would you begrudge Lou Gerstner one penny of the money he received to bring IBM back from the dead? I wouldn't, and as a stockholder, it is my (and a lot of other people like me) money that paid him. He made the company more valuable, more responsive, and increased the value of my investment. That is what we paid him to do, and we paid him very, very well to do it. Now, could your wife have done the same?



  

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MadDadThu Feb-13-03 07:23 AM
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#26. "RE: Corporate Executive Greed"
In response to Al (Reply # 21)
Thu Feb-13-03 07:37 AM

          

http://www.theaustralian.news.com.au/common/story_page/0,5744,5976169%255E16943,00.html

"Murray also explained yesterday that even after the writedown, CFS was still worth $1.5 billion more to his bank than when CBA bought it as part of the Colonial merger, and that its $5.4 billion book value compared favourably with recent transactions such as Westpac's purchase of the far smaller BT"

Unless my math is wrong, $32,000,000 is .59% of $5,400,000,000.

edit....ok, it's .59%, not .06%

  

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AlThu Feb-13-03 07:30 AM
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#27. "RE: Corporate Executive Greed"
In response to MadDad (Reply # 26)


  

          

A hair less, but close enough, Mad Dad...



  

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Paul DThu Feb-13-03 07:48 AM
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#30. "RE: Corporate Executive Greed"
In response to MadDad (Reply # 26)


  

          

"Murray defended the payout yesterday by saying his bank wasn't aware of all the details of the senior Colonial First State executive's contract at the time of the Colonial purchase."



That's a defence? Why weren't they aware?

Murray will still get his $4m performance bonus this year, despite what the small shareholders think.

Gerstner is a special case. No, I don't dispute that he deserved every penny he got. He did perform, measurably and spectacularly.

And the snide reference to my wife is well below the standard of debate I've come to expect from you, Al.




Paul D


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AlThu Feb-13-03 07:55 AM
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#31. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 30)


  

          

It wasn't a snide remark, Paul. Sorry you took it that way. The point is that CEOs get what they get because they are in rare supply. Gerstner is not a special case, he is one of many CEOs who earn everything they make. Lou just happened to be the best fit for IBM.



  

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Paul DThu Feb-13-03 08:04 AM
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#32. "RE: Corporate Executive Greed"
In response to Al (Reply # 31)


  

          

OK - I misread it. I found it hard to reconcile with the Al I thought I knew anyway.

"The point is that CEOs get what they get because they are in rare supply."

Tell that to MrMan. He seems to think it's as easy as buttering a slice of bread.





Paul D


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MrManThu Feb-13-03 08:13 AM
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#33. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 32)


  

          

>Tell that to MrMan. He seems to
>think it's as easy as buttering a slice of bread.

What? How did you infer that? I said that it's possible for anyone who's willing to invest the time and energy necessary for it. Never did I say it was easy.

  

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PointmanThu Feb-13-03 06:52 PM
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#35. "RE: Corporate Executive Greed"
In response to MrMan (Reply # 33)


          

You may want to come back to this thread when you're over forty, have a special needs child to care for (translated: no one wants you on their corp. medical plan) have someone like an Enron or Worldcom on your resume and most potential employers would rather have a 'recent'low paid college grad learning to do what you already know how, but at a higher salary.
You may even get to counsel someone like the guy mentioned above. You may get to see him bawl like a baby and hear him blubber something like, "I was so loyal and proud of who I worked for, I even used their name as part of mine. I wasn't just John _____, I was John ____, with _______. You may get to hear him tick off a number of significant accomplishments and achievements in service of the company. You may even get to hear that later, he walked out onto the football field, where he'd been a star high school athelete, and blew his brains out before his big life insurance policy lapsed for non-payment of premium.
Gee, I wish you could have been there. Dumb me, I didn't think to tell him that he could have gone back to college, gotten another degree and all his problems would have been solved.

Pointman

  

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MadDadThu Feb-13-03 08:11 PM
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#37. "RE: Corporate Executive Greed"
In response to Pointman (Reply # 35)
Thu Feb-13-03 08:15 PM

          

So, what are you saying? It sounds to me like you think people are entitled to something just because of the hand they were dealt in life. No one said life is fair, and no one said life is easy.

  

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PointmanThu Feb-13-03 09:51 PM
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#38. "RE: Corporate Executive Greed"
In response to MadDad (Reply # 37)


          

I thought I making the point that the farther you go in life the tougher the problems get and the harder simple solutions are to come by.

I don't believe I was talking about any sort of entitlements. I just wish I could have said something that would have helped the guy make a different choice.

Just curious, what kind of encouragement or advice would you have given a guy facing that set of circumstances?




Pointman

  

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MrManThu Feb-13-03 10:11 PM
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#39. "RE: Corporate Executive Greed"
In response to Pointman (Reply # 38)


  

          

Wow, that really sucks. I sympathize with him.
Did he look into charity? There's quite a number of charaties for which he sounds like he'd been eligible, such as the Break Charity and Special Kids Fund.

  

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MadDadThu Feb-13-03 10:30 PM
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#40. "RE: Corporate Executive Greed"
In response to Pointman (Reply # 38)


          

He needed professional help, there isn't anything I could have said to help.

  

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Paul DFri Feb-14-03 12:00 AM
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#43. "RE: Corporate Executive Greed"
In response to Al (Reply # 31)


  

          

"Gerstner is not a special case, he is one of many CEOs who earn everything they make."

Like the chairman of Enron, and HIH and OneTel in Australia?

Rightly or wrongly, all the public sees from many major companies, particularly in the financial sector, is ever-decreasing service and availability for Joe Average and ever-increasing manipulation of company funds for personal gain.

In Australia ten years ago (not long, 10 years, really) CEOs were paid on average 40x Average Weekly Earnings. That figure is now 400x, and that entire increase is attributable to about 2% of all CEOs. And you really believe that is justifiable. Those figures come from the chairman of the CEOs Institute of Queensland, and he says they are indefensible.




Paul D


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AlFri Feb-14-03 11:09 PM
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#76. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 43)


  

          

You chose three examples of bad CEOs. I can post names of literally hundreds of good CEOs. Heck, just from Gerstner's book, you can pull out 30 or so. Bad business is not the rule, it is the exception. It is the exception partly because it is self-destroying. But it makes great press (IBM pre-Gerstner and early Gerstner got a lot more press coverage than later when Lou was turning the company around...same for Iococca and Chrysler).



  

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doctormidnightThu Feb-13-03 06:58 AM
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#22. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 0)


  

          

Also remember that some executives receive compensation to get the hell out of the company. I saw that happen at Circuit City, they basically told the director for the whole west coast and Hawaii to resign and take a payment package because he sucked so bad, or be fired. I think he walked away with 4 million cash, 1 million in stock, and 1 year of pay.

  

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MadDadThu Feb-13-03 07:04 AM
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#23. "RE: Corporate Executive Greed"
In response to doctormidnight (Reply # 22)


          

HEY! I could suck real bad at that job, too. Hell, hire me, then I'll leave after only, say, 1 week on the job, for only 1 million, half of which I'd give to Paul.

  

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doctormidnightThu Feb-13-03 07:37 AM
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#28. "RE: Corporate Executive Greed"
In response to MadDad (Reply # 23)


  

          

Hehe, I heard you already suck at your job

  

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MadDadThu Feb-13-03 07:38 AM
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#29. "RE: Corporate Executive Greed"
In response to doctormidnight (Reply # 28)


          

gimme my millions and I'm outta here

  

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Paul DThu Feb-13-03 02:00 PM
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#34. "But wait, there's more"
In response to Paul D (Reply # 0)


  

          

The payee and the CEO of the Bank both issued statements today. These statements clearly and totally contradict each other in the area of whether or not the Bank had foreknowledge of their potential liability.

Conclusion: One of them is lying.

Or have I misunderstood, and that's just good business practice.




Paul D


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hal9000Fri Feb-14-03 01:46 AM
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#44. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 0)


          

Just look how some of you so fervently defend and support the breathtaking greed and opulence of these corporate executives and all under the auspices of free enterprise and a capitalist system. You're just jingoistic puppets of the system. They adore you! You've been groomed as children and brainwashed by one of the greatest propaganda accomplishments of the dominant political mythology through corporate owned media. And corporate owned media has created the pop culture you worship in order to shape your thinking and lull you into a stupor to keep you as slaves by infecting art, academia, film, contemporary literature and journalism.

Paul realizes the outrageous and self-indulgent greed going on here because he thinks for himself--outside the system. All anybody--with the slightest degree of original thought--has to do is consider the disproportionate distribution of wealth to realize that the amount that asshole received is highway robbery. His payoff is nothing short of Feudalism which is where capitalism has it's roots. He counts his gold coins like the rest of the corporate thieves at the expense of the slaves that keep the company going. He's not being paid for his creativity because he's not creative, he's just greedy. If the company were creative, they'd pay their employees more money and ask EVERYONE to contribute their creativity. And this has nothing to do with the true meaning of free enterprise. It's GREED pure and simple.

While some of you so blindly praise and worship corporations thinking that's free enterprise, you should know that judges give privilege after privilege to corporations. A corporation is a "person" under the Constitution, sheltered by the Fourteenth Amendment. They use the law, the regulatory agencies, and the Supreme Court doctrine that money is a form of speech. They spread their money around to Congress, to state legislators, to think tanks, the press--all the places where ideas are influenced in this country.

European and US corporations control three quarters of all the natural resources in Africa, Asia and Latin America. You're living in an ever expanding empire that uses the military to pave the way to dominate and control other countries in order to exploit the poor inhabitants for the greed of the corporate ruling class. And it's YOU (the working class) that picks up the tab by paying taxes for the military to support these corporate spawned wars to further capitalist expansion. Very few of you know anything about the WTO or IMF and how they dictate and shape government policies regardless of a government's laws, and yet in spite of that look at how some of you stand by cheering on corporations and their greedy executives, waiving your little flags, blowing your little bugles while the empire marches off to war for the corporate capitalists while you pick up the tab!

Some of you have said, "I wish they'd just get on with the war." You don't give one fleeting thought that 500,000 innocent civilians are about ready to die in Iraq--their lives mean nothing to you. And you same war mongering creeps paint anyone who dissents as a traitor or treasonous--which is completely contrary to the true spirit of the Declaration of Independence. True patriots defend the constitution! The truth is there's no war on terror, there's a war on dissent as the US goes after one made up evil doer after another: communism, socialism, war on drugs, war on terror, war on this and war on that. The truth is the US is just expanding its empire while they tell you what to be afraid of so you won't see the truth and realize that you're the ones paying their tab while they get rich. YOU'RE THEIR IGNORANT SLAVES!

  

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ShellyFri Feb-14-03 02:06 AM
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#45. "RE: Corporate Executive Greed"
In response to hal9000 (Reply # 44)


  

          

So what happened to your avatar and sig?

Shelly

  

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doctormidnightFri Feb-14-03 02:08 AM
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#46. "RE: Corporate Executive Greed"
In response to hal9000 (Reply # 44)


  

          


  

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scaramoucheFri Feb-14-03 03:58 AM
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#50. "RE: Corporate Executive Greed"
In response to doctormidnight (Reply # 46)


  

          

That's not Hal. Where's the Sig and the Post is too short.

Guns don't kill people. Husbands who come home early kill people.

  

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Carl DFri Feb-14-03 06:11 AM
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#59. "RE: Corporate Executive Greed"
In response to hal9000 (Reply # 44)


          

Welcome back Hal - strangely enough I was just watching 2001: A Space Odyssey last night on DVD. Still wish I could figure out what the heck's going on in the last half hour though...

... it's a lot like the Beatles' Yellow Submarine, probably would help if I had (quite) a few drinks first...

Carl

  

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MadDadFri Feb-14-03 08:02 AM
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#65. "RE: Corporate Executive Greed"
In response to hal9000 (Reply # 44)


          

So, who signs YOUR checks, HAL?

  

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hal9000Fri Feb-14-03 08:53 AM
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#70. "RE: Corporate Executive Greed"
In response to MadDad (Reply # 65)


          

I'm gonna love to see your ass kissing arrogant face when it's time for you to retire and social security has gone broke punk.

  

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MadDadFri Feb-14-03 04:31 PM
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#73. "RE: Corporate Executive Greed"
In response to hal9000 (Reply # 70)


          

So, who signs YOUR checks, HAL?

  

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DavyWavyWed Feb-19-03 01:04 AM
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#111. "RE: Corporate Executive Greed"
In response to hal9000 (Reply # 44)


  

          

Hal is my new Hero!!!


DavyWavy -

  

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meekocmereFri Feb-14-03 05:31 AM
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#56. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 0)


          

Paul, I understand what bugs you. I recently sat through a "Town Hall Meeting" for the company with which I'm employed as a records analyst (read: file bitch) where, for four hours, we all got smoke blown up our collective ass about how we should not fear for the stability of our corporation. During this meeting, the Powers That Be oh-so-profusely thanked us for our "involuntary" contributions: lower wages; indeed, pay cuts for some employees, less benefits for more money per week, and revised (read: crappy) vacation, sick time, and holiday pay policies. I was farting smoke for the rest of the day after I left.

I make $9. I pull files all day long, and file correspondence in insurance apps, and what I do DIRECTLY enhances the company in that I must make sure that I file important documents, and pull files, and return files to the shelves with 100% accuracy, thus ensuring efficient, fast customer service. After all, without customers, what's a business? But if I leave, I'm not going to get so much as a pat on the ass, let alone 32 million dollars (was that the correct figure?). Nobody except for maybe my direct supervisors is going to notice my absence.

Sure, I could get my ire up and go storming out of this job, but, like you, I have financial responsibilities, a family to support, and no luxury for frivolity. My choice? Sure. In a perfect world, I'd have done everything "right" the first time, and maybe I'd be a CEO, too. But instead, I have kids (2 of whom are not much younger than Mr. Man) for whose morally sound and financially secure upbringing I'm responsible. I really actually do like my job (though you may think otherwise due to the tiny bitch fest above), because while I'm not getting rich, it's not backbreaking work, either, and my husband carries the medical benefits, so most of the things that really got under my skin at this meeting didn't really apply to me. But I used to be a single mom, and company politics like those DID affect me personally at one time, so I sympathized with the people who were really taking it up the crapper so the company I work for can maintain its Fortune 500 status. The whole premise of the meeting was that we should not fear for this company's financial status and standing, but we don't. We fear for our own.

The bottom line is that while I don't sweat stuff like this, because I'm just not in a position to (my husband's in college now and it's very important to both of us that he finish and pursue his chosen field while I help by raising his children and contributing to the household, financially), I definitely "get" what upsets you, buddy.

  

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MadDadFri Feb-14-03 07:16 AM
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#60. "RE: Corporate Executive Greed"
In response to meekocmere (Reply # 56)


          

"I make $9. I pull files all day long, and file correspondence in insurance apps, and what I do DIRECTLY enhances the company in that I must make sure that I file important documents, and pull files, and return files to the shelves with 100% accuracy, thus ensuring efficient, fast customer service. After all, without customers, what's a business? But if I leave, I'm not going to get so much as a pat on the ass, let alone 32 million dollars (was that the correct figure?). Nobody except for maybe my direct supervisors is going to notice my absence."

I'm being an asshole, but the reason you make $9.00 an hour is because what you do, while important, could be done by 75% of the population. So if you quit today, someone else will be there tomorrow doing the same task.

  

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doctormidnightFri Feb-14-03 07:25 AM
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#61. "RE: Corporate Executive Greed"
In response to MadDad (Reply # 60)


  

          

My job doesn't even require an actual breathing person to do it, just a body will work, or even a mass of dead cells would work. So I'm grateful that I make 8 bucks an hour stuffing stuff into other stuff, even though my official title is "Assistant to Program Coordinator".

  

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BrendaCanadaFri Feb-14-03 07:37 AM
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#62. "RE: Corporate Executive Greed"
In response to doctormidnight (Reply # 61)


          

Are corporate employees free moral agents?
Finding an ethical way to restore balance when dealing with corporations

By Carlton Vogt February 13, 2003

During our discussions over the last two weeks on the corresponding ethical obligations between individuals and corporations, many people have made the point that when we deal with corporations, we are dealing not with the corporate entity itself, but with individuals who are moral agents like ourselves. Therefore, they say, all the old rules apply.

I'd like to be convinced of that, but I'm afraid I fall a little short. This is why I constructed the "thought experiment" in my last column (see "People like the old rules," http://www.infoworld.com/article/03/02/07/06ethmat_1.html ) of a totally automated hiring system that completely removed human interaction, asking whether people would then feel bound by their word. No one who responded to the column really tackled that question.

But the issue opens up the question of whether, when dealing with corporate employees, we really are dealing with free moral agents. On one hand, of course, they are. They can make decisions about certain things and they can act as if they are in charge. On the other hand, their ability to make many decisions is so severely constrained that it calls their freedom into question.

Let's go to a hiring example. Suppose I'm applying for a job at a mega corporation and am dealing with a very nice person who's a hiring manager. The manager, in good faith, offers me a job and I, in good faith, accept. Before my starting date, I get a better offer. Am I bound by my word? Some people say yes. Personally, I would probably feel the same way.

But let's turn it around. Suppose, the day after I was hired, the hiring manager receives a notice to either not fill the position or to hire someone else -- the CEO's nephew, perhaps. What can the manager do? Pretty much the only choice is to do what the orders say and to give me the "I feel awful, but there's nothing I can do" speech. The manager could, of course, ignore the order and put me on the payroll anyway, but that would simply result in both of us being out of work.

So, while in some ways the hiring manager is a free moral agent, when acting as an agent of the corporation, he will have to do whatever it is the corporation wants and not what his sense of ethics tells him is the right thing. When you come right down to it, despite the fact that I am dealing with a human interface, my real interaction is with the corporation.

What we're left with here is an asymmetrical situation. Most of us want our word to mean something and want to enter into these types of negotiations with a sense of honor and ethics. On the other hand, corporations, lacking this moral motivation, do whatever best suits their bottom line. Our needs, feelings, and inconvenience are not factors in the equation. What are our choices?

We could continue the current asymmetry. We could continue to play by rules that have been found to work well in moral agent-to-moral agent relationships. We will lose most of the time, but we will feel good about ourselves (as so many people have told me). I think that only works for a little while, and that as time passes, we will begin to feel worse.

In fact, you could make an argument that a lot of the trouble in society can be directly traced to people feeling out of control. When people perceive that they are always on the losing end, they begin to develop some pretty hostile feelings. This usually plays itself out in anti-social behavior in one form or another.

Our second choice is to adapt. We can simply take the attitude that if they're not playing fair with us, then why should we play fair with them. In fact, many people responding to my last two columns said as much. Some of these readers went so far as to make the distinction between when we should feel bound and when we shouldn't. Some suggested reciprocity -- treat the corporation the way it treats you, the way you think it will treat you, or the way it has treated other people.

As much as I can see how people get to that point, I just can't buy it. And I particularly can't buy a floating, highly subjective standard for when I keep my word and when I don't. First, it's just too much work, and I'm not that ambitious. Second, it's open to faulty judgment about the motives and possible behavior of the other party.

But most important, the whole idea of keeping your word is an either-or proposition: either you do or you don't. If you only do it some of the time, then it's pretty much the same as not doing it at all, because people can't rely on it. And the whole point of keeping your word is that people can rely on it when you say something.

The third possibility open to us is to change the nature of the corporation. While corporate abuses have existed for a long time, they became much worse in the period beginning with the 1876 ruling that declared them "persons," giving them broad powers and removing many of the restrictions on them. In earlier times corporations were restricted to only the activities for which they were chartered, had limited life spans, and could be shut down if they failed to serve the public interest.

If we want to change the asymmetry and create some more balance between us and them, this is where we have to look. How do we do that? I'm not sure. It's a legal and political matter. They real question is whether reform can happen at that level at all, given the immense power and wealth of corporations and the fact they have become so enmeshed and identified with the government. Until that change happens, or unless we're willing to reframe our ethical stance vis-ŕ-vis corporations, we may be doomed to live with the asymmetry and to always be on the losing end of these deals.

http://www.infoworld.com/article/03/02/13/07ethmat_1.html


There is a forest in an acorn.

  

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Paul DFri Feb-14-03 07:59 AM
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#63. "RE: Corporate Executive Greed"
In response to BrendaCanada (Reply # 62)


  

          

"What we're left with here is an asymmetrical situation. Most of us want our word to mean something and want to enter into these types of negotiations with a sense of honor and ethics. On the other hand, corporations, lacking this moral motivation, do whatever best suits their bottom line. Our needs, feelings, and inconvenience are not factors in the equation."

Thankyou Brenda. I think that's exactly what I've been trying to say.



Paul D


Insert text here



Paul D

  

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MadDadFri Feb-14-03 08:00 AM
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#64. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 63)


          

Then start a company that reflects your ideals.

  

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hal9000Fri Feb-14-03 08:36 AM
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#67. "RE: Corporate Executive Greed"
In response to MadDad (Reply # 64)
Fri Feb-14-03 08:44 AM

          

Another reason corporate executives are able to collect these huge payouts is because of corporate welfare and illegal tax loopholes. Enron alone failed to pay Billions in taxes. Who do you think picks up the tab? You and millions like you with your $9/hour wage. Who do you think is going to pay for this war in Iraq? YOU! Who's going to profit from it. Defense contractors and oil companies. The Bush Administration are all crooks left over from the 1980's tied to those two industries.

BTW, Donald Rumsfeld continually warns of rogue states holding America hostage to nuclear blackmail but fails to mention his own contribution: Rumsfeld was on the board of ABB, a company that sold hundreds of millions of dollars of equipment and services to North Korean nuclear plants.

  

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MadDadFri Feb-14-03 08:40 AM
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#68. "RE: Corporate Executive Greed"
In response to hal9000 (Reply # 67)


          

see post 65

  

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hal9000Fri Feb-14-03 08:48 AM
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#69. "RE: Corporate Executive Greed"
In response to MadDad (Reply # 68)


          

http://www.alovelinksplus.com/

  

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bobboFri Feb-14-03 08:11 AM
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#66. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 63)


  

          

As I read down this thread, I kept thinking about ENRON, the enriched CEOs, the demise of the company, the lost jobs and lost investments. Just business as usual.






  

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labyrinthFri Feb-14-03 10:02 PM
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#75. "RE: Corporate Executive Greed"
In response to bobbo (Reply # 66)


          

Bobbo, if you think Enron is bad, check out the debacle of Montana Power.
http://www.wwjtv.com/rooney/sixtyminutes_story_040181944.html

  

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bobboThu May-22-03 01:53 AM
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#112. "RE: Corporate Executive Greed"
In response to labyrinth (Reply # 75)


  

          

Here's another take on corporate greed.






Attachment #1, (jpg file)

  

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meekocmereFri Feb-14-03 02:28 PM
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#72. "RE: Corporate Executive Greed"
In response to MadDad (Reply # 60)


          

Actually, it's a very detail-oriented job, and they went through 7 temps before me who couldn't do the job, and 3 since I was hired. I should have clarified that I'm not upset about the amount of money I make - in this economy, especially in my area of the country (Eastern PA), that's not a bad salary for someone who doesn't have a professional degree. I guess the point that I was trying to make is that without me, or, if we're going to play it your way, the other 75% of the population, my company wouldn't be so highly rated, and it doesn't seem to occur to them that it isn't JUST the CEO's that hold any company together. It's also the dedicated "little people" who only make 18,200 per year who still show up every day because they KNOW that any job is better than no job, and who feel that even though they aren't doing their dream job, since they have to go to work, they might as well give it their all.

Really, I wasn't bitching about my job. As I said, I like it, and I'm happy to HAVE a job with things the way they are. But I did feel like I had to commisserate with Paul, because I understand why he's upset.

  

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hal9000Sat Feb-15-03 05:26 AM
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#77. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 0)


          

Upstairs: Former Kmart CEO Charles Conaway received nearly $23 million in compensation during his two-year tenure.
Downstairs: When Kmart filed for bankruptcy in 2002, 283 stores were closed and 22,000 employees lost their jobs. None of them received any severance pay whatsoever.

Upstairs: Former Tyco CEO Dennis Kozlowski made nearly $467 million in salary, bonuses and stock during his four-year tenure.
Downstairs: Shareholders lost a massive $92 billion when Tyco's market value plunged.

Upstairs: The CEOs of 23 large companies under investigation by the SEC and other agencies earned 70% more than the average CEO, banking a collective $1.4 billion between 1999 and 2001.
Downstairs: Since January 2001 the market value of these 23 companies nosedived by over $500 billion, or roughly 73%, and they have laid off over 160,000 employees.

Upstairs: In the year before Enron collapsed, about 100 executives and energy traders collected more than $300 million in cash payments from the company. More than $100 million went to former CEO Kenneth Lay.
Downstairs: After filing for bankruptcy, Enron lost $68 billion in market value, 5,000 employees lost their jobs, and Enron workers lost $800 million from their pension funds.

Upstairs: Wal-Mart CEO H. Lee Scott, Jr. received more than $17 million in total compensation in 2001.
Downstairs: Wal-Mart employees in 30 states are suing the company alleging that managers forced employees to punch out after an eight-hour work day, and then continue working for no pay. This is a clear violation of the Fair Labor Standards Act, which says employees who work more than 40 hours a week must be paid time and a half for their overtime.

Upstairs "Penthouse A": Citigroup provided Enron with $8.5 billion in loans disguised as commodity trades. The deals allowed Enron to artificially inflate cash flow and hide debt, which deceptively boosted share price and ultimately led to the company's collapse.
Upstairs "Penthouse B": Citigroup offered hot initial public offering shares to WorldCom CEO Bernie Ebbers and other telecom titans in exchange for their investment banking business. Ebbers is alleged to have made nearly $11 million on IPO shares sold to him by Citigroup.
Downstairs: Citigroup agreed to pay $215 million in fines to the FTC to settle allegations of "predatory lending," loosely defined as mortgage lending that preys on customers, especially ones with bad credit, through abusive practices like deceptive marketing and inflated fees on unnecessary refinancings.

Upstairs: More than a million U.S. corporations and individuals have registered as citizens of Bermuda to avoid taxes, a practice okayed by the IRS. Although the exact number is unknown, the IRS estimates that "tax motivated expatriation" drains at least $70 billion a year from the U.S. Treasury.
Downstairs: If you were poor enough to apply for the Earned Income Tax Credit in 2001, your chance of being audited was one in 47. If you made more than $100,000 a year, your chance of being audited was one in 208.

Upstairs: The richest 20% of Americans earn almost 50% of the nation's income.
Downstairs: The poorest 20% of Americans earn 5.2%.

Upstairs: The top 1% of stock owners hold 47.7% of all stocks by value.
Downstairs: The bottom 80% of stock owners own just 4.1% of total stock holdings.

Upstairs: In 2000, the average CEO earned more in one day than the average worker earned all year.
Downstairs: In 2000, 25% of workers earned less than poverty-level wages.

Upstairs: Between 1990 and 2000, average CEO pay rose 571%.
Downstairs: Between 1990 and 2000, average worker pay rose 37%. For more information about the disturbing disparity in wealth and privilege between the top 1% and the bottom 80%, open up the business section of your newspaper. Or turn on Court TV.

http://www.ariannaonline.com/books/pigs_updown.html

  

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MadDadSat Feb-15-03 05:42 AM
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#78. "RE: Corporate Executive Greed"
In response to hal9000 (Reply # 77)


          

I'm so glad Arianna Huffingbitch is on my side

  

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hal9000Sat Feb-15-03 05:45 AM
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#79. "RE: Corporate Executive Greed"
In response to MadDad (Reply # 78)


          

Comforting isn't it? Her and Courtney Love...

  

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AlSat Feb-15-03 10:22 AM
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#80. "RE: Corporate Executive Greed"
In response to hal9000 (Reply # 77)


  

          

So what is your solution, HAL? Shall we move to the equality of poverty for all like North Korea and Cuba?



  

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Paul DSat Feb-15-03 01:03 PM
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#81. "RE: Corporate Executive Greed"
In response to Al (Reply # 80)


  

          

Equitable taxation would be a good start.

Australian wage earners pay tax on their contributions to superannuation as it comes out of their gross pay. While their money is waiting for them and earning for their retirement, those earnings are taxed. Then when they finally retire and start receiving their pension, that also is taxed. A lump sum payout is not an available option, and nothing is available to them until 60 years of age, and the government is planning to raise that to 65.

Salaried executives take tax-minimised lump sum payouts like the one under discussion, and the money is available to them immediately.




Paul D


Insert text here



Paul D

  

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doctormidnightSat Feb-15-03 01:08 PM
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#82. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 81)


  

          

Paul, what is a "superannuation"? Is that like a 401K in the US?

  

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Paul DSat Feb-15-03 03:07 PM
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#83. "RE: Corporate Executive Greed"
In response to doctormidnight (Reply # 82)


  

          

Retirement income scheme. In very simple terms, employee and employer each contribute while the employee is working. The money is invested in a managed fund and paid back to the employee as a pension after retirement.

Pretty well universally compulsory for wage-earners in Australia now, because it removes 90% of government repsonsibility for retired people, and at the same time is a nice little tax earner, as explained.




Paul D


Insert text here



Paul D

  

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Carl DSat Feb-15-03 03:25 PM
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#84. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 83)


          

You would think that after paying tax all one's working life one would be entitled to a pension paid by the government, and they needn't bother with the old, worn out "we can't afford it" excuse.

I guarantee there won't be any shortage of money for a war in Iraq, in fact I'm just waiting for the next slug - a "war tax." I'm almost prepared to bet on it.

Not to mention that $15 million has already been wasted on those ridiculous "terrorism booklets" sent to everyone in Australia (I haven't even bothered to open mine.)

I had to laugh a couple of years back when we had these ads on the radio and TV saying the government is saving $23 million a week by cracking down on Social Security fraud - my comment was: "Great - so where's my tax cut?" Yeah, right! They just waste it on something else instead so what was the point (except to waste even more money on the ads.)

Any government that tries to abolish the aged pension will be committing political suicide and if they have any sense (unlikely) they'll know it.

Carl

  

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doctormidnightSat Feb-15-03 10:40 PM
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#90. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 83)


  

          

When you say "wage" earners, are you talking about everybody with a job, or is it limited to employers that provide the service?

  

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Paul DSun Feb-16-03 12:56 AM
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#92. "RE: Corporate Executive Greed"
In response to doctormidnight (Reply # 90)


  

          

Pretty well everyone with a job. Self-employed are expected to follow suit, but I'm not sure how.



Paul D


Insert text here



Paul D

  

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doctormidnightSun Feb-16-03 01:13 AM
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#94. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 92)


  

          

Hmm... its not like that here in the US, nobody is required to offer any kind of retirement benefits, especially those in the "low skill" jobs (or whatever it is they call it). So like people working at WalMart or any other large company usually don't see anything like that, unless they have moved up in the ranks to a fairly high spot. Even after working at Circuit City as a dept. manager for almost 3 years I didn't get squat, nor did the store sales manager. I think the Ops Manager and the Store Manager did, of course, but even then it wasn't much.

  

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ShellySun Feb-16-03 02:03 AM
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#98. "RE: Corporate Executive Greed"
In response to doctormidnight (Reply # 94)


  

          

Not quite true, Mike. Employers are required to match the employee contribution to Social Security each pay period.

Shelly

  

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doctormidnightSun Feb-16-03 02:16 AM
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#99. "RE: Corporate Executive Greed"
In response to Shelly (Reply # 98)


  

          

OK, I was thinking more alongs of a 401K or other such "optional" retirement plan. I haven't had much experience with Social Security yet, give me a few years. This is getting off the topic a tad, but does the IRS tax SS payments when you pay into it AND when you start receiving it? And how would one find out how much they have accrued in SS?

  

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MadDadSun Feb-16-03 05:04 AM
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#100. "RE: Corporate Executive Greed"
In response to doctormidnight (Reply # 99)
Sun Feb-16-03 05:06 AM

          

"OK, I was thinking more alongs of a 401K or other such "optional" retirement plan. I haven't had much experience with Social Security yet, give me a few years. This is getting off the topic a tad, but does the IRS tax SS payments when you pay into it AND when you start receiving it?"

Yes. You could find out here, but I guess they make you pay to read the whole article.
http://www.time.com/time/archive/preview/from_redirect/0,10987,1101030203-411439,00.html



"And how would one find out how much they have accrued in SS?"

I get a statement every year from the government that shows how much you have put in and what your retirement benefits would be.
http://www.ssa.gov/mystatement/

  

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hal9000Sat Feb-15-03 06:21 PM
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#85. "RE: Corporate Executive Greed"
In response to Al (Reply # 80)
Sat Feb-15-03 06:23 PM

          

The issue of corporate greed and corporate control needs to be approached at the local, muncipal level in order to empower citizens against corporate takeover. In Pennsylvania for example, nine townships have passed laws banning the corporate ownership of farms. The issue was big corporate hog farms coming in. Instead of trying to regulate hog manure and hogs per square feet, the local people decided that in these Pennsylvania townships no corporations can own farms.

So it starts with municipalities exercising their authority to define what goes on within their jurisdictions on a local level. That's the kind change that needs to take place in communities around the country and as that gains momentum the movement will work its way up to the state level in order to drive the movement into the national level. It's all about who gets to decide and who sets the values in this country. The idea is to remove the few people behind the shield of giant corporations so that the public is in control through directly elected officials not chosen by the corporate class.

In the Pennsylvania example, agribusiness corporations and the Farm Bureau launched lawsuits and are suing the townships. But the local people got pissed off and every time the Farm Bureau in Pennsylvania writes an article saying they're concerned about efficiency and the consumer, people see through the bullshit. It motivates local people to be stronger and clearer and more determined. And that's the idea for activists to do around the country.

This idea was suggested by a guy named Richard Grossman who co-directs the Program on Corporations, Law, and Democracy. His organization contests the authority of corporations to govern.

  

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paladin1Sat Feb-15-03 06:56 PM
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#87. "RE: Corporate Executive Greed"
In response to hal9000 (Reply # 85)


  

          

"...all pigs are equal, but some pigs are more equal than others..."
- G. Orwell





What lies behind us and what lies before us are small matters compared to what lies within us.


paladin1

  

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hal9000Sat Feb-15-03 07:08 PM
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#88. "RE: Corporate Executive Greed"
In response to paladin1 (Reply # 87)


          

LOL!

"Animal Farm!

Animal Farm!

Never through me shalt thy come to harm."

  

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AlSat Feb-15-03 09:02 PM
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#89. "RE: Corporate Executive Greed"
In response to hal9000 (Reply # 85)


  

          

So a farmer can't set up a corporation in order to take advantage of tax breaks or the other advantages that the legal entity of a corporation provides?



  

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MadDadSun Feb-16-03 12:31 AM
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#91. "RE: Corporate Executive Greed"
In response to Al (Reply # 89)


          

http://www.post-gazette.com/localnews/20020922farms0922p5.asp

It looks like family owned farms are exempted:
http://www.celdf.org/scm/ord/ord7.asp

  

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paladin1Sat Feb-15-03 06:45 PM
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#86. "RE: Corporate Executive Greed"
In response to hal9000 (Reply # 77)


  

          


>Upstairs: Between 1990 and 2000, average CEO pay rose 571%.
>Downstairs: Between 1990 and 2000, average worker pay rose
>37%.

And the Democrats STILL say they're for the "working man".

Welcome back, Hal9000.




What lies behind us and what lies before us are small matters compared to what lies within us.


paladin1

  

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Paul DSun Feb-16-03 01:00 AM
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#93. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 0)
Sun Feb-16-03 01:03 AM

  

          

The thought crosses my mind that several people here are arguing strongly that people should be paid strictly according to what value they add to an entity.

Taking this to its logical conclusion, I assume that means that teachers, police, the military, garbage collectors and health workers (to name a few) should work for nothing.

And it's interesting to note that my post #34 didn't attract one comment. Perhaps that's because "business ethics" is just another oxymoron!



Paul D


Insert text here



Paul D

  

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AlSun Feb-16-03 01:22 AM
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#95. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 93)


  

          

>Taking this to its logical conclusion, I assume that means
>that teachers, police, the military, garbage collectors and
>health workers (to name a few) should work for nothing.
>
>And it's interesting to note that my post #34 didn't attract
>one comment. Perhaps that's because "business ethics" is
>just another oxymoron!

I guess we disagree with the value that teachers, police, the military, garbage collectors and health workers add to an entity. In fact, I would argue that all are underpaid for what they add to the value of the state.

As for #34, what was there to say? You pretty much stated it all by claiming one must be lying...if your summary was correct...but you didn't give us any link to see if your summary was correct.



  

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Paul DSun Feb-16-03 01:51 AM
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#96. "RE: Corporate Executive Greed"
In response to Al (Reply # 95)


  

          

Boy, did you ever misunderstand that one! I didn't say it was my opinion, I said it was a logical extrapolation of some other peoples opinions.

Al, I think I know you well enough to know that you and I would totally agree on what value those occupations (even municipal garbage collectors) add to society, which is a pretty important entity. Whereas I'm not even sure that some of these posters would recognise society or the state as an entity in the context of this thread.

I should have said "economic value" because that's the only value some people recognise, and I'm more interested in other peoples responses than yours, because I know that while we disagree on a few things you have a highly developed sense of values.

And I'm sorry, but I can't provide links to radio interviews, but basically Murray (the bank CEO) said they were unaware of the payout conditions in the contract, and Cuffe directly contradicted that.




Paul D


Insert text here



Paul D

  

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doctormidnightSun Feb-16-03 01:52 AM
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#97. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 93)
Sun Feb-16-03 02:01 AM

  

          

Depends on what you define as the "entity" in that case. All of those professions could working for "the state", in which case they should be valued above quite a few positions I can think of. Or, you could look at it as if they are working for "the education system" or "the police force", in which case they are subject to peer review, performance reviews, etc. Take a cop for example. If he makes an average number of arrests, doesn't taint evidence, is basically firm but fair, and makes an honest effort to get *real* criminals off the street (as opposed to the Dell dude.. I may hate his guts, but I don't buy the "weed = terrorism" B.S.), then you could say that he is adding to the "entity" by saving them money, and also contributing to the relative improvement, peacefulness, fairness, and overall "goodness" of the entity, which is a what our lives are really supposed to be about.

edit: Ah, OK.. I see your post above now.

  

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81 NewbeeMon Feb-17-03 12:18 PM
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#101. "RE: Corporate Executive Greed"
In response to doctormidnight (Reply # 97)


  

          

In the course of reading these and other posts,I have come to the conclusion that many College Degrees are not worth the paper(sheepskin) they are printed on.Other than highly technical degrees a high school education and common sense is all that's needed.Most of the BAs of today are not better than that.Training on the job with technical classes can fill a large percentage of todays needs.
As for IBM and Lou a lot of his success was timing and he was paid very well for it.He timed his leaving well too.
Paul,Don't let the naysayers get your goat.Anyone whose been around the working world should appreciate your point.(That is with all that smarts from their degrees)It is a little frightning to hear that Hal agrees with some of your statements as a way of pointing out how screwed up we are.I understand your statement about the jerk who screwed the bank and agree with your position.HANG IN THERE

81 Newbee

  

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AlMon Feb-17-03 02:51 PM
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#102. "RE: Corporate Executive Greed"
In response to 81 Newbee (Reply # 101)


  

          

If you think that Gerstner's success is due to timing, I expect you play the lottery often hoping for "timing" to help you out...



  

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MadDadMon Feb-17-03 10:20 PM
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#103. "RE: Corporate Executive Greed"
In response to 81 Newbee (Reply # 101)


          

There are plenty of companies around here that for certain positions NO SHEEPSKIN = NO JOB.

I have a nephew who attended college and graduated with a degree in computer science. Senior year, he goes to a job fair, gets a $1,000 dollar signing bonus, with a first year salary of $45,000, and a $1,200/yr raise after 90 days. 1 year later, gets hired by a corporate office for Bank One at $65,000/year. Not bad for one year out of college. Never would have happened without the sheepskin.

  

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81 NewbeeMon Feb-17-03 11:39 PM
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#104. "RE: Corporate Executive Greed"
In response to MadDad (Reply # 103)


  

          

Hello Al and Maddad,Al, I don't play the lottery.I don't like the odds.I agree with you on many things but I do believe that much of Lou's success was coming on the scene at the right time.His emphasis on services vs products was a practical idea while the ecomomy was "ballooning".It has now become a major challange for his successor on a downturn..I wish him success.Lou did what needed to be done in reducing the number of employees ,reducing benefits and trying to change the retirement plans ,increasing retiree costs for medical coverage etc.These actions added to the bottom line but took a toll on employee and retirees morale.He was paid very well for his contributions and was in the right place at the right time.His book is selling well too.I can assure you he doesn't need any more money.
He has the world by the ass with a down hill drag!
Maddad,Exactly my point .His degree was technical.I still maintain that most of todays BAs are equeal to what a good high school education used to be.I've been retired since 1984 and I hope things have improved.Our kids and granchildren lack the emphasis on math and science in their schools.I have encountered some who couldn't figure how to make change without cash registors that calculate it for them.This is not true in all cases but is far more prevelant than it should be.A lot of knowledge is just as dangerous as a little if it is not properly applied.Long live common sense!
I don't mean to start a feud with this.

81 Newbee

  

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AlTue Feb-18-03 06:19 AM
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#105. "RE: Corporate Executive Greed"
In response to 81 Newbee (Reply # 104)
Tue Feb-18-03 06:23 AM

  

          

81,

My degrees are in Liberal Arts. I could not have got my first major job out of school (Army Officer) without them, nor could I have got the jobs I have had since without that experience.

It isn't what the degree is in that is often the issue, it is the fact that the applicant made the effort and earned one.

Btw, the Country Manager for one of the Pharmaceutical Companies here has a degree in linguistics.

As for Lou, you seem to miss the point that he was the one with that "practical idea". Nobody else saw it that way. Everybody else wanted to break the company up.



  

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81 NewbeeTue Feb-18-03 06:38 AM
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#106. "RE: Corporate Executive Greed"
In response to Al (Reply # 105)


  

          

Al,I believe you make my point.Your degree only served to get you in the door.If you had been given the opportunity , even without the sheepskin, you would have been successful.Common sense and natural intelligence did more, I'm sure , to account for your success than your degree.The experience in getting it may have added to your maturity but I bet you would have been successful anyhow.

81 Newbee

  

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Paul DTue Feb-18-03 07:59 AM
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#108. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 0)


  

          

I'm surprised this has gone as long as it has, and pleased in a diverse sort of way. The debate has been willing and interesting.

For the record, I gave up early Saturday morning local time because the thread was taking 10 minutes to refresh at home. Then our hot water system burst Sunday night and flooded the house, so I didn't get to work yesterday.




Paul D


Insert text here



Paul D

  

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81 NewbeeTue Feb-18-03 11:47 AM
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#109. "RE: Corporate Executive Greed"
In response to Paul D (Reply # 108)


  

          

I hope the mess is out of your way by now Paul.Water can cause a lot of damage.Like you I am surprised that this thread went on so long.I am equeally surprised that HAL didn't try to overwhelm it.I enjoyed the discussions.By the way I like your map with the 'roo.Very clever

81 Newbee

  

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EdGreeneTue Feb-18-03 11:53 AM
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#110. "Golden Parachutes" was: RE: Corporate Executive Greed"
In response to Paul D (Reply # 108)


          

They’re called “Golden Parachutes”.

I started a small business in 1972. I sold emblems and patches for uniforms. In talking to users, some expressed an interest in a certain type of badge. They asked if I knew of one. I could not find anything like what they had asked for. I started trying to design an emblem and worked with the company that made my patches and emblems.
I succeeded in designing the emblem and wanted to market it. I found investors, bought some old, industrial manual sewing machines, had dies made and on and on. The Company took off. Soon, I had to abandon the sewing machines for a desk. The company sprouted. Made me more money than I could have dreamed of.
I incorporated the company with me as CEO-general manager. I had a smart lawyer. By the by-laws, my common stock voted 1 to 1 on ordinary corporate business, 2 to 1 on major acqusitions and purchases and 3 to 1 on hiring and/or firing of executives. Meaning? I was bullet-proof, firing proof*. My lawyer also had written a “Golden Parachute” clause for me.
*As the sole designer, I personally owned,the proprietary Copyrights/Patents to the new designs and emblems. Fire me and I walk with the designs and start over.
The upshot is the company was sold, they bought out my rights to the designs and I made out like a bandit. Even better, the “Parachute” got me paid an annuity for the next 20 years.

Mine was the only “Parachute” the company had. Why did I get a huge lump sum buyout and the annuity? Because I was not being paid or rewarded for my puny starting capital or the initial “sweat” labor I put in but for the decisions I made over the years that made the company a success.
Unlike the banker, mine was a small company. But I too had a “Parachute” and that made all the difference. Both of us, CEOs, got paid and compensated for making decisions that made the company (I don’t know about the bank) money.
"Paid (and rewarded) for making decisions."

Am I worth what I made on the deal? Bet your sweet Bippy I am!

Ed
I get it done with YAHOO-DSL!

  

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