Anyone switching to a credit union with what's going on?

[J T]

This is somewhat off topic, but I found this interesting, a news piece from some time ago about the CEO of costco's pay vs his employees. He makes 12 times as much as a floor worker. It's still a lot, but much less disparate than probably almost every other company. (http://abcnews.go.com/2020/Business/sto ... 779&page=2)

Yeah, that's commendable compared to the norm:

[MrPopo]

A caution. It looks like the graph JT linked is overall compensation, and the ABC article specifically calls it as salary. I know the late Steve Jobs had a salary of $1 and got a shitton of Apple stock to make up his overall compensation.

[J T]

A caution. It looks like the graph JT linked is overall compensation, and the ABC article specifically calls it as salary. I know the late Steve Jobs had a salary of $1 and got a shitton of Apple stock to make up his overall compensation.

Good point. The ABC article mentioned that the Costco CEO had an additional $150 million in stocks.

Here's the article I linked from with the graph:
http://www.epi.org/publication/webfeatu ... _20060621/

It does explain "CEO pay is realized direct compensation defined as the sum of salary, bonus, value of restricted stock at grant, and other long-term incentive award payments ".

[MrPopo]

Yeah, stock is the easiest way to increase the overall compensation of an employee. As I understand it, it costs the company very little and as long as the company does well it pays out big for them. When I joined Amazon I got a signing bonus in stock, and the price at the time was 70-80/share. Now it's 240.

[opethfan]

Feels good to be Canadian. Our banks are much more stable (and more regulated, thanks to Paul Martin as finance minister, although the Tories are now cashing in on his success) and here in BC we have the largest credit union in Canada:

http://www.vancity.com/

[dlmvii]

A caution. It looks like the graph JT linked is overall compensation, and the ABC article specifically calls it as salary. I know the late Steve Jobs had a salary of $1 and got a shitton of Apple stock to make up his overall compensation.

Good point. The ABC article mentioned that the Costco CEO had an additional $150 million in stocks.

Here's the article I linked from with the graph:
http://www.epi.org/publication/webfeatu ... _20060621/

It does explain "CEO pay is realized direct compensation defined as the sum of salary, bonus, value of restricted stock at grant, and other long-term incentive award payments ".

True - my fault, I should have noticed or realized. I know it's done (or was done for this reason, maybe not so anymore) because taxes on stocks are less than direct income, so you can still make money, but skirt around giving more to taxes (see - Steve Jobs' $1/year salary)

However, I think stocks as a form of compensation is understandable for a higher up since it's value is dependent on the company's performance, and executives typically (in theory, anyways. We know this is not always true...) have the most to do with how well a company's stock is doing.

[Hatta]

I understand your sentiment here, but how about this counter example. The economy is doing great, joblessness is at an all time low, then by dumb luck you end up getting into a terrible car accident and are no longer a viable member of the workforce. Again, if you're rich you probably can support yourself and the care you require, while anyone who isn't rich (it's not even poor in this case) is doomed. I see us as having two options; the first is that the state subsidizes you and ensures you can live until you die (or be made a viable worker again). The other option is to let you fail.

And? What's the counter example here?

This point really irks me, because they weren't rewarded for failure. They didn't get a bonus for fucking up the market.

Being rewarded despite failure is not materially different than being rewarded for failure. In either case the incentives are completely fucked up.

Golden parachutes are a compensation for no longer making annual CEO money.

And if you fuck up as bad as many of these CEOs have, you don't deserve CEO money, you deserve jail.

They're in place long before any of these problems

Yes, and they were almost certainly part of the cause of the problem. If a CEO knows that whatever happens he's going to walk away with a huge pile of cash, what incentive does he have to do a good job?

Saying they were rewarded for failure implies that the board got together and said "Man, this guy totally fucked up things. Let's give him money to reward him!"

If you remember, these companies fought hard to be able to pay out these bonuses. With cries of "we can't retain top talent without top compensation", under the inexplicable assumption that the people who drove the country into the ground are somehow "top talent" and deserved to be retained instead of jailed.

Or they'd say "Contract law! We're bound by law to pay out these bonuses". And then a few short weeks later "we have to renegotiate contracts with labor to stay solvent!". Bullshit. Fucking bullshit.

[MrPopo]

I understand your sentiment here, but how about this counter example. The economy is doing great, joblessness is at an all time low, then by dumb luck you end up getting into a terrible car accident and are no longer a viable member of the workforce. Again, if you're rich you probably can support yourself and the care you require, while anyone who isn't rich (it's not even poor in this case) is doomed. I see us as having two options; the first is that the state subsidizes you and ensures you can live until you die (or be made a viable worker again). The other option is to let you fail.

And? What's the counter example here?

Your example was that people can get screwed because some business man tanks a company. My couner was people can get screwed because the fates don't like them. Both cases point to the fact that without a huge amount of money you're always at risk of financial ruin, so saying that our current economic system is flawed because of the thread of financial ruin is a fallacy.

This point really irks me, because they weren't rewarded for failure. They didn't get a bonus for fucking up the market.

Being rewarded despite failure is not materially different than being rewarded for failure. In either case the incentives are completely fucked up.

And I think that's a fair stance to have. I'm personally neutral towards it, but at least that says to me "I understand what happened, and I disagree with it" rather than the traditional misconception people like to perpetuate.

They're in place long before any of these problems

Yes, and they were almost certainly part of the cause of the problem. If a CEO knows that whatever happens he's going to walk away with a huge pile of cash, what incentive does he have to do a good job?

If he does a good job he makes a huge pile of cash every year. If they're as driven by raw greed as you posit then they'd rather stay in place and earn the super big bucks rather than fail and only get the big bucks.

Saying they were rewarded for failure implies that the board got together and said "Man, this guy totally fucked up things. Let's give him money to reward him!"

If you remember, these companies fought hard to be able to pay out these bonuses. With cries of "we can't retain top talent without top compensation", under the inexplicable assumption that the people who drove the country into the ground are somehow "top talent" and deserved to be retained instead of jailed.

I'd argue it was the average consumer who drove the country into the ground. The banks just facilitated it.

[o.pwuaioc]

Your example was that people can get screwed because some business man tanks a company. My couner was people can get screwed because the fates don't like them. Both cases point to the fact that without a huge amount of money you're always at risk of financial ruin, so saying that our current economic system is flawed because of the thread of financial ruin is a fallacy.

People could die because someone murders them. People could die because they happen to be unlucky and have a terminal cancer. Therefore saying that a system which permits people to murder is flawed is a fallacy.

[dlmvii]

I'd argue it was the average consumer who drove the country into the ground. The banks just facilitated it.[/quote]

This is a good point. Predatory lending practices certainly contributed to this, and the terms on these loans are ridiculous. However, people still took them. Over and over and over again. The same situation with credit cards, which still baffles me that there are people my age (and I am still fairly young...) who've taken on huge debt because they needed something RIGHT NOW. Granted, there are special cases. And debt for owning a home or for an education (although, student loans are super fucking scummy anyways - another topic though) is unavoidable.