Ever notice that while everyone else's pay is going down, CEO pay is going up? There's a reason for that: they cheat.
When compensation committees (typically made up of other CEOs and their buddies) figure out how much execs should get paid, they typically create a "peer group" of similar companies, and use that information to determine how much their CEO should get paid.
The problem is the compensation committees cherry-pick the companies in the peer group, selecting companies like 3M that pay their execs more:
Indeed, 3M Co. was the most popular "peer group'' company in corporate America in 2011. It was included in the compensation analysis of 62 U.S. firms -- more than any other company, according to Equilar, an executive compensation data firm.
Although companies use a variety of factors in selecting peers, high CEO pay plays a factor.
"Why is the company so popular?" asks Carol Bowie, head researcher for the Americas group at Institutional Shareholder Services (ISS), a proxy advisory firm. "There could be a variety of reasons, but it is certainly notable that [former CEO George Buckley's] pay was high relative to other peers.I guess CEOs, like the children in Lake Webegon, are all above average.
4 comments:
Reminds me of the stock pools of the 1920s. Oh, and juris? This would be two more ways that the wealthy fuck people over.
Everyone knew that you could lose money in the stock market in the 20s - just like you couldn't lose money on real estate more recently.
Funny how this executive compensation scam reaches to public universities. Maybe not UM, but certainly both the UC and CSU systems have been paying better pay than President Obama makes. Surely you don't mean to suggest that those university presidents are overpaid?
For CEO compensation, as much as you might not believe it, but the stock-based pay was considered a corporate reform 20 odd years ago. Management theorists were concerned that without the right incentives you could end up with U.S. Steel (the poster boy of your Golden Era of Capitalism) happening all across the economy.
Dammit - that opening sentence is profoundly missing a "not" - as in could not lose money.
Whose pay is going down? Where? How?
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