CEO Pay & Market Performance

[dawgball]

Cuban always has interesting takes on things. Sometimes he is a little much, but this is a good one.

http://www.blogmaverick.com/2008/09...owns-why-they-will-happen-again-and-again-an/

Excerpt:

Which is exactly why we need to re-establish a link between risk and reward in public companies. The first step should be the following law:

If the government must step in and provide any sort of financing or guarantees for any part of a public company's business, then all officers and directors lose all rights to severance pay and all outstanding vested or unvested options or warrants immediately become canceled. In the event the CEO of such corporation is not fired, but instead chooses to step down voluntarily, then the last 12 months of earnings is considered to be an interest free loan which the CEO must pay back over no more than a 10 year period.

 

[BobbyBlueChip]

"As long as we pay CEOs with lottery tickets, I mean stock, that they don't have to pay for, risk and reward will be decoupled. As long as that is the case, you can count on many a future bubble and meltdown and there is absolutely nothing anyone can do to stop them."

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Whether you pay them in stock or cash to go buy the stock. the benefits are the same. That's a horrible conclusion that he came up with.

I agree with him about stock options - no reason for a CEO or board to not take on great risks. In my niche, stock and options are used becuase there isn't enough available cash, but there was never any downside to taking on these deals.

Liquidating Lehman's is going to cause a severe strain, but there is still a ton of Capital out there right now contrary to what the news reports say. The major issue is none of it's domestic.

 

[djv]

Can't blame folks right now for this type of thinking. Just heard about how board members of Lehmans vote them self a raise of 50000 up to a total salrey of 250000. This was done 6 months ago when stock holders were getting it in the butt. And the board had to know things were not up to snuff. This board mts 6 times a year to earn there money. If all true it's just nuts. And now since they did such a good job Lehmans goes down.

 

[StevieD]

Can't blame folks right now for this type of thinking. Just heard about how board members of Lehmans vote them self a raise of 50000 up to a total salrey of 250000. This was done 6 months ago when stock holders were getting it in the butt. And the board had to know things were not up to snuff. This board mts 6 times a year to earn there money. If all true it's just nuts. And now since they did such a good job Lehmans goes down.

This will go on and on as long as some people worship these crooks like they are curing cancer or something.

 

[AR182]

This will go on and on as long as some people worship these crooks like they are curing cancer or something.

yeah stevie..there's something not right when the ceo's get hundred's of million $$ while these companies that have financial troubles....i hate when the gov't steps in to regulate the private sector, but there should be some kind of investigation....& regulation...