Purpose of any Company is Profits - screw the workers

[sugarpop]

They didn't restrict the bonuses there either?

Good grief. I really hope Congress decides to cap how much pay anyone in this country can make as an executive. It is the only way to rein it in.

[TheMercenary]

Originally Posted by sugarpop

They didn't restrict the bonuses there either?

Good grief. I really hope Congress decides to cap how much pay anyone in this country can make as an executive. It is the only way to rein it in.

That would be good? You want the government to control the private market? Be careful what you wish for.

[tw]

Originally Posted by TheMercenary

That would be good? You want the government to control the private market?

It should not be necessary. But something changed. Boards of Directors no longer represent the interest of stockholders. That is their job. But many companies have subverted their Boards for the benefit of management and at the expense of all others.

For example, a CEO (president) should never be Chairman of the Board. Chairman represents stockholders. His job is to keep the CEO in line. In troubled company after company, the CEO is also the Chairman.

For example, Robert Allen of AT&T perverted the Chairman's function. Fiorina of HP also had too much power. Same with Akers of IBM.

Stunning is how much information was denied outside Board members in GM. For example, much financial information available to insider board members was withheld from outside Board members. Outside Board member were limited to how long they could study the financials - ie 45 minutes.

Executives should answer to the Board - not be the Board. Having perverted the function, executive compensation has skyrocketed at the expense of employees and stockholders.

One stunning example was AT&T. The CFO quietly whispered to Sandy Weil (an outside Board member) that AT&T could not meet its short term debt payments. That is about the most chilling fact in any board room. However AT&T was literally on the verge of complete meltdown before any outside Board members realized that AT&T was only months from complete disintegration. That also would never happen if executives truly answered to the Board.

AT&T continued to disintegrate while richly rewarding executives. Therefore all that was left was a mobile phone operation using obsolete frequency division multiplexing and the name. AT&T's remains were purchased only for the name - while its Board remained completely ignorant of the destruction.

Today, the Chairman too often is the CEO. #1 symptom for trouble. Nobody represents the stockholders. Executives simply reward each other.

[xoxoxoBruce]

Originally Posted by tw

snip~ Outside Board member were limited to how long they could study the financials - ie 45 minutes. ~snip

Without honest accounting practices it wouldn't much matter.

[tw]

Originally Posted by xoxoxoBruce

Without honest accounting practices it wouldn't much matter.

Originally Posted by lookout123

Each and every person is free to believe they are worth more. Some people just decide to do something with that belief.

So that corporate president (after too many beers) said to me, "Jason makes the accounting say what it has to say."

Some people did decide to do something with that belief - especially when there is no chairman and independent Board of Directors representing stockholder's interests.

Management that must work for their stockholders (and customers) must have honest accounting and have pay packages restricted to reasonable amounts. With so many companies where the executive is also Chairman of the Board, no wonder highest paid executives are also running some of this nation's worst performing companies. No wonder spread sheet games are now routine and acceptable.

Anyone ready yet for big steel running to the government for protection? Symptoms are there.

Meanwhile, because he was doing good for GM, Rick Wagoner got a 34% increase in 2006 and a 67% increase in 2007. Wagoner was both the CEO and the Chairman of a Board that approved those pay packages. GM's outside Board members were heavily restricted in what they were permitted to know. Again explains why executives are so grossly overpaid (and not held responsible for the resulting disasters).

Raping a company is now acceptable. Then blame union workers for being overpaid. You even saw some in The Cellar agree. But how many noticed nobody to represent stockholder's interests - now the even the SEC was denuded.

[classicman]

Originally Posted by sugarpop

They didn't restrict the bonuses there either?

OMFG - Are you serious? Please do a little looking into this. They paid out more in bonus's than AIG in retention payments.

Originally Posted by sugarpop

I really hope Congress decides to cap how much pay anyone in this country can make as an executive.

I think that will be the end of America as we know it. I'd be hard pressed to think of a worse thing that could happen.