Bill Gates said on Wednesday he believes Wall Street pay is “often too high” and that U.S. government ownership of American International Group Inc worries him because it has devalued the giant insurer.
The billionaire Microsoft founder, who retired in 2008 to concentrate on philanthropy, blamed a 1993 U.S. law that capped executive salaries at $1 million and warned that further bids to try limit Wall Street pay could also backfire.
“It was a bad milestone in controlling executive salaries when that $1 million cap went on,” Gates told a discussion on philanthropy at the 92nd Street Y cultural and community center in New York City.
“The compensation problem is a very interesting problem. I do think compensation is often too high, but it’s a very tough problem to solve,” said Gates, who was also ranked by Forbes on Wednesday as the 10th most powerful person in the world.
The $1 million limit on salaries encouraged companies to instead give executives lucrative stock options, sending pay to vast new heights.
Reuters – Nov. 12, 2009:
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What prevents companies from issuing ridiculously high stock options in addition to ridiculously high pay?
Nothing.
#1–Dallas–restrictions on total compensation. Easy Peasy.
No–the ONLY FAIR/FREE MARKET/SOCIALLY RESPONSIBLE/AND GOOD BUSINESS COMMON SENSE PLAN IS:
Make executive compensation a multiple of average non-executive compensation. This will provide pressure to compensate employees who actually do contribute to company success and acts to level the wage disparity/corruption.
KNOW THIS: When you motivate people/CEO’s by appealing to GREEEEED you get CEO’s and DECISIONS/CORPORATE DIRECTION/GOALS motivated by greed and not long term company health.
There are many more deep rooted issues at play here than simple minded LIEBERTARIAN/standard “free market” stupidities.
By the way, does anyone actually “know” if corporations are a per se violation of free market principles? Are there different schools of thought on that???? I can see arguments/accomodations made both ways. At its simplest level, “markets” are supposed to be about “people.” As in real people.
and the solution is, put a limit on all executive compensation… 🙂
I think there should be transparency for top executive pay, more than we have today. Also should be some basic rules on BODs.
That said, SN’s kettle isn’t a good match here IMO…Gates started the company from nothing, he wasn’t just some hired gun with a bunch of pals on the BOD.
-bobbo
Seeing as how corporations are regulated government licensed entities, I’d say yes.
Why would you need to hide behind the corporate veil anyway? The *market* should decide.
I guess we’d better disband all the corps too. In the name of freedom.
#6–tcc3==thanks for your tone of general agreement, but to be honest, I can’t tell “anything” from your post.
I think “corps” are not “anti-freedom” or inconsistent with such notions per se. There are even good rationale reasons to have them. They just tend to be “rich” and money corrupts everything it touches including corps/ceo/politicians/religious types===”everyone.”
The key though is they are legal creations, those rules can be changed at any time, and they actually do exist to SERVE society. BOD’s have authority/role to somewhat perform the duties of protecting society by protecting the corporation/shareholders/employees but that role is “not enforced” and not rewarded and has become totally corrupted. We need BIG CHANGES, and the subject is not on any agenda. The downward spiral will continue.
Sorry to be confusing bobbo. Read the above tongue-in cheek. I was being sarcastic about militant libertarianism and how any regulation or government interference kills orphans.
Bill can say that because he’s too big to fail.
>a multiple of average non-executive compensation.
Encourages them to fire the lowest wage employees.
Who determines need?
Who determines too much?
All you who think someone is making too much money, I want you to walk into your boss’s office, right now, and demand a pay cut.
The best way to lead is by example . . .
Capping exec salaries doesn’t mean employees down the mail room will get raises, and that over-all the poor will be cut a break.
The real issue is when bad companies who aren’t making a profit (and I don’t mean not meeting expected profits, which a lot of CEO’s will mark that as a non-profit quarter when they still made profit).. the company is about to lay off workers, and close other locations, they end up taking a larger income for them selves rather than investing it back into the company to help out.
Greedy fucks.
#11–Liberty Loser==hah, hah. You never miss a chance to look stupid. So consistent. How does myself taking a pay cut lower my bosses motivation to make bad corporate decisions because they advantage him personally?
Can you even follow a thought from start to finish or is it Knee Jerks all the way down????
Mike, its interesting how you can be just as dumb as a LIEBERTARIAN. Are you a LIEBERTARIAN or just that stupid? Could you tell the difference?
Bring back the STEEPLY PROGRESSIVE INCOME TAX !!! The ONLY WAY to curb CEO LOOTING – ON WALL STREET AND ELSEWHERE !!! Didn’t Elvis pay 90% back in the “Golden Fifties” ?
I’d be all for Pay based on Merit. While were at it, lets do the same for politicians. Like if they can solve problems rather than just blame the other guy. Neither will ever have integrity they’re Both are on the level of pedophiles and lawyers as far as I’m concerned.
Competition is the answer! As in: “You pay your CEO too much! I could do a better job for 85% as much, and here’s my job history to prove it!”
I wonder what would be the effect of _everybody’s_ pay being public record?