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Tones
Lv 6
Tones asked in Business & FinanceCorporations · 1 decade ago

Fellow stockholders how is it that we're approving our company's CEO's to get outragious bonuses that?

diminish shareholder wealth???? I ask this because I am trying to understand how is that CEO's are getting outlandishly high salaries. How is it possible that a CEO can come in a company (i.e. Shearson Lehman Brothers) and in less than a month receive a "severence package" of millions? Is the press exaggerating this? If not, that means the shareholders agreed to this at some point right? Why would a board of directors allow a company's equity to diminish by millions like that when it clear undermines shareholder wealth?????

Update:

Just to clarify, the first answerer seems to have a very insensitive response as if she were glad I was suffering. Quite sad that a stranger would have such a hateful opinion of someone she doesn't even know. But this is a free country. I am a firm believer of "freedom of speech" even if it's quite sad that someone would wish such negative and hateful things on me.

But to clarify the context of my question, I was asking it hypothetically. Sure I am technically a shareholder because I have a 401-k plan (but of course it's conservatively diversified to alleviate the risk of extreme losses as are being seen), but really, the purpose of this question is to look at why corporate CEO's are getting paid inhumanely large sums of money for doing absolutely nothing. The scary part is that the shareholders (many innocent americans who have a very minor interest in the corporation, some employees who have their entire life savings invested in it) seems to have approved this unfair deal.

Update 2:

Other points of clarification on the first answer:

"fellow shareholders, huh? You are the very people that enshrined this new kind of economy."-->No, this isn't a "new kind of economy." It's actually been around for quite sometime. Read up and you'll see that.

"While you were doing all right you didn't mind these obscene salaries, severance packages, golden parachutes. But now you are screwed and you suddenly see that the imbalance is frightening."-->haha, I'm not doing all right and never have. Without a financial advisor, everyone who participates in the stock market is "screwed." I just diversify because the "dot.com bubble" screwed me in the past.

"Too little concern too late my friend."-->haha! so fatalistic!

Update 3:

Most of us outside your little world of stock trading have seen this as wrong for decades.

<<HAHA!!! My little world. I ask a question about CEO's getting bonuses and that makes me "living in my little world." What would "living in a big world" be? Taking a bitter outlook on everything and being sardonic?" If that's so, I'd rather be in a little world.

Funny now that you have to share the pain, you feel the outrage.

What pain??? This is just money. I'm just researching facts that have been presented to me and was hoping for an interesting discussion.

You get none of my sympathy.

Why would I want your sympathy? Was the yahoo question: "I am suffering will you please give me your sympathy???" Damn, you're such a "tough love" kind of a......"friend."

You're a funny one....hahaha! Given how much I'm laughing now, I must reaaaalllly be suffering!! hahah!

Update 4:

Ok, ok, ok , ok we're getting somewhere.

To my "first answerer" and so far, only answerer. Let me warn you about being an "anticapitalist radical": Radical beliefs make one's world even smaller than a shareholder who spends all day trading. When you have a radical belief, you assume that those contrary to you are your enemies. Not an easy ideology to be a part of. Have you seen the documentary "La Sierra" about the crisis in Columbia between gangs of people supporting right extreme and left extreme ideologies??? Sure things are bad in the US, but should it get to a point where Radical Ideologies are in control of soceity, there will be bloodshed. Would you really prefer that over a staggering economy in a democratic society? I don't think so, or at least hope that's not what you believe in because remember: in a radical society, free speech takes a back seat to the ideology in command and control of "the people." Dang it...we're digressing here.....

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    fellow shareholders, huh? You are the very people that enshrined this new kind of economy. While you were doing all right you didn't mind these obscene salaries, severance packages, golden parachutes. But now you are screwed and you suddenly see that the imbalance is frightening.

    Too little concern too late my friend.

    Most of us outside your little world of stock trading have seen this as wrong for decades.

    Funny now that you have to share the pain, you feel the outrage.

    You get none of my sympathy.

    ---

    edit: I am insensitive? No. I was layed off from a job I had held for fifteen years. I served with distinction in my company, brought my employers a lot of business, worked with my fellow staff members to keep the company going...

    I was layed off before my profit share came to fruition... three months before. The employer than proceeded to screw me for thre more years over the pitiful little amount I did have secured in that account.

    I have seen the mentality at work. So many layed off for the stockholder's benefit... so many employers in utter contempt of the very people who made their businesses porfitable.

    It turned me from an optimistic pro-capitalist to a very determined anti-corporate radical. I am delighted to see this economy fail. I will delight in seeing CEO's lose their golden parachutes... indeed, to see many of them put in prison.

    I don't believe in this crummy system and I honestly think that if millions suffer right now because the system is collapsing, that is a better thing than the continuance of this corporate fascist state.

    Sorry if you are hurting. But after I lost my job, I didn't hear much sympathy from 'investor' type people for the jobless...

    in fact, quite the opposite. We were told in so many gestures and hints that we should die off to make way for the younger generation.

    I genuinely hate what America has become since Ronald Reagan.

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