How Much Should Wall Street CEOs Get Paid?

Executive compensation on Wall Street has been quite a controversial topic lately. Most of the major Wall Street financial institutions have received taxpayer money to help bail them out of the financial crisis. Goldman Sachs (NYSE: GS  ) , Morgan Stanley (NYSE: MS  ) , and JPMorgan Chase (NYSE: JPM  ) have paid the money back, and Bank of America (NYSE: BAC  ) has a plan to do so. But that still leaves Citigroup (NYSE: C  ) and AIG (NYSE: AIG  ) with money to repay, among others -- and regardless, the repayments haven't silenced Main Street criticism regarding employee (mainly executive) compensation.

Goldman Sachs in particular recently took heat after announcing that it had set aside close to $17 billion, or roughly half its net revenue, for employee compensation. Back in October, Bank of America CEO Ken Lewis was pressured into returning $1 million of his salary and forgoing the rest of his $1.5 million salary for 2009.

The big question currently occupying Wall Street: how much Goldman Sachs CEO Lloyd Blankfein deserves to receive. This is of particular interest because compensation for the head of the industry's top firm will set a new benchmark. According to a recent Fortune article, based on Goldman's expected net income this year, he would be in line for a payment of around $64 million, or just shy of the $68 million he received in 2007. You could argue that Blankfein deserves to be rewarded handsomely for managing the firm through the worst crisis in decades, and putting it on course to earn record profits. However, Goldman certainly would have fared much worse without the government’s intervention.

Finally, as the article explains, Blankfein's pay will be even more of a yardstick for the industry, because the leadership turnover at rival firms actually gives him some seniority among the CEO crowd, even after just three years on the job. It would certainly be difficult for other companies to justify paying their chiefs more.

What do you think? Does Blankfein -- or any Wall Street CEO, for that matter -- deserve tens of millions in compensation? Let us know in the comments box below.

Claire Stephanic does not own any of the stocks mentioned. The Fool has a disclosure policy.


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  • Report this Comment On December 04, 2009, at 3:17 PM, theHedgehog wrote:

    No. No corporate CEO deserves that kind of money. Period. No company should be setting aside that large of a percentage of its net revenue to compensate one single person. No public company should be setting aside 50% of its net *REVENUE* for employee compensation. Why? Because the shareholders deserve something out of that, and the customers deserve something, as well.

    So, you say, this is "free market capitalism" so it's OK. Uh, no. We don't have a free market, and it's questionable whether we ever have. There's also the issue of corporate responsibility to its clients, when a company grows to that size.

    So, no, corporate officers don't deserve this kind of money; especially during a recession.

  • Report this Comment On December 04, 2009, at 3:18 PM, theHedgehog wrote:

    No. No corporate CEO deserves that kind of money. Period. No company should be setting aside that large of a percentage of its net revenue to compensate one single person. No public company should be setting aside 50% of its net *REVENUE* for employee compensation. Why? Because the shareholders deserve something out of that, and the customers deserve something, as well.

    So, you say, this is "free market capitalism" so it's OK. Uh, no. We don't have a free market, and it's questionable whether we ever have. There's also the issue of corporate responsibility to its clients, when a company grows to that size.

    So, no, corporate officers don't deserve this kind of money; especially during a recession.

  • Report this Comment On December 04, 2009, at 3:22 PM, thetucket wrote:

    Oh, come on. GS is a public company, and if its shareholders think Lloyd is worth $64M, then they should give it to him. I know change through shareholder activism is a seeming David vs. Goliath endeavor, but ultimately, it's their company. I can't imagine, however, that they wouldn't rather see some of the $17B GS set aside for comp end up in their own pockets as a dividend, reinvested in some other useful way, or used to shore up balance sheets instead.

    As for whether we, as taxpayers, should be ok with it? "He who pays the Piper calls the tune," and we paid that there Piper, at least temporarily. Yeah, yeah, I know, Lloyd "didn't even want to take the bailout," or so they say. Give me a break! We bailed them out, plain and simple. GS, like its peers was teetering on the brink of destruction and it looted the treasury to avoid its own seemingly imminent demise.

    The terms of that sweet deal should have been more beneficial to the taxpayer.

    It's Uncle Sam's fault, though, not Lloyd. A deal's a deal, and I'd take it if I were him...though he'd do well to donate a hefty portion to charity. He could start with Foolanthropy...

  • Report this Comment On December 04, 2009, at 3:23 PM, thetucket wrote:

    Oh, come on. GS is a public company, and if its shareholders think Lloyd is worth $64M, then they should give it to him. I know change through shareholder activism is a seeming David vs. Goliath endeavor, but ultimately, it's their company. I can't imagine, however, that they wouldn't rather see some of the $17B GS set aside for comp end up in their own pockets as a dividend, reinvested in some other useful way, or used to shore up balance sheets instead.

    As for whether we, as taxpayers, should be ok with it? "He who pays the Piper calls the tune," and we paid that there Piper, at least temporarily. Yeah, yeah, I know, Lloyd "didn't even want to take the bailout," or so they say. Give me a break! We bailed them out, plain and simple. GS, like its peers was teetering on the brink of destruction and it looted the treasury to avoid its own seemingly imminent demise.

    The terms of that sweet deal should have been more beneficial to the taxpayer.

    It's Uncle Sam's fault, though, not Lloyd. A deal's a deal, and I'd take it if I were him...though he'd do well to donate a hefty portion to charity. He could start with Foolanthropy...

  • Report this Comment On December 04, 2009, at 3:24 PM, Turfscape wrote:

    the Hedgehog wrote:

    "No public company should be setting aside 50% of its net *REVENUE* for employee compensation. Why? Because the shareholders deserve something out of that"

    I agree with that. Dedicating such a large portion of revenue to compensation without the justification of results robs the shareholders of value.

    the Hedgehog wrote:

    "and the customers deserve something, as well."

    I disagree. Customers decide if there is value in the product or service itself. They pay their money and get their deliverable as expected. They should have no expectation that the company will be providing some sort of goodwill pricing because of their success.

  • Report this Comment On December 04, 2009, at 3:35 PM, theHedgehog wrote:

    <i>.though he'd do well to donate a hefty portion to charity.</i>

    Neither the shareholders nor the customers benefit from such a plan.

  • Report this Comment On December 04, 2009, at 3:39 PM, theHedgehog wrote:

    the Hedgehog wrote:

    "and the customers deserve something, as well."

    Turfscape responded:

    <i>I disagree. Customers decide if there is value in the product or service itself. They pay their money and get their deliverable as expected.</i>

    What you're not taking into account is the system of corporate monopolies that has taken over America. In many cases, there is simply no choice for the customer.

    So, that brings us to something even more fundamental: break these companies down so that there is actually some competition in the market. The idea that larger size equals more efficiency only works when there is actually a need for the company to compete for customers. With the situation we have now, this is not the case. Instead of a free market, we have a corporatocracy. This is not good for the consumer.

  • Report this Comment On December 04, 2009, at 5:43 PM, flattirer wrote:

    NO one is worth 64m ceo sports figuare or mooon star 5%of net profitis go enought. I work comission so can they

  • Report this Comment On December 04, 2009, at 6:38 PM, soldi37 wrote:

    It has allways been my understandig , that you reward anyone for doing a good job, how can they reword these peaple for doing a lausy job,! can someone explain that to me ? they would have gone backrupt , if , public money was not used ,his this the case of who do you know ?& not what you know?

  • Report this Comment On December 04, 2009, at 10:10 PM, TimelessOne wrote:

    To devote 50% of revenue to (mostly executive) compensation is excessive. To pay people who churn markets and have organizations thrash money between accounts without producing a viable product is questionable, since the value of the service they provide remains largely within the group of those involved in managing that churn. Compensate people at a rate that allows them to have immunity to their actions which are destructive to the financial system invites that destruction, especially among those with the psychological problems to feel that not only must win but also ensure others lose.

    To claim that the compensation levels are agreeable to the shareholders ignores the insulation executives and boards have from true shareholders, and the large percentage of shares held in the short-term by investors participating in the churn rather than trying to ensure the long-term viability of any particular corporation.

  • Report this Comment On December 05, 2009, at 12:29 AM, xetn wrote:

    Corporate executives should be paid whatever they can negotiate with the board and with support of shareholders. If you as an investor disagree with their pay packages, don't invest; vote with your dollars. It is no concern for the government and all "normal" pay is purely subjective with everyone having a different opinion.

  • Report this Comment On December 05, 2009, at 8:17 AM, JFT45 wrote:

    I have two advanced technical degrees, do science for a living that has great potential to change the world for the better and don't even make six figures after twenty-plus years on the job (read salary cap). These guys get paid huge sums for trading paper and handing out loans and credit cards to people who are not credit-worthy. Further, schmucks like me are then given the priveledge of bailing them out with my tax dollars after they screw up royally and come close to sinking the global financial system.

    Does anyone agree with me that there might be something wrong here?

  • Report this Comment On December 05, 2009, at 10:08 AM, solarfool314 wrote:

    Nope, this is excessive compensation.

    The company belongs to the shareholders, not the CEO.

  • Report this Comment On December 05, 2009, at 10:27 AM, succer wrote:

    There should be some law that a CEO can not earn more than 100 times what the lowest man in the company earns.

  • Report this Comment On December 05, 2009, at 10:31 AM, tkell31 wrote:

    Cap it at 100 times the lowest paid employee, distributes the wealth a little more which is fine since they are still making ONE HUNDRED times more then another person who is doing a job. Do CEOs etc really need to be modern day feudal lords in order to do a good job? As a manager I'm continually told that money doesnt motivate people as I'm given a 3% budget for salary increases, so why the double standard?

  • Report this Comment On December 05, 2009, at 12:34 PM, Rustyismydog wrote:

    In a free market system, any entity (person, company, industry) is supposed to be paid an amount that is roughly equal to the amount of value that entity adds to the system. Is anyone prepared to argue that Mr. Blankfein, Goldman Sachs or the entire investment banking community ADDED about the same value as they were paid...over any period you want to choose. It's not even close enough to debate. I can only conclude that the free market is not operating freely, i.e., they have found a way to game the system for their own gain. I would certainly not try to legislate a maximum earnings, but I would love to hear about a way to put the "free" back in "free market".

  • Report this Comment On December 05, 2009, at 1:04 PM, MORK000 wrote:

    REWARDS FOR IMPROVINT PROFIT SHOULD BE REWARDED. HOWEVER IF A COMPANY LOSES PROFIT THEN IS SHOULD BE TAKEN AWAY FROM THAT CEO.

  • Report this Comment On December 05, 2009, at 2:06 PM, meddguy wrote:

    I think that execs should get some multiple of the

    lowest paid employee of the company. Maybe 30x

    or 40x. A side benefit might be that the low paid

    employees might actually get a raise! Also, I think

    that shareholders should have a say in execs pay,

    as well as their 'golden parachutes'. If the board

    decides that an exec should get more than the

    historical standard for that company, then shareholders

    should be able to vote on it.

    M

  • Report this Comment On December 05, 2009, at 4:08 PM, XMFClarity wrote:

    meddguy, I think that's a good idea too. In fact, I think some progressive companies might even have a policy like that in place. Likely not Wall Street firms, but I've heard, for example, that Ben and Jerry's (owned by Unilever) has something like that in place. Anyone know?

  • Report this Comment On December 05, 2009, at 10:41 PM, marybutte wrote:

    No one is worth a $64 million dollar bonus!!! If the company makea a profit why isn't a million seem enough! This is what is killing our country! Our core values as Americans is at stake here this is ths land of opportunity not rape of the public I feel as a shareholeder I have no say in what the compensation package is The CEO's are already well compensated the bonus is like winning the power ball but they expect to win every year. I wish I could!!

  • Report this Comment On December 05, 2009, at 11:10 PM, blesto wrote:

    It seems that for institutions that didn't recieve taxpayer money or have already paid it back that it should be a matter strictly between the Execs, Board members, and Shareholders.

    As for the others that are still owned by the government the compensation should be the same as an equivelant ranked government employee. And none should be paid more than the President

  • Report this Comment On December 06, 2009, at 12:15 PM, Smithtenn wrote:

    I would suggest that CEOs, or anyone earning more than the average income of all employees of the organization be required to post a bond equal to his or her proposed salary (and bonuses and intangibles such as corporate jets, chauferred limousines, etc). If he or she is fired or demoted in less than 10 years, his bond is forfeit. If in any 10 year period, the company loses money for that 10 years, or does not make a 10% profit for the 10 years, he is fired and his bond is forfeit, and he receives no compensation of any kind above his or her base salary. No executive bonus paid any year may be more than an amount equal to the executive's stock and bond holdings in the company. Any compensation exceeding these guidelines must be ratified by the stockholders. If there are no "big name" applicants for the position, or the applicants say they are "to good" or can get a better deal elsewhere, wish them well and say goodbye. If this is a universally applied rule for CEOs, we will soon find out if all businesses will fail because they can't get a 5 billion dollar CEO. The CEO only has a chance to show his or her skill if there are people willing to invest in the company. The investors need to get much more of the profits.

  • Report this Comment On December 06, 2009, at 4:38 PM, LaPlatz wrote:

    Give me a break---The President of the United States only receives 400,000 a year plus some pretty good perks---Give top company exec's the same plus at the most similar perks. The comments that to attract good people a corporation must pay these type salaries

    is pure "hogwash". Tell prospective CEO"s that the

    pay will not exceed 30 to 40 times the lowest paid employee in the company and I sincerely doubt there would be any difficulty in filling those positions !!!

    By the way, that is approximately what executive compensation was back in the 50's and the 60's.

  • Report this Comment On December 07, 2009, at 10:27 AM, lehem wrote:

    I think that all publicly traded companies should have their CEO's pay package voted on (simple majority vote) as a yes or no. If it is a no then the pay is changed and a new vote. This won't happen until it is a law like reg fair disclousure (Thanks again Fool.)

  • Report this Comment On December 07, 2009, at 12:58 PM, mountain8 wrote:

    Nobody is worth these amounts, not brokers, not criminals, not sports stars.

    If you want a comparison that hits home, Wall street executives make about as much as a drug cartel leader. Seems they do the same kind of work, destroy productivity.

    Most deserve jail time.

  • Report this Comment On December 07, 2009, at 1:33 PM, wclkf wrote:

    No employee of a corporation is entitled to more than 100% bonus. When an individual owns his own company & risks his own money, he is entitled to ALL of the proceeds (or loses). Corporate employees use stake-holder assets, and risk those assets. They collect their salary whether they make a profit or a loss. All losses are "awarded" to the stake-holders, as should all the "profits!"

  • Report this Comment On December 07, 2009, at 1:53 PM, dsnbuild wrote:

    I haven't heard so much whining since I visited the newborn ward when my last child was born!

    Capitalism works, restrictions and regulations are not necessary for compensation at public companies. Until the current "owners" (read shareholders) object, the salary of the CEO will always be determinedby the Board.

  • Report this Comment On December 07, 2009, at 9:27 PM, globalsailor wrote:

    If banks are smart then wall street pay should not be a quarterly or yearly phenomenon. Business cycles are 5-10 years and the company shouldn't pay any performance based bonuses unless that employee can take the portfolio through a market bust and the recovery.

    By basing performance pay on performance over the entire course of the business cycle, employees of financial companies can properly manage their own risk.

    Until financial companies compensate their employees for performance in both bull and bear markets, I am going to look elsewhere for investments.

  • Report this Comment On December 09, 2009, at 12:15 AM, secjd wrote:

    I agree with Hedgehog - all around. Frankly, it's a shame that the shareholders and bondholders don't get their act together and sell their holdings in these institutions, as they are obviously being ripped off. Ironically, the very regulation that the bankers consistently whine and complain about also protects them from the kind of "bust-up" takeovers with which the marketplace punished "fat" corporations and their impotent, overpaid executives back in the early-mid 1980s (before the trend grew from a corrective force into its own bubble).

    As Hedgehog astutely points out, it's quite another matter for their customers, many of whom don't have much - if any - real choice in the matter. Maybe instead of bailing out the behemoths withTARP, that money should have been used to create a "public option" for smaller businesses to get financing? Just a thought.

    In any event, though Obama was smart enough to incentivize Wall Street to pay back the money by disallowing them their obscene paychecks until they did, I think the gov't should have gone a step further: TARP recipients should have been required to pay pre-payment penalties for paying the money back ahead of schedule - just the same as any of them would do to their customers; after all, what's good for the goose is good for the gander, right? Not to mention that they could use a dose or two of their own medicine!

    I also agree with meddguy and LaPlatz, but you're not likely to get there voluntarily. That's why I would propose that the tax code be changed so that any compensation paid to the highest paid execs that is in excess of, say 30X-35X the compensation paid to the lowest paid employees would no longer be deductable by the company. That way, companies would be pressured into bringing executive compensation into line. Incidentally, according to a colleague of mine who practices tax law, that is what the tax code used to provide until it was overhauled in 1986 - and executive compensation has steadily exploded ever since.

  • Report this Comment On December 09, 2009, at 1:13 AM, secjd wrote:

    II agree with theHedgehog - all around. It's a shame that the shareholders (and bondholders) of these institutions don't get their act together and revolt or sell, as they are clearly being ripped off. Ironically, the same "confining" regulations that the bankers constantly whine about protect them from being subjected to the punishing takeovers inflicted on "fat" corporations and their complacent, overpaid executives back in the early-mid 1980s, before that trend also became its own bubble.

    Though Obama was at least smart enough to incentivize the bankers to pay back the bailout money by depriving them of their obscene paychecks until they did, I think the gov't should have gone a step further: it should have required them to pay the same prepayment penalties any of them would levy on their commercial customers who want to pay off their loans ahead of schedule; after all, what's good for the goose is good for the gander - not to mention that these "dandies" could use a dose or two of their own medicine!

    Also, as theHedgehog astutely observes, the relative "leverage" of their customers is pretty much a myth, as most of them really don't have much, if any choice in the matter. Perhaps instead of TARP bailouts, the money should have been used to provide a "public option" for smaller businesses to obtain significant amounts of financing? Just a thought.

    I also agree with meddguy and LaPlatz, but doubt that you'd ever get there voluntarily. That is why I would propose changing the tax code to provide that any compensation paid to a company's top executives that is in excess of, say, 35X the compensation paid to that company's lowest-paid employees would no longer be deductable. This would go a long way towards encouraging companies to get their executive compensation in line. In fact, according to a colleague of mine who practices tax law, that is what the tax code used to provide until it was overhauled in 1986 - and executive compensation has exploded steadily ever since.

  • Report this Comment On December 09, 2009, at 3:05 AM, IPayTaxes wrote:

    Give me a break. What do I care how much he gets paid? I don't own a cent of GS, it's someone else's money. Did I accidentally wander into a shareholder's meeting?

  • Report this Comment On December 09, 2009, at 11:03 AM, freemarketfool wrote:

    Yes, IPayTaxes, you more or less did. The subject is executive compensation, and since Goldman Sachs is poised to set the standard, they're going to be a frequent topic of posts. If you don't like these posts, please read elsewhere, rather than making a very unproductive comment.

  • Report this Comment On December 09, 2009, at 5:31 PM, Iambrainspt wrote:

    Good Lord, NO!! The scam that has been run by the investment crowd on the rest of us has got to end.

    There is NO Way a trader or an executive of one of these companies should feel entitled to compensation in the millions of dollars every year. Unless, of course she/he is willing to pay from their own funds if the company or their niche of it, loses money. Then, they would probably average a reasonable salary over time.

  • Report this Comment On December 10, 2009, at 12:50 PM, dsnbuild wrote:

    What will your responses be if the idiots in DC one day decide to regulate ALL incomes? Will you all follow blindly? Once the regulation starts it cannot be stopped. Be careful what you ask for, all of your "salaries" may someday be controlled by a committee in Washington. At the rate we're going it will soon be, "All is for the Motherland, she knows best!"

  • Report this Comment On December 11, 2009, at 10:48 AM, KWT8011 wrote:

    $64 million dollars is almost an incomprehensible amount of money. The average American could live out many lives with that sum, let alone acquiring that much money on a yearly basis.

    I wouldn't support government legislation on the topic. I think if they set exec. compensation to 30-40x lowest paid employee, those lowest paid employees would be let go and rehired as contractors, or some other loophole would be found. I think if you wanted to set a multiple, how about some number times greater than the minimum earnings of the countries highest tax bracket?

    I don't think Blankfein cares about what people on the Motley Fool's website write about him, but the public outrage might be quelled if either he himself said "I don't really NEED $64 million," or if he was demonstrating what he did for communities with his money. People have grandeurized views of Rockefeller, Gates, Buffett, Eric Schmidt, Jim Sinegal and they are/were extremely well compensated. But they have a perception of being good people and it makes all the difference.

  • Report this Comment On December 11, 2009, at 12:38 PM, dsnbuild wrote:

    Why set a multiple? Why is it the Gov's business how much a CEO earns? If the CEO pays their taxes why should Government care? It seems odd that everyone is so bent out of shape about Executive pay. What about the electrician who charges $75/hr? Is that excessive too? If the market is willing to pay for the service who cares what the cost is.

    Are you willing to be the lowest paid employee at a company? How would you react if you got canned so the CEO could earn his "multiple"?

    It is way too easy to point a finger when you think something is unfair.

    There are plenty of Billionaires who are schmucks as well as the "good guys". Life isn't fair, and not everyone wins.

    It is none of my business how much someone earns, nor is it any of the Government's business either!

  • Report this Comment On December 11, 2009, at 1:56 PM, MrsCathyGF wrote:

    I don't know, but it seems that BO has profited handsomely from his position, too. Seems he can use a pen and, voila, the money flows out of it. But he's sure not accounatble to taxpayers ! I think a CEO etc should be compensated for the job they are doing, AFTER they effectively do it. Not before. And not out of line with what other equally comparable companies pay. We all use real estate appraisals based on similar valuations in our area, do we not ? So, it's the same with executives.

  • Report this Comment On December 11, 2009, at 2:16 PM, TIGHTWAD3 wrote:

    I THINK EVERYBODY IS MISSING THE REAL POINT. THE FEDS SHOULD KEEP THEIR FINGERS OUT OF THE COMPENSATION ISSUE EXCEPT FOR ONE THING: THEY NEED TO GIVE THE SHAREHOLDERS (REMEMBER, THEY ARE THE OWNERS) MORE CONTROL OVER THE BOARDS. RIGHT NOW THE CORPORATE BOARDS DO PRETTY MUCH WHATEVER THEY WANT. THIS IS WHAT IS WRONG.

  • Report this Comment On December 11, 2009, at 2:45 PM, tumachar wrote:

    At the very least this money should be going to shareholders not CEO or other executives.

    Its not just an ethical question. The compensation system has too many flaws.

    1. The system has made CEO position a job not ownership. If CEO makes money this year he takes in whole bunch. If he does not he still takes 10-20X average employee salary, while shareholders loose.

    2. The shareholders and bondholders all take losses while company handily keeps paying execs.

    Just ask yourself. Is this all possible if Goldman was a private company OWNED by 1 person?

    I think CEOs should be hired to retire with company and their compensation should have two components, (1) Reasonable cash compensation, running into 10 - 20x avg employee salary. Other being ownership interest. This should not be paid untill CEO retires.. If he is fired or leaves for any other reason (better position etc). He looses the ownership interest without recourse.

  • Report this Comment On December 11, 2009, at 3:23 PM, PIcolano wrote:

    The problem most people on Main Street have with CEO pay is if they do well, they pull home an outrageous salary, and when they fail, they still pull in an outrageous salary (or severance package). Goldman Sachs is the gold standard for corporate greed and large institutional shareholders need to vote with their shares to prevent execs from looting corporate coffers, or sell them to the point that the fat cats get the message....

  • Report this Comment On December 11, 2009, at 8:16 PM, 9tiagirl9 wrote:

    I agree with the sentiment of the last several posters. Taking such a large share of REVENUE (if indeed it was net revenue and not net PROFIT) is plain and simply stealing from the real owners of the business, the shareholders. Until the institutional investors get the cohones to do something about it at shareholder meeting it likely will continue. Is it time for the pitchforks and torches?

    Dan

  • Report this Comment On December 11, 2009, at 9:43 PM, dillon53 wrote:

    There are too many words for me to write down regarding this issue. Furthermore, the same goes for actors, etc. : You can not possibly pretend you believe in God, or even call yourselves Christians. If you, you CEOs and the rest of you rats who receive millions of Dollars a year, really believed in God, you would live on $50K per year and share the rest of your wealth with the garbage pick-up workers, the homeless, the sick. I am not a religous fanatic, just someone who is very much allergic to the unfairness in this world. Period.

  • Report this Comment On December 12, 2009, at 6:37 AM, ChrisAWard wrote:

    I agree that the best way is to leave the compensation issue with the shareholders, but shareholders should not be kept from deciding on these pay packages, or at least the proper ranges for them in advance as a guide for company management.

    The tool the government can use to give incentive to shareholders to be more proactive is to lower taxes on their dividends for those companies hold executive compensation to common sense ranges and increase taxes for the stockholders of those companies who maintain egregious levels of executive pay. Guidelines based on multiples of the lowest employees pay sound like a good yardstick to me. Perhaps offsets on such a stockholders tax for levels of health benefits or other socially beneficial programs could also be considered. There could even be the added effect of raising stock prices for those companies who were keeping exec comp within good ranges as there should be increased demand for these lower taxed stocks.

    I know probably most everyone on these MF sites cringes when someone talks about increasing taxes, but the government is already in the business of setting taxes and doesn't have to intrude into setting salary levels in my proposed scenario. If it works well it should also eventually decrease taxes on stockholders dividends as more companies come into compliance with acceptable exec comp ranges. The government would still reap the reward of a society with more equitable pay levels and all the knock on benefits of that.

  • Report this Comment On December 12, 2009, at 12:20 PM, mcdanielph wrote:

    The U.K. government has announced the introduction of a one-time 50% levy on bank bonuses of more than $41,000…. the tax — to be applied immediately and paid by companies, including subsidiaries of foreign firms operating in the U.K., rather than by employees.

    http://www.time.com/time/business/article/0,8599,1947107,00....

    We should follow suit.

  • Report this Comment On December 12, 2009, at 12:24 PM, mcdanielph wrote:

    The U.K. government has announced the introduction of a one-time 50% levy on bank bonuses of more than $41,000…. the tax — to be applied immediately and paid by companies, including subsidiaries of foreign firms operating in the U.K., rather than by employees.

    http://www.time.com/time/business/article/0,8599,1947107,00....

    We should follow suit.

  • Report this Comment On December 14, 2009, at 1:37 PM, sshobe wrote:

    No one, absolutely no one, is worth that kind of money....I don't care how much their company earns. Thier pay should, of course, be higher than the average bear, but it should have some multiple of the average Joe's pay (and I don't mean a 100 times Joe's pay).

  • Report this Comment On December 15, 2009, at 1:34 PM, KWT8011 wrote:

    "What about the electrician who charges $75/hr? Is that excessive too? "

    Wow, did you just compare $150,000 a year (assuming a consistent 40hrs of work for 50 weeks, before costs) to someone earning $64 million in salary?

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It's time to say "goodbye" to your Internet! One bleeding-edge technology is about to put the World Wide Web to bed. And if you act right away, it could make you wildly rich. Experts are calling it the single largest business opportunity in the history of capitalism… The Economist is calling it "transformative"... but you'll probably just call it "how I made my millions." Big money is already on the move. Don't be too late to the party – find out the 1 stock to own when the Web goes dark.


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