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Oracle CEO Larry Ellison
Oracle's Larry Ellison has been one of the most highly paid CEOs in recent years.
Companies supposedly "need" to pay their CEOs and other top executives giant, obscene piles of cash and benefits in order to attract top talent that will propel those companies to ever-greater success and profit. And giving CEOs lots of stock options supposedly ensures their best performance, because they stand to profit personally from good stock performance. But according to a new study, that and a load of other corporate conventional wisdom about CEO pay is just plain wrong:
The companies that pay their chief executives the most see the worst results for shareholders, according to a new study, with an average annual shareholder loss of $1.4 billion at the companies with the highest CEO pay.

Exorbitant CEO compensation packages breed overconfidence, study authors Michael Cooper, Huseyin Gulen, and Raghavendra Rau write, and overconfidence leads to bad decisions about weakened business performance. Contrary to the common claim that paying executives in stock will improve their management of a firm, the study finds that CEOs who are given non-cash incentive compensation actually perform worse. The negative effects of excess executive pay linger for three years and drag shareholder returns down by between 8 and 11 percent for companies with the most lavish CEO pay packages.

The researchers came to these conclusions after looking at 17 years of compensation and performance data. It's striking how many elaborate justifications the corporate world has produced for higher CEO pay without looking rigorously at the results, while applying the opposite logic to justify low pay for rank-and-file workers. It's almost like it's mostly about coming up with excuses to pay themselves more and everyone else less. Scratch that, they're totally just coming up with excuses.

Originally posted to Daily Kos Labor on Tue Jun 17, 2014 at 11:26 AM PDT.

Also republished by Daily Kos.

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Comment Preferences

  •  Stockholders are just rich suckers to be robbed (7+ / 0-)

    like employees and customers.

    CEO's do not provide stockholder value. They are overpaid robbers.

    I voted Tuesday, May 6, 2014 because it is my right, my responsibility and because my parents moved from Alabama to Ohio to vote. Unfortunately, the republicons want to turn Ohio into Alabama.

    by a2nite on Tue Jun 17, 2014 at 11:52:25 AM PDT

    •  Passive stockholders (0+ / 0-)

      Active stockholders are the one calling the shots, and receiving "management fees," to boot.

      I'm living in America, and in America you're on your own. America's not a country. It's just a business.

      by CFAmick on Tue Jun 17, 2014 at 12:57:27 PM PDT

      [ Parent ]

    •  Many stockholders are "little" guys. (3+ / 0-)

      These are the mutual funds, retirement plans, state funds and other such funds that involve the little guys' savings, pensions, and taxes.  Personally, I think productivity would increase if the general workers got some incentives, like more pay.

    •  Coffeetalk claims to have been, or is, a CEO. T... (0+ / 0-)

      Coffeetalk claims to have been, or is, a CEO.

      That's all I have to say about *that*. It's emphatically not intended as a compliment.

      Clearly, we need one of two things: severe limits on what CEOs can be paid and how- zero stock options and pay limited as a percentage of the lowest paid entry level employees would be a *start*- or a national maximum wage that takes into account all stock options and capital gains.

  •  One way to attack CEO Pay... (6+ / 0-) by supporting Shareholder Rights.

    It should be much easier for shareholders to vote on pay packages.

    The law should also be changed so those who hold 401K and mutual funds would be able to vote.

    The SEC should require all public companies to:

    1) Notify shareholders by e-mail of votes.
    2) Allow electronic voting.
    3) Allow proxies to be assigned electronically.
    4) Require any pay package over xxx$ to be approved by a super-majority.

    The SEC has the ability to do this by direct order. Congress would not be required. Obama could do this tomorrow.

    •  MM - you can vote shares held in a 401K (1+ / 0-)
      Recommended by:

      or IRA. You can't vote shares in a mutual fund because the mutual fund is the owner of the shares and they do vote them. Institutional shareholders often have a lot of leverage on shareholder votes and take them seriously. There is an entire cottage industry built around advising mutual funds on how to vote, and that industry doesn't like big CEO comp packages.

      "let's talk about that" uid 92953

      by VClib on Tue Jun 17, 2014 at 05:14:45 PM PDT

      [ Parent ]

    •  Why not just do (0+ / 0-)

      away with the whole structure of corporations.

      They've become completely dysfunctional anyway.

      The banks have a stranglehold on the political process. Mike Whitney

      by dfarrah on Tue Jun 17, 2014 at 06:00:08 PM PDT

      [ Parent ]

  •  I'm Not Much Interested in Intramural Fighting (2+ / 0-)
    Recommended by:
    gaslark, Darth Stateworker

    within the 0.1%. Doesn't make any difference which enemy crushes me.

    A pox and a 90% marginal tax rate on both their houses.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Tue Jun 17, 2014 at 11:58:04 AM PDT

    •  Pension Funds and Colleges are huge shareholders (2+ / 0-)
      Recommended by:
      Whamadoodle, wilderness voice

      While I agree with you about tax rates, shareholder rights would likely improve business performance and help bail out underfunded public pension plans and increase funds at private colleges.

    •  I agree on the tax rate, but I am middle class (0+ / 0-)

      and have been below the poverty line for a LOT of my years. When I have been above water, I've invested in stocks. There are many like me, although we and our dollars may be fewer than the rich who invest.

      Even if not, though, this is something to care about, because even if only rich people owned every stock share, it means that it makes less sense for them to invest in companies with excessive executive pay. This means that these hard facts of dollars and cents may lead them to sober the runaway inequality train. This is a good thing.

  •  Americans seem to have developed a sensitivity (5+ / 0-)

    to facts, reason, and that thing that supposedly allows us to put those things together and accurately predict the results (or at least notice what they were after the fact).

    The cited article uses Ellison, but almost any CEO, and virtually every billionaire fits the facts presented, perfectly.

    Nobody, including everybody, has ever earned a billion dollars. Money in that quantity is stolen, and the source of that wealth (all of the rest of us) suffers for it.

    What's the reasoning behind hiring a person to run the whole organization that insists on an agreement that ensures a massive payout if/when they fail?

    "Those who can make you believe absurdities can make you commit atrocities." - Voltaire

    by Greyhound on Tue Jun 17, 2014 at 12:06:15 PM PDT

    •  Agreed--if you paid me $200,000 a year (3+ / 0-)
      Recommended by:
      wilderness voice, hamjudo, Greyhound

      as CEO, I'd work like sixty to ensure that several of those years ensued.

      But a guy getting $15,000,000 a year? That's a DISincentive--who cares if you're fired after a year? Retire happily (or, more likely, end up minting even more money somewhere else, by starting a company with your money, investing it, etc.).

      •  especially if a fat severance package is part of (0+ / 0-)

        the deal

        •  Seriously! (0+ / 0-)

          I had a coworker once who won the lottery, to the tune of several million dollars. His co-worker said "he said 'oh, I'm not going to quit working here, though. I'll still be here!' And he was! For... hm... I think about six months. But then, after that, we didn't see him anymore..."

          I mean, haven't these people ever heard of the concept of FU money?

      •  Can I ask what you do now? (0+ / 0-)

        Because most CEOs work insane hours and are probably underpaid.  No, not the assholes who ruin companies and get golden parachutes and not the ones that spend most of their time on speaking tours and sitting on boards.  MOST CEOs are working 70-80 hours a week 52 weeks a year.  If you did that for $200K that would work out to about $70 an hour - before taxes.  I make more than that as an Army officer and while I am senior I am not at our CEO equivalent level.  

        For most high achievers its not really about the pay.  They have enough money to be comfortable for a long time.  The pay is simply an expression of what value they have to the company.  Do some companies get it wrong?  Darn right.  Is the gap between the top and the bottom obscene?  Absolutely.  But lets work on bring up the bottom instead of tearing down the top.  

        It is well that war is so terrible -- lest we should grow too fond of it. Robert E. Lee

        by ksuwildkat on Thu Jun 19, 2014 at 07:10:07 PM PDT

        [ Parent ]

        •  We aren't tearing the top down (1+ / 0-)
          Recommended by:

          We are attempting to reclaim stolen money from criminals. The real high achievers have nothing to worry about. Nobody is suggesting we put the bourgeoisie up against the wall. No one is coming after the mom and pop stores or the small business owners.

          We simply can not bring the bottom up without reclaiming the money that the criminal class has stolen. Trickle down has been proven, for decades, to be nothing more than a con, an excuse as to why the sociopaths are allowed to steal from us.

          The mom and pop stores and small business owners will all be helped immensely when we take from the thieves to give to the poor, because the poor will spend money at those mom and pop stores and small businesses.

          So unless you are a sociopathic con artist, you have nothing to worry about. We have, as a country, done this before, and it resulted in the biggest, richest middle class the world has ever seen.

          It's just one of those cyclic things in history. Every so often the ruling elite forget that they are only there at our sufferance, and we have to remind them of who is really in charge. Here in America, we know how to do that with democracy rather than the guillotine.

          Personally, I think offing a few of the elite every so often might be a good idea, as it tends to keep the rest of them from getting more stupid ideas. We could do it with a lottery, you get one ticket for every dollar of your net worth over, say, half a billion. If you win, we chop off your head.

          •  Advocating violence (0+ / 0-)

            is contrary to the policies of this site.  Advocating murder based on a lottery is despicable.  

            It is well that war is so terrible -- lest we should grow too fond of it. Robert E. Lee

            by ksuwildkat on Thu Jun 19, 2014 at 09:13:21 PM PDT

            [ Parent ]

            •  Oh please (1+ / 0-)
              Recommended by:

              They're the rich, it's not like they're people. Sociopathic monsters in human skin. They never think twice about killing us, why should we treat them like humans?

              You really took that bit that seriously? Liberals can't take a joke.  Yes, I'm laughing at you, not with you.

              But the rich DO need reminding who is really in charge, who is really important, which is all of us, together.

              A parasite that causes too much irritation gets removed, a good parasite knows its place and doesn't take too much from the host. As history shows us, that is a lesson the ruling class needs to learn over and over and over again.

              Yes, I was joking when I said we should off the rich. Not that I have any real sympathy for them, but it's been shown not to work very well. Causes more trouble than it's worth.

              If you're looking for sympathy for the devil here, you are barking up the wrong tree, mister.

              I'm not a liberal. I'm something far, far worse than that, I'm a socialist. I do not like the ruling class. I do not like the rich at all. Meritocracy? Yes, that's what all tyrants tell themselves it is.

        •  I'm sorry, but someone raking $15 million a year (0+ / 0-)

          while his or her janitor

          -- most of whom, I can guarantee you, also works 70-80 hours a week, 52 weeks a year --

          makes 7.25 an hour, while the CEO donates political money to lobby AGAINST minimum wage increases? That CEO IS tearing down the bottom by taking that extra money. $70 an hour? Do you know how FEW Americans make that much? I do just fine, and I'm well above the poverty level now, but I've never made that much in my whole life.

          Yes we SHOULD tear down those top salaries. It's not about wishing bad things on the people at the top--I don't, and I'd be happy for them to make a European-style 40 times what their janitor makes (as IF, come on, and please be honest, the janitor is lazing and working 1/40 as hard as the CEO). At that rate, that's... $290 an hour.

          You're not going to tell me that that's going to leave them in poverty. Nor, viewing the success of several, though not all, of the countries like Germany that have more sensible pay like that, will it tank the economy. The EU's GDP is almost exactly the same as ours.

          •  So hours = pay? (0+ / 0-)

            I know a lot of college professors who would not want that deal.

            Here are the simple economics:

            At the most basic level, all 7 billion of us have roughly equal amounts of pure, manual labor to sell.  So if you possess no skills other than moving your muscles, you are competing with a lot of people.  Supply is high, demand is less.  These are the lowest wage jobs.

            If you acquire a skill - carpentry, plumbing, machinist - you are trading skilled manual labor.  You are taking education and brain power and applying that to manual labor to create more value.  This requires a certain amount of analytic capability, problem solving and decision making and is therefore both more valuable and easier to "grade" - the difference between a good plumber and a bad one is pretty significant and relatively easy to determine compared to good ditch digger and bad one.  All this combines to make these jobs pay better because you don't want an untrained person doing the plumbing just because they have the muscle power to pick up a pipe.

            Moving up slightly more you have foremen and supervisors.  These are normally promoted from the skilled labor ranks.  Someone acquires skills to manage schedules and work projects as well as evaluate the work of others.  This requires much more decision making and analytical skill and much less manual labor but usually requires passing through the skilled labor gate to be able to know what right looks like.  Much smaller population, much higher wages compared to labor alone.  Often this also means longer hours.  While the skilled labor person is often time limited - you don't want tired eyes deciding some things - the reduction in manual labor requirement often means longer hours of brain labor.  This is why many of these jobs pass from hourly to salary.  Workers trade the benefits of overtime and the insecurity of wages based on time for the security of known income and the insecurity of unknown schedule.

            After this we are talking about gradations on trading knowledge for money.  I get paid about $75 an hour in direct compensation and about an equal amount in indirect or deferred compensation.  Not CEO pay but enough to be comfortable.  I am paid that much because of a number of factors including education (Bachelors, Masters and a series of professional schools), experience (28 years of doing what I do), and proven performance (evaluations annually at a minimum).  But guess what, I started at the bottom with just manual labor just like everyone else.  I invested in myself - school - and worked my ass off - performance.  I became an absolute expert in my field.  it is my PROFESSION, not a job.  Because of that, I am compensated as a professional.  Not many people are professional janitors.  That is not a good or bad thing, just a fact that it is not a professional field.  But some janitors decide they don't want to push a broom for minimum wage and start their own janitorial company.  They work like crazy, take risks financially and sometimes fail.  And sometimes they create global businesses like Moly Maids.  

            If you don't want to earn a waged based on how much physical labor you can produce, do something about it instead of yelling about how much someone else has achieved.  I look at the high achievers in my profession and I do not grudge them one dime of their pay.  I know what they had to do to get there.  I had the same opportunity and CHOOSE not to go that route.  I worked 60 hours instead of 80.  I took Christmas and Thanksgiving and some birthdays off.  My choice.  My life.  

            It is well that war is so terrible -- lest we should grow too fond of it. Robert E. Lee

            by ksuwildkat on Fri Jun 20, 2014 at 10:48:37 AM PDT

            [ Parent ]

            •  You seem to be assuming a LOT of false things (1+ / 0-)
              Recommended by:

              How are you assuming that people AREN'T "do[ing] something about it"? Or that significant percentages of those who do exactly everything you prescribe don't nevertheless don't even end up earning half of what you make? (Note: I don't say it's not possible, but you certainly haven't shown me data on people's attempts to improve their lot.)

              Also, you are missing a key part of what I'm saying: the RELATION between the CEO's pay and his or her janitor's, not just the level. If all of a certain company's employees earned a nice, comfortable middle-class living, and didn't live paycheck-to-paycheck so that somebody could pig it up and buy their corporate jet because God forbid they ever fly business class, then that's totally fine. I don't begrudge them that either. If the person at the top is acting like a pig and overconsuming when their employees ARE in poverty, or if they're even laying people off before they touch that precious CEO's salary, then you SHOULD begrudge them that; their employees built that person's business too, not just the one pampered little princess or prince at the top.

              •  Mostly in agreement (1+ / 0-)
                Recommended by:

                You will get no argument out of me that the gap between the highest and the lowest is obscene in most companies.  For the military, direct compensation is about 15X different between the newest Private and the highest General.  Include indirect and deferred and its about 30-40X.

                Lets say we allow private industry to pay 2 1/2 times more - 100X difference between lowest and highest.  If you are beyond that, you can't compete for any federal contract or be award a subcontract or otherwise receive federal moneys.  Lets say further that if 100% of your workforce is paid 200% of minimum wage or more, you can go 200X.  And lets say that if more than 90% of your workforce is paid more than than 400% (right now that would be roughly $30 an hour) you can go to 400% of $30 an hour.  That would mean that a "model" company with 90% of its workforce earning $30 an hour or more would be allowed to pay its CEO $24 million a year and still compete for federal contracts to otherwise receive federal dollars.  Thats a pretty decent compensation.  I would make exceptions for CEOs who are founders of the company - if you built it and own it you can pay yourself what ever you want.  But when you die or step down, same rules apply.  I would allow another exception for compensation with long vesting - 10 years or more.  Up to 100% of annual pay can be matched by stock with a 10 year vesting period.  If a CEO can perform for a period of 10 years in a way that stock options granted in year 1 are worth more in year 10, he/she has done a good job and should be rewarded.  So in theory the model CEO of the model company could receive $24 million in direct compensation and $24 million in deferred compensation.  Thats a pretty good deal.  Want to pay your CEO more?  Lobby congress to increase the minimum wage.

                As for people not improving themselves, I am sure there are some people out there who have done all the things and tried hard and nothing worked out.  But having sat on a number of hiring boards I can also tell you that some people make stupid decisions.  Like it or not, good or bad, right or wrong, when you apply for a job at a business that is 85% male and your degree is in Gender Studies (and you bring noting else to the table) don't be surprised when the hiring board says "discrimination suit waiting to happen" and never calls you back.  When you get told "(this thing) is the most important factor to our hiring hiring decision" and your response is "well I never really cared for (that thing) and I do things differently" don't be surprised when we don't select you.  When you apply someplace where physical and mental fitness is a really big deal and you are nearly morbidly obese and left your last job (which was pillow soft) because it was too high stress (and collected 2 years of disability), don't get mad when we don't ask for a followup interview.  Middle Eastern Ancient Literature may be a great degree to have if you want to teach but please don't expect me to hire you as a project manager in charge of a 15 year $50 billion modernization program in Saudi Arabia because of it.  99% of the time I see people not get hired for a job its because of choices they made.  Getting arrested for possession of crack was a choice.  Getting a worthless degree was a choice.  Getting an even more worthless Masters in the same subject was a bigger choice.  Getting fired from your last 7 jobs because you are a jerk is a choice.  Needing a job in a foreign country because you have outstanding warrants for your arrest in 3 states is a choice.  Don't expect me to put my livelihood in jeopardy because of your choices.  

                It is well that war is so terrible -- lest we should grow too fond of it. Robert E. Lee

                by ksuwildkat on Fri Jun 20, 2014 at 04:09:39 PM PDT

                [ Parent ]

                •  Your second paragraph is only anecdotal, but the (1+ / 0-)
                  Recommended by:

                  first is something I can work with. Neat that you can make such a detailed plan on the spur of the moment.

                  The second paragraph, again, I'm sure describes lots of people. However, what PERCENTAGE of the working public does it describe? Enough of them that we can say, "yep--if you're fallen on hard times, it's your fault 99% of the time [taking from your sentence, "99% of the time I see people not get hired for a job its because of choices they made"]"? I'm VERY skeptical of that. It might well be true; but I'd need to see a survey. Otherwise, for every person saying "they've all made bad choices," there are that many saying "no I didn't, thank you very much."

                  However, I like the "rising tide lifts all boats, and let's make a rule that ensures that" implied in your first paragraph. A decade and a half or two ago, a company head gave profit sharing to each of his employees, lowest to highest, in the amount of $150,000 one year (I don't know what he did in later years). The stunned employees were able to buy houses, save for retirement, whatever. Some tight-assed stockholders, who apparently really missed that $2.00 a share dividend that that cost them, gave the CEO grief about not using the money to benefit them, but he insisted "I've got to follow my conscience." Most companies these days are in such a panic to fellate their shareholders that they can't let ONE negative or flat quarterly earnings report go by. That's not individual choices; that's a system-level failure.

                  Similarly, on CEO pay, I like your scheme; I have also long plumped for a German-style system, where instead of only the wealthiest class setting wages, it is (I think) mandated by law that the working class must also be allowed a hand in setting wages. I think that's what ends them up with the lower income inequality (though theirs, too, is growing). But kudos for being able to articulate what seems to me a workable plan, off the cuff like that. Impressive.

                  •  Not exactly off the cuff (1+ / 0-)
                    Recommended by:

                    Its a discussion I have been involved with multiple times.  Im a big believer in market forces.  Businesses like Walmart have figured out how to pervert market forces by using federal aid as a wage subsidy.  Screw that.  If your workforce requires federal aid to exist, your business should be charged for it.  Further your business should be excluded from any Federal contract if your employees are paid less than a living wage.  It would hold up in court very easily.  No business has the RIGHT to a federal contract and the federal government is not mandating paying wage X.  In fact, I would be in favor of elimination of the federal minimum wage as long as it was replaced with rules excluding companies from federal contracts or federal contract awardees doing business with them unless their all employees were paid a minimum of 250% of poverty level.  For 2014 that would be about $29K a year or roughly $14.50 an hour.  Wow, right about what Seattle just mandated.  

                    Now imagine a company that tried to exist without the ability to compete for any federal dollars.  Tough but doable.  Now imagine not being able to do business with any company that was a federal contract holder…..oh nooooes!  Talk about a scarlet letter.  Hey Walmart, you can't sell any GE products until you raise wages.  Or any Disney products.  Or Apple.  Or HP.  Or Microsoft.  Or Heinz.  Or Del Monte.  Or Nike.  Oh damn now that you don't have a $1 million a store subsidy you have to actually mark up items normally and suddenly you are not putting every other retailer out of business.  Now the market forces are fair on everyone instead of some businesses being able to abuse workers and get away with it.  

                    CEO pay limitations would be the same thing.  Want to pay your CEO 750X what the lowest employee gets?  Have at it.  Just don't expect the taxpayers to do business with you.  And don't expect to do business with anyone who is in compliances with federal standards.  Oh darn.  

                    As for my observations, I have no doubt there are lots of people who are trying really hard.  I can just talk about the ones I know of personally.  On each of the hiring boards I have sat on we eliminated a significant portion of applicants for obvious lies on their applications or resume.  Choice.  Not staying current in tech areas is another easy flag.  Choice.  We normally tired to get to 5-8  people for face to face or phone interviews.  Some of the easy discriminators - insulting the board members (rarely works out), not showing up for your interview, taking another call (call waiting) in the middle of a phone interview.  All choices.  Oh and using our offer to get a better one from another business?  Yeah, we remember that and when you get laid off 6 months later and call us back to see if the job is still available we are not going to respond well.  

                    I have watched friends go on extended job hunts and while I felt for their difficulty I could also see some of the reasons they struggled.  Lack of marketable skills was the number one reason.  Unwillingness to "lower" themselves was a close second.  Swallow your pride and remove that chip and maybe someone will take a chance on you considering your "skill set" is all on paper with little real world to back it up.  Right after that comes work history.  Sorry but if you have a resume that lists a string of jobs with long gaps in-between and no logical reason for those gaps (like relocation, education, etc) then I am going to assume (usually correctly) that at some point you threw a fit and quit your last job.  Um…not what I want in an employee.  I have no desire to spend time and resources training you so you can quit 6 months later because you were having a bad day.  More choices.  

                    One of my all time favorite movies is "Dave" and its because of this line:

                    Dave: If you've ever seen the look on somebody's face the day they finally get a job, I've had some experience with this, they look like they could fly. And its not about the paycheck, it's about respect, it's about looking in the mirror and knowing that you've done something valuable with your day. And if one person could start to feel this way, and then another person, and then another person, soon all these other problems may not seem so impossible. You don't really know how much you can do until you, stand up and decide to try.
                    He is absolutely right.  But what goes along with it is paying a living wage because otherwise its the opposite of respect.  Paying someone $7.35 an hour today is all about saying "You are so desperate that I can make you work for nothing.  I can make you spend the first hour and a half just making enough to eat for a day.  I can pay you so little that you will never have enough to ever be able to work your way to something better."  I made more than $7.35 in retail in 1994 in Manhattan Kansas.  Democrats should make living wage regulation THE campaign issue.  We should use the power of the federal government to stop the exploitation of workers.  We should use MARKET forces to do it by rewarding companies that treat their employees well and excluding from federal monies anyone who chooses not to treat employees well.  We should reward companies that have reasonable wage structures and exclude ones who have unreasonable ones.  

                    It is well that war is so terrible -- lest we should grow too fond of it. Robert E. Lee

                    by ksuwildkat on Fri Jun 20, 2014 at 07:42:50 PM PDT

                    [ Parent ]

                    •  Well by God, I'm with that (1+ / 0-)
                      Recommended by:

                      "Democrats should make living wage regulation THE campaign issue"

                      (To be honest and strictly exact, I think there is nothing on earth more important than saving our natural environment, especially our over-fished and polluted ocean and fresh-water fisheries. But if they wanted to make living wage regulation THE issue, then that's close enough for rock and roll.)

                      On the interviewees' mistakes, those are a lot of egregious and awful ones. I know that there are a lot of people who fail to keep their skill sets up, and who lie on a resume (something I, for one, have NEVER once done on any resume). There is no excuse, especially for the latter.

                      However, I'd urge you to reconsider your take on gaps in resumes. There are LOADS of people with gaps in their resumes, for absolutely none of the reasons that you're assuming. People have babies, people experience Great Recessions, people experience Year 2000-2003 Recessions, people experience Year 1997 Recessions, people get laid off when their companies go under without warning... etc. I've known MANY such people. I think you're doing them wrong. (Caveat: you qualify your statement with "for no logical reason," so perhaps you're more lenient in practice for allowing for things than it seems here.)

                      But I like your ideas on living wage regulation, especially because the "level out the Walmarts-who-take-over-the-world-with-their-subsidy-help" part acts against monopoly, which is poison to free markets. I've often thought that monopoly, or at least cartelization, is an inevitable RESULT of free markets, because what does someone do when they make money in a free market? Why, crush the competition with the money, of course, by fair means, foul means and governmental means, courtesy of campaign financing. That is a problem, but your idea seems at first blush to be well-thought-out enough to make a dent in the cartelization problem, and simple enough that any loopholes written into the law will be obvious to any reader. Good ideas.

            •  (Wage data, BTW, gives the lie to your claim) (0+ / 0-)

              If you look up the average wages of those who have improved themselves educationally, at least, even most people with doctorates, let alone a master's or only a bachelor's, are making less than $100,000.

              You can even get a doctorate, and the vast majority of those who do will make nowhere NEAR what you make, let alone the folks you're defending who make far more. And a doctorate is no small feat of self-improvement--it's kinda just short of herculean, and takes many years.

              •  I know a bunch who disagree (1+ / 0-)
                Recommended by:

                tenured university professors
                bio chemists

                Now if your PhD is in English or Art or Literature or Ancient Greek or Philosophy and you are not teaching at a large university, I have no doubt you are struggling to find work.  Choices.  

                I have a Bachelors in Political Science and a Masters in Area Studies, Middle East North Africa.  I have knowledge that is in pretty high demand right now.  Has been for about 60 years.  Probably going to be for another 30-40.  After that?  Who knows.  Of course not many people would do what I have done to acquire that knowledge.  In fact I know most of them personally and believe me, not many people say "oh we envy you guys."

                Doctors have been doing well since….forever.  Lawyers have been doing well since…forever.  Engineers have been doing well since the 1800s.  Bio Chemists have been doing well since they invented bio chemistry.  Socrates was probably the last Philosophy major who really made bank.  Art majors…really?  It is soooo not a mystery what degrees pay well and what degrees are not worth the paper they come on.  

                Want to know who else makes good money?  Crab fishermen, underwater welders, machinists, tug boat captains, regular welders, HVAC technicians, cell tower repairmen, commercial scuba divers, etc etc etc.  Oh but wait, those are all H3 - hot heavy and hazardous.  Thats a lot of outside work and its hard and its hot and its cold and I have a degree and I am above that work and and and……The world is full of smart people who are too stupid to earn a decent living but who will look down on those too dumb to know that their good paying job is "menial".  

                It is well that war is so terrible -- lest we should grow too fond of it. Robert E. Lee

                by ksuwildkat on Fri Jun 20, 2014 at 04:31:54 PM PDT

                [ Parent ]

    •  Really? (1+ / 0-)
      Recommended by:

      Pretty sure Gates earned his.  So did Ellison.  So did Steve Jobs.  So did a lot of other people who took a ton of risks, worked their asses off and created something.  Facebook is a simple idea and others tried it before but Facebook got it right.  They worked and EARNED.  Lots of companies made search engine.  Most of them made them before Google.  Google made a better one and then worked like made men to make it better and better and better.  They earned it.  Elon Musk took a simple and very old idea - electric cars - and made them better than anyone else.  EARNED.  

      Just because you are not a driven high achiever don't bag on driven high achievers.  

      It is well that war is so terrible -- lest we should grow too fond of it. Robert E. Lee

      by ksuwildkat on Thu Jun 19, 2014 at 07:01:27 PM PDT

      [ Parent ]

      •  Musk made his money from selling PayPal. Tesla ... (0+ / 0-)

        Musk made his money from selling PayPal. Tesla is not the source of his original huge fortune. Jus' sayin'

        •  True but (0+ / 0-)

          He could have sat on his money and lived a comfortable life.  Instead he risked his small fortune to create a bigger one.  Could have lost it all.

          Steve Jobs took his very small fortune from Apple and created Next.  A few years later he bought what would become Pixar.  Both almost bankrupted him.  He funded Pixar with his own money while they developed the software to develop the process to run on hardware that didnt exist that would allow them to make the movies they had no way to distribute and every industry expert said no one would pay to see.  

          Tesla decided to sell luxury performance electric cars.  Show me one person in 2004 (when Musk came to the company) who thought there was a market for luxury electric cars.  Hell show me one person who thought it was a good idea to try to start a car company.  Lots of REALLY smart car guys have tried and all got cleaned out.  But looking back with perfect hindsight a smart person would have known in 1990 when California passed the Zero Emissions standards.  The state of California let everyone and their brother know that there was going to be a LOT of money made starting in 2003 on electric cars.  Here is your opportunity.  Not luck, plain as day announcement of how to get rich.  But most people won't work hard or take risks.  

          It is well that war is so terrible -- lest we should grow too fond of it. Robert E. Lee

          by ksuwildkat on Fri Jun 20, 2014 at 06:11:03 AM PDT

          [ Parent ]

      •  Gates (0+ / 0-)

        earned his by "reverse engineering" his original DOS. Then continued "earning" his wealth through the creation of a monopoly. The monopoly allowed him to greatly overcharge for his operating systems, hold various computer manufacturers virtual hostage, and buy off the Govt when they came after him on unfair business practices.

        But because Gates now has a great non profit that does great things, people have forgotten what an ass he was when he ran Microsoft.

        Yeah, not so good an example of "earning". Now if you had used Warren Buffet as an example...

        "Nothing travels faster than the speed of light, with the possible exception of bad news. Which follows its own special rules." ~ Douglas Adams

        by coyote66 on Fri Jun 20, 2014 at 12:06:58 AM PDT

        [ Parent ]

        •  nice story, but not true (0+ / 0-)

          Microsoft existed as a company and entered into a contract with IBM to produce a DOS.  Microsoft - essentially Gates, Balmer and a few others at the time - bought an existing product, made it meet the specs IBM wanted and delivered it.  IBM, with a ton of flesh eating lawyers, got outsmarted by Gates because they never had a vision for the PC Market and that allowed Microsoft to sell MS-DOS while IBM included PC-DOS (same product).  had IBM done the smart thing they would have owned PC-DOS and MS-DOS would never have existed.  The fact that IBM screwed it up again with Windows and OS/2 really demonstrates that IBM lacked vision and Gates didnt.  Often people ascribe to luck what is really just the ability to see potential.  Gates, like Steve Jobs, could see things and say "that is where we are headed" and get in front of the wave.  Most people can't do that and just think they are "unlucky".  

          Microsoft "created a monopoly" by being better, not by gaming the system.  At the time MS-DOS was initially marketed there were LOTS of competing operating systems (I used and liked DR-DOS).  By the time Windows rolled around there were even more competitive products including one by IBM (OS/2).  I used Windows 1.  It was awful.  So was Windows 2.  But 3.0 got it right (well righter.  It was still a POS compared to MacOS.  I wrote thousands of PIFs while cursing Gates and wishing I had a Mac) but even then most people ignored it.  It wasn't until Windows 3.11 - Windows for Workgroups - that allowed easy (well, easier) access to the internet that you saw developers really look at Windows as an environment instead of a front end.  Windows 95 is where the operating environment really took off and gave people a reason to stop using DOS as their primary environment.  

          All of the practices that the government would later make Microsoft stop came AFTER Gates had already created a multi billion dollar company.  Until Windows 95 there was a significant risk that someone would produce something better and Microsoft would be toast.  Some of us have been around long enough to remember that Wordstar owned the word-processing market until they failed to see the rise of the GUI and got crushed by MS Word.  No vision.  People used to use 1-2-3 to mean spreadsheet until Lotus failed to deliver updates and got crushed by Excel.  Poor management.  Harvard Graphics was PowerPoint before PowerPoint but they too missed the GUI jump and got crushed.  No vision.  Doing well because you work harder is not a vice.  No unfair gaming of the law or commencer rules or predatory pricing gave Microsoft almost total control of the consumer operating system market, consumers did.  And I write all this as a hard core Mac user who would rather gnaw off my own arm that use Windows in any form, who loved Wordstar and thinks PowerPoint is the source of much evil in the world.  Doesnt mean Gates didnt earn his billions.  He did and he did it by out working and out smarting everyone else.  The fact that his departure from the company as a day to day leader coincides with its decline into a "normal" multi-billion dollar company that just maintains its place by inertia tells you how important he was to the company.

          It is well that war is so terrible -- lest we should grow too fond of it. Robert E. Lee

          by ksuwildkat on Fri Jun 20, 2014 at 05:56:28 AM PDT

          [ Parent ]

          •  Microsoft apologist ignores the obvious... (0+ / 0-)

            Microsoft practiced exclusivity, a monopolistic practice that locked vendors and consumers into their services and products.

            But the most glaring faults of Microsoft products were it's lack of ease of use, robustness and security.

            They didn't solve those problems soon enough allowing Apple to forge ahead.

            One troubling aspect of Microsoft was their blacklisting of journalists and tech writers, a Nixonian type list, of those who were "okay", "sketchy" or "needs work." If you were in the last two lists, you were locked out of Microsoft's PR and tech information and were marginalized.

            •  Wow that is a first (0+ / 0-)

              Never been called a Microsoft Apologist before.  Guess you missed the part where i don't use Microsoft products willingly.  Check that, I love the Age of Empires series, played a ton of Rise of Nations and Dungeon Siege.  I use Word and Excel because they are great tools.  I prefer Keynote to PowerPoint.  If Apple could get Pages to do bibliographies right I would use Pages instead.  Numbers is good but not Excel.  

              Now as for exclusivity, it perfectly legal.  As a photographer I have entered into an exclusivity agreement with a company to sell my pictures.  I get paid more for shooting exclusively with them.  Perfectly legal.  When you consider that Apple, IBM and others always offered options besides MS products, its had to say they had a monopoly.  What got MS in trouble was browsers.  Once they started engineering Windows to break competing browsers they got in trouble.  Guess what - IE is no longer the dominate browser.  As for journalists - if you have to rely on the good will of the company you are covering, how can you call yourself a journalist and not a company shill?

              It is well that war is so terrible -- lest we should grow too fond of it. Robert E. Lee

              by ksuwildkat on Fri Jun 20, 2014 at 08:09:36 AM PDT

              [ Parent ]

          •  How many (0+ / 0-)

            small competitors did MS buy out and shelve what were better (than MS's) products? You mentioned Dr. Dos, it was a great dos. Unlike MS-DOS it wasn't memory hungry, it didn't require restarts to free memory; an issue that Winders still has. (Well, unless you buy a 3rd party product that "cleans" memory.) Yes, exclusivity isn't necessarily a bad thing. But when you own 80%+ of the pc market and you force pc manufacturers to only sell your product or be left out, that's not exactly fair market. Remember MS Java? Sun Crushed them on that. But only because they were and still are a big company. If they had been a small start up, they would have either been pushed out of the market, or bought up. And we would be stuck with MS's crappy version of Java.

            So where exactly did Gates get his vision for GUI? Oh yea, APPLE. I suppose seeing what your competition is doing and copying them is a kind of vision.

            Remember Mechwarrior/Mechcommander series of games? Those were great games. Then MS bought them. They produced an awful  game, a couple of good games; then decided to turn the series into a FPS for the RedRingofDeath. And thus the series died. Vision.

            I despise MS, it's almost to a point of waving a red flag at a bull kind of hate. But as I can't afford to buy a Mac, and finding equipment that isn't Plug and Pray so I can use some version of Linux; I'm stuck with MS. At least I can still use Mozilla as a browser. And you seem to have forgotten the most popular version of Winders is XP, which MS recently stopped supporting. Vision.

            "Nothing travels faster than the speed of light, with the possible exception of bad news. Which follows its own special rules." ~ Douglas Adams

            by coyote66 on Fri Jun 20, 2014 at 08:39:49 AM PDT

            [ Parent ]

            •  Still not illegal (0+ / 0-)


              Buying our competitors is an age old business strategy.  Most of the time you buy them out to incorporate their product into your business.  Sometimes you do it to "knife the baby."  In any case, remember that no one forced those companies to sell.  

              As for Gates copying Apple, Apple copied Xerox.  Granted Apple made it better but they still lifted entire concepts.  And what most people don't know is that way back in 1997 when Microsoft "invested" $150 million in Apple there was a much smaller announcement in the fine print.  Apple and Microsoft agreed to bury the hatchet over that whole GUI stealing thing.  Microsoft paid Apple over $1 Billion in 1997 dollars to do so.  Apple turned that $1 billion into the iMac and the iPod.  Microsoft also agreed to keep producing MS Office for Mac - something that was worth MORE than $1 billion.  

              And getting back to your Java comment, it was that same agreement that knifed MS Java for good.  Microsoft agreed to make their Java/javascript compatible with Apple's and Apple essentially turned to Sun and said "give us a Java standard."  Because of the agreement MS was legally bound to accept one Java.

              I never bought the "Macs cost too much" line even when I was dirt poor.  When you compare total cost of ownership, Macs have always been cheaper for me.  I have never had a Mac that lasted less than 5 years of hard use.  Not one.  The Mac I am typing on is 3 years old and showing no sign of age.  On the other hand I have never had a Windows laptop (forced to use at work) last more than 3 years before being worthless.  

              XP was a great operating system but it is a security nightmare because of Internet Explorer 8 (read more here -  Bottom line is that XP is ancient in computer terms.  They stopped supporting it because it needed to die.  My father in law worked at IBM for decades and ended up doing a ton of contract work after he retied because of Y2K stuff.  A couple of clients kinda gave him shit because he "should have written it right the first time."  His response back was "so you are mad that the software I wrote in 1970 was so good that you are still using it 28 years later and still want to use it for a few decades more and now you are angry because you have to pay for an upgrade?"  Had they upgrade once or twice in 28 years they wouldn't have Y2K problems.  Can you imagine if someone got mad at Ford because the F150 they bought in 1986 wasn't capable of being converted to a plug in hybrid for $500?  Thats kinda like being mad at Microsoft for not supporting XP any more.  

              It is well that war is so terrible -- lest we should grow too fond of it. Robert E. Lee

              by ksuwildkat on Fri Jun 20, 2014 at 10:12:54 AM PDT

              [ Parent ]

              •  I'm typing this on an (0+ / 0-)

                IBM ThinkPad. They call them Levnovo Thinkpads now. It's a tank, more than 20 yrs old; it just won't die. Though the battery won't last more than 5 min anymore. lol I can't upgrade past XP; this just doesn't have the memory to do it. And I'm not sure I can even buy it anymore for this. Wouldn't want to if I could anyway. The drive has been "whacking" for about ten years now. That sound is the read/write heads making physical contact with the surface where the data is. I expect it to die any time now. But I've been expecting that for 10 years now. This poor olde thing struggles if I open too many DKos pages. Or leave FireFox open too long. Poor thing. XD

                Knew about the IE problems, IE seems to always have problems. Didn't know about the Apple/MS GUI settlement. I figured it was like their reverse engineering DOS. Different enough as to not infringe copyright. Knew about the Java settlement. Was working for Gateway at the time of Y2K so I knew all the background on the why it was a potential problem.

                "Nothing travels faster than the speed of light, with the possible exception of bad news. Which follows its own special rules." ~ Douglas Adams

                by coyote66 on Fri Jun 20, 2014 at 10:16:52 PM PDT

                [ Parent ]

  •  Shareholder ROI (4+ / 0-)

    Fortune Magazine used to do a yearly article (I don't know if they still do this) where they compared the performance of companies (grouped by industry) based on ROI to shareholder.  

    In pretty much every industry there was an inverse relationship between executive (CEO and COO) compensation and shareholder ROI.  This was pretty constant during all the years I was following Fortune.

  •  No surprise here (1+ / 0-)
    Recommended by:
    wilderness voice

    Anyone with an MBA could do what these guys do for 250k a year, easily. Hell, my daughter's BF has an MBA and I can guarantee you he'd be thrilled to death to do it for a quarter of that and I'm sure he's not alone. It's ridiculous.

  •  Thanks! As a shareholder looking for investment (3+ / 0-)
    Recommended by:
    wilderness voice, hamjudo, dfarrah

    opportunities, I will take this into account, and vote with my dollars. Others will follow.

    Oh, and Larry Ellison, if you're reading this: I'm just HEARTBROKEN that San Francisco is losing the America's Cup, but if you quit rigging it so that only you can take part in it, I'll write my representatives and ask them to bring it back.

    Though then, of course, it will be an actual contest, instead of a rich child changing the rules so that he always wins Candyland, whatever you think that's proving to anybody.

  •  When Steve Jobs died . . . . (1+ / 0-)
    Recommended by:

    . . . .  It took Apple only a couple of hours to name a replacement, and Apple has been doing just fine without Steve ever since.  The most worthless person in any company is the guy in the CEOs office.  But his ego demands the biggest paycheck.  Pity.  The real work of the company gets done at the bottom layer -- the peed-ons.

    •  Actually, Steve Jobs hand picked Tim Cook (1+ / 0-)
      Recommended by:

      and worked with him for a long time before he passed away to instill his "Apple philosophy" into him.

      I agree that CEOs of large companies are almost universally overpaid, but someone like a Steve Jobs or a Tim Cook certainly isn't the "most worthless" person in a company. All people have worth, but these guys have to make decisions that affect thousands of worthwhile people. Rumor is that at least a few CEOs try to make decisions that are both good for the company and the employees (such as Costco). Having that translate down the line through the middle managers is often something else, however. I know there is a lot of intense stress among the Apple Store employees no matter how good the products.

      No one is worth what some of these CEOs are paid, however. What has developed is sort of a good-old-boys club of CEOs that serve on Boards of Directors for each others companies and make certain that they all are doing extremely well by voting for inflated salaries and they all make out like bandits...which they are.

  •  Ha ha makes me think of (1+ / 0-)
    Recommended by:

    the Peter Principal. People are promoted to their level of incompetence.

    A true craftsman will meticulously construct the apparatus of his own demise.

    by onionjim on Thu Jun 19, 2014 at 05:43:52 PM PDT

  •  Who cares? (1+ / 0-)
    Recommended by:

    WTF is this fixation here at Daily Kos with how much CEO's are paid?

    Who the flying fuck cares?

    These are public and private companies with boards that grant these pay scales.  The investors, in the case of the public companies, seem to be just fine with it.

    The jealous rages that spew from these diaries are, quite frankly, uncanny.

    It's none of your business how much these corporations pay their CEO's.. none of my business.

    If they paid them less, do you think these funds would somehow magically make their way to the masses?

    Do you think the workers at Oracle are being paid slave wages?  Really?  Do you even know how well paid Oracle workers are?

    I just don't get it.

    It's striking how many elaborate justifications the corporate world has produced for higher CEO pay without looking rigorously at the results
    Since when did you think they need to justify anything to you?
    •  Did you read the story? (3+ / 0-)

      We care because, as investors, this solid science tells us what our guts have been telling us: CEO pay does not get us better returns, it comes out of our returns.

      Nobody is "spewing jealous rage." What an odd thing to say just based on the article and comments. I'm sure there must be more to the story of your emotional reaction here, perhaps you could enlighten us?

      The science seems pretty clear: firms that pay their CEOs less give better returns to investors. This is the opposite of what we have been told.

      And we have been told, the owning class do seem to feel the need for justification, perhaps so they can con more suckers out of their investments.

      I put the question back to you: why do CEOs, the wealthy elite, and the ruling class feel the need to feed us a pack of lies about higher CEO pay giving us better returns?

      In case you do not care to answer, I give you my theory: they do it to transfer wealth from the many to the few, and they have been remarkably successful at it over the last thirty years. This lie has been part of it. It has worked, but perhaps now that we know the truth, it won't any longer.

      If the lie ceases to work, then the market will correct for CEO over payment as investors take money out of firms that pay their CEOs out of the investor's own returns, and into firms that actually give profits back to the owners, i.e. the investors.

      •  Simple solution,... (1+ / 0-)
        Recommended by:
        JJ In Illinois

        ...simply don't invest in companies that pay whatever you consider to be excessive salaries to their CEO. This research suggests this would cause you to pick more successful stocks - so perhaps it's a good signal to avoid investing in a company. If CEO wages were capped, you would lose that signal which would make investing harder for you.

        No one is forced to invest in any company. In fact, no one forces anyone to be an "investor".

        True, if you choose to invest in your company 401(k) and it's not a good plan, you may have relatively few choices and most of those choices may include funds/ETFs including companies with excessively highly paid CEOs. However, every 401(k) I've ever participated in offered a money market or bond fund which insures that you're not investing in stock of a company who overpays their CEO.

        I don't buy the conspiracy theory that there is a specific goal to transfer money from the many to the few. A much more likely explanation is that almost everyone would rather have more, rather than less, money. Some of this desire arises from the desire to consume more, some from the fact that in our society money tends to infer status, and some from the fact that the amount of money one has is a way of "keeping score" in business circles.

        When a good, highly paid, employee asks me for a raise, I don't assume that she's doing it out of a goal to transfer money from her less well paid colleagues to her because she is wealthier and they are less wealthy -- I attribute it to simple human greed that almost everyone has.

        •  Your logic is flawed (0+ / 0-)

          It's not a "signal" it's a con. Confidence games are illegal.

          Your logic would be to legalized con artistry and fraud because without it, we lose a "signal" as to what to avoid.

          Or murder. How will we know who the murderers are if we outlaw it? If there's no blood dripping from their hands, how will I know to avoid them?

          We could make this form of confidence game illegal if we wanted to. It would not impact our freedom in a negative way. We would be more free if we policed this sort of antisocial behavior, rather than encouraged it.

          The most important thing though is just to make sure this research gets out there, and that everyone has these facts on hand to use against the con artists and their sycophantic followers. Now, anytime someone tells me that high CEO pay is necessary, I can refute them with facts!

          On that we can agree, right?

          •  Where's the "con"? (0+ / 0-)

            If published analysis proves companies that pay exorbitant figures to a CEO underperform, then don't invest!  How much more simple can it get?

            But, other comments reveal Oracle is a really bad example.

            •  Still flawed logic (0+ / 0-)

              "If published analysis proves someone has murdered before, just avoid them! How much more simple can it get?"

              "If published analysis proves someone has raped a child before, just don't let your children near them! How much more simple can it get?"

              This is what you sound like to me. You sound like someone who thinks child rape should be legal.

              •  Ok.. you are officially (1+ / 0-)
                Recommended by:

                an idiot in my book.

                If, to you, investing in a public company that is required to publicly reveal all of the stuff you object to is like child rape, then you, sir, are a fucking idiot.

                •  Ad hominem, the last resort of feeble minds (1+ / 0-)
                  Recommended by:

                  I wondered how long it would take you to go there.  I honestly thought you'd last a little longer than that. Disappointing.

                •  Not just an idiot (1+ / 0-)
                  Recommended by:
                  JJ In Illinois

                  but also in violation of site policies.  What is disgusting is that not only did no one HR his post advocating violence and murder, someone uprated it.  

                  Some people would rather complain that the world is against them instead of doing anything to improve themselves.  Some do it out of laziness, some ignorance, some both.  

                  It is well that war is so terrible -- lest we should grow too fond of it. Robert E. Lee

                  by ksuwildkat on Fri Jun 20, 2014 at 06:16:45 AM PDT

                  [ Parent ]

                  •  Having a sad, are we? (0+ / 0-)

                    Awwww, poor dear. Does it hurt?

                    The world is not against me, silly boy. The world loves a winner! And I am indeed winning. Tyrants beware, your days are numbered.

                    I know what you are, ksuwildkat, and why you are here. We keep a little list.

        •  Oh yes. The invisible hand of the market will c... (0+ / 0-)

          Oh yes. The invisible hand of the market will correct things. Sure...

  •  May be they picked the wrong CEO to pick upon?? (5+ / 0-)

    Larry Ellison owns 25% of Oracle, he takes $1 salary per year (that is $ one), and  he gets no bonuses .  He gets stock.

    Pension plan advisory company CtW Investment Group led the campaign against Oracle's say on pay measure. Most companies must put their executive pay packages up for a vote before shareholders, but CtW said Oracle is one of just nine companies listed on the Russell 3000 stock index to have failed both of its say-on-pay votes in the past two years.
    "By refusing to address long-standing pay concerns, Oracle directors have failed investors and utterly lost their support," said Dieter Waizenegger, executive director of the CtW Investment Group, in a prepared statement. "Any further foot dragging and Oracle risks a real governance crisis."
    Oracle declined to comment. But in a letter to CtW on Oct. 1, Oracle General Counsel Dorian Daley noted that Ellison's salary is $1 and that he receives no bonus. Daley said Ellison's stock grants "put his compensation in direct alignment with Oracle's shareholders."
    Despite the vote, shareholders reelected all of Oracle's directors to another year on the board -- including the entire compensation committee.
    Still, it may be understandable why some shareholders don't think Ellison deserves the huge pay package this year. Shares of Oracle have sat out this year's explosive market rally.

    The article has a flaw - it mentions Nasdaq, where Oracle (Orcl) is traded on the New York Stock Exchange.

    And the article is out of date: Oracle is now 30% higher than it was as year end 2013 because 2013 represented the time period where Oracle was getting rid of the many unprofitable Sun products (an acquisition), and marrying the Oracle software to the Sun hardware.  The 30% increase is a craziness of the casino that is Wall Street, and the probable overestimation of the worth of cloud computing (that last is my idea).

    The day is coming when a single carrot, freshly observed, will set off a revolution. Paul Cezanne

    by sailmaker on Thu Jun 19, 2014 at 05:46:37 PM PDT

    •  shame on you for citing facts.. (2+ / 0-)
      Recommended by:
      ksuwildkat, nextstep

      we don't do that here!

      The front page diarists do not care about facts.. they find an article that agrees with their ideology, and they run with it!

    •  It's also odd... (1+ / 0-)
      Recommended by:
      ksuwildkat pick Oracle as an example.

      Right off the top of my head, I can't think of another modern company whose existence is defined by one leader (who, incidentally, put up over ½ of the initial capital from his own pocket) who took the company from nothing to a market cap of $190B over almost 40 years. Ellison has survived through many crisis and always managed to pull the company back up. Yes, he is a world class jerk -- but that's irrelevant to this discussion.

    •  Yeah, Ellison is a bad example (2+ / 0-)
      Recommended by:
      ksuwildkat, cville townie

      He's a miserable excuse of a human being, but he did have a hand in building Oracle into a major corporation.

      Better example of overpaid CEOs have been mentioned in the comments to this diary: the CEO of McDonalds, HP, & Toyota. (When was the last time Toyota introduced an important & successful product or innovation?) Just off the top of my head, I'd mention the CEOs of the major banks, & Telecommunication companies.

      Naming bad examples only give the corporate suck-ups & yes-men a way to excuse this injustice.

      •  Meg Whitman (0+ / 0-)

        is a GREAT example of an overpaid and BAD CEO.  But she was left off just like she was left off the other post by Ms. Clawson comparing male CEOs and female CEOs pay.  Her bad example for male CEOs?  Ellison.  Hmmmm….maybe someone has an axe to grind against Ellison while also making sure an example that doesnt fit the narrative gets left out.  

        It is well that war is so terrible -- lest we should grow too fond of it. Robert E. Lee

        by ksuwildkat on Fri Jun 20, 2014 at 06:21:12 AM PDT

        [ Parent ]

  •  Larry Ellison (2+ / 0-)
    Recommended by:
    llywrch, Tonedevil

    is a predatory individual. He presides over what is apparently a sweatshop there at Oracle, and has engineered hostile takeovers that have ruined "victim" companies.

    He's running up quite a karmic tab.

    It's here they got the range/ and the machinery for change/ and it's here they got the spiritual thirst. --Leonard Cohen

    by karmsy on Thu Jun 19, 2014 at 05:47:22 PM PDT

    •  There are many other software companies Oracle's (1+ / 0-)
      Recommended by:

      employees can readily go to if they are not happy.  Oracle has a reputation for being one of the highest paying software companies.  

      The most important way to protect the environment is not to have more than one child.

      by nextstep on Thu Jun 19, 2014 at 07:33:05 PM PDT

      [ Parent ]

      •  At what personal cost to employees? nt (0+ / 0-)

        It's here they got the range/ and the machinery for change/ and it's here they got the spiritual thirst. --Leonard Cohen

        by karmsy on Thu Jun 19, 2014 at 07:44:54 PM PDT

        [ Parent ]

        •  I give people credit for having enough judgement (1+ / 0-)
          Recommended by:

          and intelligence to make the personal tradeoff between working at different companies for different compensation.  

          Not all work environments are right for all people.  Many people who work at Oracle have a "hard charging" work hard for strong pay personality, and would work similarly at many other companies.

          The most important way to protect the environment is not to have more than one child.

          by nextstep on Thu Jun 19, 2014 at 09:31:39 PM PDT

          [ Parent ]

      •  Nonsense. Produce facts and statistical substan... (1+ / 0-)
        Recommended by:

        Nonsense. Produce facts and statistical substantiation not just hearsay

  •  Thanks for this. (0+ / 0-)

    The cult of the ceo as promulgated by the elite business schools has led to the decline of US industry and severe difficulties for US society.

    Potentially leading to the destruction of the republic itself.

    And I am Kilrain of the 20th Maine. And I damn all gentlemen. Whose only worth is their father's name And the sweat of a workin' man Steve Earle - Dixieland

    by shigeru on Thu Jun 19, 2014 at 05:51:27 PM PDT

  •  Unless the CEO created the company (2+ / 0-)
    Recommended by:
    llywrch, birdboy2000

    I find it fascinating that say the CEO of McDonalds or the NFL gets paid anything more than a few 100K. Why? They didn't create the fucking product. All they do is keep the politicians and wall street happy. How hard could that be?

  •  One word... (1+ / 0-)
    Recommended by:


    Ellison is a pig. Google Mark Hurd, and all the other HP CEOs. It's a case study for feeding at the trough while long time employees got thrown to the street.

    CEOs don't earn salaries. They are awarded lotto tickets. Winning lotto tickets.

    What is so unnerving about the candidacy of Sarah Palin is the degree to which she represents—and her supporters celebrate—the joyful marriage of confidence and ignorance. SAM HARRIS

    by Cpqemp on Thu Jun 19, 2014 at 06:01:28 PM PDT

  •  FuckYeah! (4+ / 0-)

    I remember 15 or so years ago when I was being "groomed" for executiveness being told that CEO skills were so rare that the corporation that employed me had to "compete" for the "talent" by offering ever increasing "competitive" salaries.  Meanwhile, I was pissed that they were offering me a $40k bonus that year, but were making it pretty clear that the bonus was contingent on my limiting the raises for the workers to less than $0.50 per hour.  Those were workers who were making sure the power plants I had oversight of kept the lights on regardless of the weather, the lack of funds for maintenance, the disregard with which visiting dignitaries (can you say executive management?) treated them.

    I stood up for the folks who cared about making electricity. Needless to say, I was ultimately deemed ill-groomed and un-groomable.  It was WAY untidy to suggest that income should perhaps be more equitably distributed.

    If you don't like it, attack the message, not the messenger. The former may convince me that I am wrong, but the latter will always convince that I am right.

    by nancyjones on Thu Jun 19, 2014 at 06:12:30 PM PDT

  •  You can tell he's highly paid, he can still (0+ / 0-)

    afford a watch.

    For context, most people I know have to rely on their phones for telling what time it is.  Which means that the NSA knows every time they check the time of day, the horror, the horror!

  •  Minimum wage (2+ / 0-)
    Recommended by:
    llywrch, Decorina

    Can the SEC mandate a minimum wage for publicly traded companies (separate from the normal federal minimum wage)?  Shareholders often never see a single one of "their" employees. It's easy for companies like McDonalds and WalMart to pay their employees poverty wages because they don't have anyone sticking up for them, all the while aggressively chasing higher and higher profits. They don't talk to the employees who need food stamps and Medicaid to survive.  We should demand respectable living wages for their employees.

    •  IANAL, but I think the short answer is No. (0+ / 0-)

      It's not under the SEC's jurisdiction to set wages.

      But there are plenty of unions and other activists who are indeed speaking up for low-wage workers, and there are many different campaigns, locally, state-wide, and nationally, for an increase in the minimum wage.

      I agree, it can't come too soon. I don't see those changes happening via the corporate boardrooms, however, except in very limited cases.

      Welcome to Daily Kos. If you have any questions about how to participate here, you can learn more at the Community Guidelines, the Knowledge Base, and the Site Resource Diaries. Diaries labeled "Open Thread" are also great places to ask. We look forward to your contributions.
      ~~ from the DK Partners & Mentors Team.

      Support Small Business: Shop Kos Katalogue If you'd like to join the Motor City Kossacks, send me a Kosmail.

      by peregrine kate on Thu Jun 19, 2014 at 07:54:10 PM PDT

      [ Parent ]

  •  See sig line. nt (1+ / 0-)
    Recommended by:

    "The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness." John Kenneth Galbraith

    by LeftOfYou on Thu Jun 19, 2014 at 06:33:43 PM PDT

  •  More on Ellison (0+ / 0-)

    Especially how he lives off his shares without liquidating them.

  •  Please stop using Ellison! (1+ / 0-)
    Recommended by:

    There are lots of great examples but Larry Ellison is not one of them.  

    He FOUNDED Oracle.  its HIS company.  He owns more than 25% of it.  That means 25% of his pay is him paying him.  And since he took most of his pay last year and used it to buy more Oracle stock, he spent his pay on the company.

    Oh and all he has done is double investors money over the last 5 years.  That roughly a 14% ROI every year for 5 years during a massive economic downturn.  

    Please do just a tiny bit of due diligence.

    It is well that war is so terrible -- lest we should grow too fond of it. Robert E. Lee

    by ksuwildkat on Thu Jun 19, 2014 at 06:56:37 PM PDT

  •  These guys are so fucking egotistical... they (0+ / 0-)

    just love being in charge. They would do it for much less if only there wasn't somebody else making more because thats how they keep score.

    The modern conservative is engaged in one of man's oldest exercises in moral philosophy;the search for a superior moral justification for selfishness

    by CTMET on Thu Jun 19, 2014 at 06:59:05 PM PDT

  •  Oracle announced a huge profit shortfall today (0+ / 0-)

    after the market closed.  Look for it to drop like a stone tomorrow.

  •  Several major problems with the study. (2+ / 0-)
    Recommended by:
    WillR, ksuwildkat

    I read this study as an economist.  There are several very important factors that are not adjusted for in the study.  I don't know what would be the final impact from the following adjustments on the study's conclusions.

    I do think there are instances of excessive CEO compensation - Ray R. Irani  when he was CEO of Occidental Petroleum is my favorite example of excess.

    The first major problem is that some CEOs are founders, or very early employees, that have such a large share of the the company's stock that even high CEO compensation is small compared to the gains they make in stock appreciation.  It is not uncommon for their total compensation in cash to be less than $1 million, sometimes much less, with no compensation from options.  Well known examples of this include Gates from Microsoft, Page and Brin at Google, Dell, Musk of Tesla, Buffett and Jobs.  These types of instances should be excluded from the study, as the way the CEO gets compensated for their efforts is overwhelmingly from their stock ownership and they see themselves as being the best person to run the company and improve their investment.

    If Warren Buffett, who's only compensation from his company, Berkshire Hathaway (he makes $485,000/yr)  was offered a double in pay by some other company he would not take it, because he thinks his billions of wealth in Berkshire stock will grow faster if managed by himself as its CEO.

    The second problem comes from the strong tendency for stocks that significantly outperform the market in one year tend to underperform the following year.  As the bulk of what the authors call over compensation is from stock options, this boom year of stock followed by far lesser years parallels what happens with CEO pay as expected.  The study should factor this behavior in stock prices and resulting option compensation.  I would not be surprised to see, this effect being the bulk of the effects the authors discuss.

    The third problem comes from what poorly performing companies do when they hire a highly regarded "star" away from another company.  The problem in hiring the star is that they have tens of millions locked up in stock option value that have not vested yet.  In order to get the star to leave their current successful and well paid position, the troubled company needs to essentially guarantee the payment of value equivalent  to what they leave behind.  The result is a poorly performing company with a high paid CEO, who also gets a large payout if he is later fired.  Sometimes these stars succeed in a turn-around (when Steve Jobs was rehired at Apple is a top example), while there are also many cases when the star did not succeed.

    I also have a questions on the impact from the two large stock market declines for the time period on the study.

    The most important way to protect the environment is not to have more than one child.

    by nextstep on Thu Jun 19, 2014 at 07:28:16 PM PDT

  •  Techies (0+ / 0-)

    Why are these tech guys so weird looking??

    Boycott WalMart; Boycott Papa Johns; and Boycott BP

    by truthronin on Thu Jun 19, 2014 at 07:50:39 PM PDT

  •  What a racket (1+ / 0-)
    Recommended by:
    Dennis 12

    The CEO Club justifies their high salaries and compensation because it ensures their best performance and huge profits.

    The racket is that when they don't perform, they still receive their huge compensation and salaries.

    While workers, whose productivity has risen, see their low salaries stay the same or become smaller.

    And this is the norm of corporate culture.

  •  Junk study... (1+ / 0-)
    Recommended by:

    Since most of the over-compensation is derived from stock appreciation (as has been noted elsewhere) the study should look at the performance in the three years BEFORE the compensation was incurred, not after.

    A CEO is going to exercise their options or stock rights only after there is a gain to realize, which means they are effectively being paid for performance already performed.  They are not incurring this compensation in anticipation of performance, which is what this study looks at.

  •  I would like to see their report in its entiret... (0+ / 0-)

    I would like to see their report in its entirety. It appears another corporate myth is exposed for the lie it is. GOOD WORK!!!

    The only way Capitalism will work in any society, is if and only if, there is consistent regulation and strong enforcement. With out the necessary regulation and enforcement, the out come in every case is corruption and exploitation by the rich and powerful, at everyone else's expense!

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