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View Diary: Why What Happened at Home Depot's Annual Meeting Matters (263 comments)

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  •  The problems with corporate governance (23+ / 0-)

    run very, very deep and really hit foundationally at some things we, as a culture, hold dear.

    The idea that CEOs 'earn' their money really does not have anything to do with whether or not they 'serve their stockholders.' That is simply a ruse to make it sound good. The economic model used by the people who justify this kind of inequity (and they are the ones who set the pay - but more of that in a moment) operate on the idea of a 'market of labor.' Therefore, only the top people qualify for such a job, there are a limited number of top people, and that they can therefore demand those top kinds of salaries.

    That may not make a whole lot of sense, but look at it in terms of sports stars: the top free agents can demand, and usually get, whatever they want.

    That is the model that the people who set CEO pay use. Conversely, the pay at the bottom is set by the other end: keep a lot of people scrambling for subsistence jobs and you don't need to pay them any kind of a moral, living wage; you only need to pay what is required to keep an adequate workforce. This is why they are so opposed to any minimum wage.

    The other point is that the CEOs reinforce this kind of model; they cross-pollinate boards and move from one company to another. It's a self-perpetuating cycle, and you are right: what happened at the Home Depot meeting is merely an overt example of what the real situation is.

    Lastly, on your point about stockholders: many people just simply don't pay that much attention to their annual reports and recognize their responsibility as owners of the companies. They don't send in their ballots, attend the meetings, or participate in any way other than cashing a dividend check or selling the stock.

    Analogy? More people voted for American Idol than voted for president.

    Great diary. Recommended.

    •  Is the pay analogy correct, though? (5+ / 0-)
      Recommended by:
      murrayewv, stagemom, greenearth, engine17, kurt

      Top sports stars have very rare skills. There aren't a lot of people who can throw a ball 98 MPH with pinpoint accuracy.

      Athletes are paid ridiculously well 1) for their skills and 2) because they're in the entertainment business, where the money stream gets concentrated from a lot of small payers to a few recipients.

      Are CEO skills as rare as athletics? I kind of doubt it.

      The airline pilot analogy might be better:  High (or used to be high) pay earned in one 2-minute period every year or so. That would assume that the CEO actually brings the company out of the tailspin before auguring in.

      Or maybe it's just because they're tall. (Courtesy of Blink, by Malcolm Gladwell).

      •  I'm not defending the pay analogy (2+ / 0-)
        Recommended by:
        esquimaux, greenearth

        what I'm saying is that it is the argument I've heard supporting this kind of ridiculous pay scale for years. The idea supporting this (albeit flimsily) is, as I have heard it, analogous to sports stars: that those who hit the top of the corporate scale do have rarified skills, there are few in their class, and they therefore deserve to be very well (VERY well) compensated for those skills.

        Problem is, it becomes circular, because the people defending that argument are both the very same ones who benefit from it and establish such pay scales for others.

      •  Is that why they have golden parachutes??? n/t (0+ / 0-)
    •  Very few (0+ / 0-)

      people are paid the federal minimum wage.

      The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.

      by deathsinger on Wed Jun 14, 2006 at 08:12:01 PM PDT

      [ Parent ]

      •  True, and (0+ / 0-)

        the reasons for that are multifactorial.

        The reason I brought up the minimum wage, however, is to explore the philosophy behind why some of these people are opposed to it in principle. The philosophy is that of a free market for labor, based on replacement costs. The people who believe in this way of thinking do not see a job as any kind of exercise in social responsibility but simply as the cost required to get the job done; that cost is based on replacement availability. You should only have to pay the minimum wage required based on availability of the next person to do that same job. And, under an absolute 'free market' system that cost should not be regulated. That applies to minimum and living wage laws as well as to union wages and collective bargaining.

        That most people don't make the federal minimum wage is partly dependent upon local and state regulations but is also dependent upon local economic factors, i.e., to get decent workers you must pay a better wage.

        Look at it also from the perspective of the corporate cons who have been notable silent in the jingoistic debate about illegal immigration. Undocumented workers provide the perfect 'test case' for this kind of thinking. They provide the ultimate unregulated work force who cannot bargain for wages or workplace protections, cannot even demand a minimum wage, and have no recourse. A dream for those who believe in an unregulated labor market.

    •  Ties into their campaign against litigation (1+ / 0-)
      Recommended by:
      stitchmd

      The massive disinformation campaign against all forms of "accountability" ligitation (medical malpractice, shareholder derivative suits, product liability, etc.) is the natural outcome of powerful organizations attempting to escape limitations on, or accountability for, their actions.

      Well stated, "stichmd."

      "Courage is the first of human qualities because it is the quality that guarantees all the others." -- Winston Churchill

      by drawnonward on Thu Jun 15, 2006 at 08:58:47 AM PDT

      [ Parent ]

    •  As one of those who doesn't vote (1+ / 0-)
      Recommended by:
      kck

      There is no comparison between voting for president and voting shares...each voter, rich or poor, gets the same one vote for president, but with stock you get a vote commensurate with what you own. If you own a small amount and you don't have any other contact with the company...it's just a 401(K) thing...how much time does it make sense to devote to researching this? It's not all on the front page of the newspaper or all over the internet like the President's shenanigans. Corporate decision-making is not a good analogy for democracy, though Republicans like to say so.

      "All governments lie, but disaster lies in wait for countries whose officials smoke the same hashish they give out." --I.F. Stone

      by Alice in Florida on Thu Jun 15, 2006 at 09:33:16 AM PDT

      [ Parent ]

      •  Good point (1+ / 0-)
        Recommended by:
        stitchmd

        That's why more trusted blocks of investers should form  There are areas I know a lot about and others in which I'm operating blindly. Use the model of CalPers. When CalPers, a very large employee union,  gets on the phone it is anwswered and they push against the system successfully. The individual members of CalPers don't have to get into the details. There's no reason why that model can't be used to marginalize concentrations of power. OK, so no more unions? Then we unify under a different banner. Like a union of Patriots who's money is used for a wider ROI than just short term gains. there is a lot of power there...

        > 518,000 American children are in foster care. Got any bandwidth? Mentor or support the kids in your zip code with emergency, short, or long term care.

        by kck on Thu Jun 15, 2006 at 09:57:04 AM PDT

        [ Parent ]

      •  Agreed, it's not the same (0+ / 0-)

        but the analogy is in the lack of interest in voting, as part of civic responsibility (political voting) vs. ownership responsibility (shareholder voting.)

        That you read and post on dailyKos presupposes that you are intereted in politics, research issues and candidates, and feel that your one vote is important in the greater scheme of things. That puts you in a rare group in the US (unfortunately.) There is, I think, a similar consideration to be made about shareholder voting, and you outlined it very well.

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