Bargain CEOs, hogs and value destroyers

so narrow-minded and short-term focus...

just because the cruel oil price went up around 50% in 2005 resulting in market value gains in all energy stocks, it doesn't mean that Lee Raymond has done a good job for Exxon shareholders. In fact, I would bet that the Exxon would still deliver $87.1 billion stock value gain even if Lee told a 1-year sabatical.

On the other hand, Lew Frankford at Coach is not a "hog" in my opinion because he chose to exercise his options that were granted YEARS earliers and resulted in a large 2005 compensation. In fact, the only way to realize a big option gain is to deliver growth and market value gains in the long term (over 3 years - 5 years). In fact, Lew continues to deliever the growth in Coach. The market cap of Coach is now larger than Sara Lee, its former parent company before Coach was spun off and had an IPO. Talk about growing shareholder values!!!.

Also, that type of short-term focus method of evaluating CEOs performance will only drive CEOs to make short-term decisions and to manage a company based on meeting quarterly earnings expectations. Why would you want that???

Dan

CEOs almost across the board are greatly overpaid. They appoint friendly boards of directors. Why are they paid so much? Because most argue that is what another CEO is making!??! Add up the pay, combine it with perks plus stock options and you have truly OBSCENE pay packages, most of which should be going to investors.

So what's the proper gauge of a CEO's worth? How long of a time span do we sample to gain a proper perspective of performance?

Does it really matter?

I have no problem with multimillion dollar pay packages... except when the CEO is the only one making any money. The problem here, in my humble opinion, is that these revenue gobblers had better be living up to expectations or else it's time to send them down the road. These guys (and I'm disappointed that they're all guys), need to be held strictly accountable for what they're doing. I mean short term accountable. If I was holding the purse strings on these guys who are "flipping the levers", when my company failed to perform based on their direction I'd have these geek's backed into a corner and I'd be demanding to know "Where are my profits and market share!?!"

Each of the rest of us are expected to provide a certain level of performance for our employers. Isn't that so? These megadollar game players deserve no less than the same kind of scrutiny that the rest of us get. Not withstanding any inital pay packages at time of employment and the obvious performance enhancing incentives, I think a CEO's pay should be based on end results.

Pay commensurate with performance. Anything wrong with that?

.

THE TIME HAS COME TO STOP THE GREAT GIVE AWAY TO CEO'S.OPTIONS DILUTE MY SHARES. GIVE CASH BONUSES WHEN DESERVED. SALARIES OF CEO'S ARE ALREADY EXCESSIVE.GOLDEN PARACHUTE GOODIES SUCH AS COUNTRY CLUB MEMBERSHIPS FOR LIFE,SECRETARIES,LIMOUSINE AND PRIVATE AIRCRAFT SERVICES, AND LIFE LONG PENSIONS ARE OBSCENE AND WITHOUT ANY JUSTIFICATION. LET'S STOP THE FLEECING OF AMERICAN CORPORATIONS AND START PROTECTING SHAREHOLDERS FROM OVERPAID CEO'S AND DIRECTORS WHO AUTHORIZE RETURN OF THE ROBBER BARONS.

Anyone who has spent any time with the CEO of a major corporation knows that these people live a different life than most of us. They trade off many things we take for granted to perform at this level.
Most of the other employees at a typical American company don't work at anywhere near this level and are therefore not paid the same money.

Compensation is a private matter betwen stockholders and management. Obviously there are bad CEO's, as there are bad bankers, mechanics and dentists. Find one who isn't a thief.

It is all well and good to tie a CEO's compensation to performance, but how do you compensate the guy who takes a drowning company through a nasty Chapter 11? Stock price? That's ridiculous. Maybe he should be compensated if the stock is still trading.

The CEO's I know perform at a level most of us are not able to maintain. That's why they get hired. Let's stop throwing all CEO compensation into the same trough and start looking at the individual and what they are doing.

Mr. LeSueur,

I couldn't agree with you more. But let's be realistic, these men deal on a different level because they are, after all, in a different world.
That doesn't make them any less accountable for their choices.

The first and foremost responsiblity of an administrative director is to install beneath themselves individuals who can get the job done. A CEO should never be expected to be all to everyone. That's not their job. The level of stress a CEO experiences is directly dictated by his/her choices in support staff. Any CEO who can't go to the golf course and completely forget (for a while) that he's heading a multi-million dollar corporation is, in my opinion, doing a poor job of underpinning himself.

The flip side to this is the angle which justifies those inflated pay packages. When the day of justification comes and everyone weighs the truths of performance, the CEO stands alone. It's his job on the line. What we're saying here is that with a few dozen million already stashed in the bank, we're afraid that more than a couple CEO's just don't care.

Tie their success into the success of their share holders... that's all we ask. If you look historically you'll see that for the outstanding performers that's the way it's always been. If you give most anyone the option of being rewarded directly for goals realized, in my experience that always pays dividends. That's exactly why Google has structured their bonus package the way they have.

"Give us the meat and 'taters... we'll provide the gravy"

That's Google's stance and I dare say it's working.

.

I have not problem when CEO perks are based on PROFIT. Remember PROFIT. The price of of stock in a fickeled thing. Up one day and down then next. Pay based on price is only great for shareholders who plan on being non-share holders soon.

How can any CEO sleep well at night knowing that the bottom half of his company's workers are barely making ends meet? Spread the wealth,dude. You can't take it with you.

I think a more appropriate measure might be spanning the years that the CEO has been with the company. In the case of Lew Frankfort of COH (I am a former employee) I'm sure that extending the time period measured would catapult him to the bargains.