Investing Advice

Corporation Executive Pay

If you think the CEO of the companies whose stock you own are paid too much, and the wasted money should be paid as dividends, forget it (unless you happen to own millions of shares).

All corporations have a board of director’s executive-pay committee to set the CEO’s salary and bonus. They pay a huge sum to an outside consultant to be sure that their company is keeping up with what other companies pay.

  • So what is the result? From 1990-2000:
  • Minimum wage up 36%
  • Auto workers up 37%
  • Secretaries up 41%
  • New York teachers up 20%
  • Average big-company CEO up 442% ($13.1 million average)
  • CEOs who laid off over 1,000 workers in 2000 averaged $23.7 million in salary and bonuses.

What is going on here?

  • Ford Motor lays off 35,000 workers in 2001, CEO Jacques Nassar gets $23 million in pay and bonuses
  • Disney lays off 4,000, Michael Eisner receives $72.8 million
  • Cisco lays off 8,500 workers, John Chambers gets a 40% increase in pay to $28.7 million
  • WorldCom fires 6,000 people, Bernard Ebbers got a $10 million bonus.

They get away with it because they’re greedy and they can.

Other Stock Market Basics Topics:

  1. Stock Market Basics
  2. Why invest in the stock market?
  3. Why Sell Stock?
  4. How are shares bought and sold on the NASDAQ?
  5. How stocks are traded on the New York Stock Exchange
  6. What are ECNs?
  7. Supply and Demand
  8. American Stock Exchanges
  9. International Stock Exchange
  10. What fuels demand for a stock?
  11. More to Know About Stock Trading
  12. Limit Orders
  13. Market Capitalization
  14. Preferred Stock
  15. How to Buy Stock?
  16. How much money do you need to open a brokerage account?
  17. Money Market Funds
  18. Margin Loans and Investment
  19. Corporation Executive Pay
  20. How much money do you need to open a brokerage account?

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