So, I've seen some discussion around here about regulating CEO and Executive pay. I agree that the salaries, bonuses, stock plans, and golden parachutes that have been handed out have been quite obscene, yet on the other hand, being a Commission-based worker most of my life, I am a huge proponent of performance-based pay. I've been thinking of a few ideas today to make sure that CEOs and other executives can take advantage of how well their companies do, and receive rewards in getting them there, but also make sure that the workers are well taken care of. After the jump are what I've come up with so far.
Look, if a company does WELL, I want to see the people who make it happen be rewarded, but rewarded justly and fairly and AFTER the people who got them there get their fair share too. I work for a small company that does well, and I know my boss is a great leader and works her ass off to make sure we're successful. I don't mind her being rewarded, but there should be a limit. Here's what I think:
1.) Set a maximum pay threshold, over which the recipient has to pay a 5% extra federal tax. Let's say for the sake of argument, an executive cannot receive a base salary in excess of 20x the lowest paid employee based on a 40 hour workweek. Then set another 40x threshold for an additional 5% Example: If the lowest paid person in your company makes $10.00/hr, which would equal $20,800/yr, then anyone in the organization with a base salary over $416,000 a year would be taxed an additional 5% up to $831,999, then an additional 5% after that.
2.) Tax all executive bonuses if the company laid-off workers in that same tax year. For every 1% of its workforce a company lays off, the executives must pay an additional 1% in taxes. On “Performance-based” bonuses. Increase this by a factor of 5 for the percentage of jobs that are outsourced overseas.
3.) Require that severance packages of executives be a reasonable ratio in relation to the average employee. Say, no more than 3x (in weeks of severance pay) what the lowest grade employee with the same time in service is entitled to. Anything in excess of this gets TAXED TO THE GILLS… I’d be happy with an extra 25% at least. I’m sick of seeing fired CEO’s walk away with YEARS worth of salary in severance packages.
4.) Shares of stock or granted to executives as performance based bonuses must be of a reasonable ratio to shares granted to non-executives as performance based bonuses. Anything over this ratio are taxes as short-term capital gains regardless of the length of time they are held, and are considered to always be the first shares sold.