Executive Pay Backlash?

Discussion in 'General Trading Discussion' started by GiltEdged, Apr 22, 2016.

  1. GiltEdged

    GiltEdged Active Member

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    If you follow the news, there seem to be a lot of shareholder unrest at the huge pay packets of some CEOs. For example, at Anglo American, 41% of shareholders voted against a pay rise for the CEO, which came in the face of dividends cuts and a huge fall in share price. BP had 59% voting down the payrise for the CEO. AstraZeneca has more shareholders rebelling this morning.

    (Meanwhile the CEO of the Co-op took a voluntary 60% pay cut and had to fight objections to do it - Guardian 7th April)

    Not all of these votes are binding and some CEOs will be paid anyway but even so the objections are coming from the large shareholders with the power to remove CEOs they don't like, so it might make a few people at the top aware they need to pick up performance. Are major share holders, particularly the large corporates, going to start demanding accountability or that top execs' pay may get capped?

    It would be a major market change if that happened, but I can only think it would be a good thing that a CEO's pay should be performance-linked like everyone else.
     
  2. pwarbi

    pwarbi Senior Investor

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    The bonuses and pay that the CEO's of certain businesses get as been headline news for a long time, but nothing seems to have changed.

    Here in the UK, this as been a big issue with the banks especially, and they needed tax payers money to bail them out and keep the bank afloat, but then they paid the CEO of that bank a 25% bonus that amounted to about a quarter of what they'd borrowed off the government...how can they justify that?
     
  3. remnant

    remnant Well-Known Member

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    What I find scandalous is that most CEOs take a fraction of the company's gross salary . This may demoralise other staffers especially in lower cadres in the technical departments. The variance in the salary structure should not be so large as for one individual to earn 20 times of someone else way below the pecking order who is putting his best for the company. Most CEOs only sign up for several hours before making for the gold course or, is it?
     
  4. crimsonghost747

    crimsonghost747 Senior Investor

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    Most of the CEOs do have performance based pay already but yeah I do agree that the overall compensation is too much in a lot of the cases. Then again I do realise the value of a good CEO and with large companies it might just be worth paying the CEO a lot of money to keep him around if he is doing things right.

    So yeah, I agree that in general the pay not just for CEOs but also for other executives is too high but there are exceptions. This year I've voted both yes and no multiple times when it has come to the executive compensation changes in the companies which I own.
     
  5. Corzhens

    Corzhens Senior Investor

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    I've heard that Yahoo is already selling due to diminishing revenue every year. I guess the executives of Yahoo is now experiencing pay cuts because of the dire situation their company is in. And if I remember correctly, their CEO had already resigned. It is good if a big online company would buy Yahoo and continue its operation. But if there is no buyer then it might close shop and leave thousands with no jobs. My personal question is what would happen to the yahoo mail if it closes? Will it still remain or what?
     
  6. crimsonghost747

    crimsonghost747 Senior Investor

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    They will find a buyer, one way or another. If the company won't be sold as a whole then they will surely be selling the pieces one by one... some might not get sold and just vanish but I'm sure there are a lot of companies interested in the smaller parts of yahoo.
     
  7. pwarbi

    pwarbi Senior Investor

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    Whatever happens to Yahoo, I'm sure those in charge won't be too much out of pocket and they'll make sure of that first no doubt. If that means the company dissolves and is never heard of again, the fact they'll have a few more million in the bank each is all they're concerned about.
     

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