Re: I'm with Tom


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Posted by D Sherman [72.47.9.228] on Thursday, January 05, 2012 at 14:07:54 :

In Reply to: Re: I'm with Tom posted by Kaegi [24.16.253.154] on Thursday, January 05, 2012 at 13:13:09 :

I agree with you about executive pay and short-term thinking, but people have been greedy forever. The basic corporate structure is the same today as it was 50 years ago. In theory, the stockholders elect the directors and the directors tell the executives what to do and how much they will be paid. The root of the problem is that nowadays the directors and the executives often work together to screw both the employees and the stockholders. When the primary stockholder were a few rich men, they would watch "their" companies closely and take a dim view of such dealings, but nowadays the stockholders are mostly institutions like pension funds, insurance companies, and mutual funds. If the managers of those funds aren't entirely in bed with the directors, they are at least not looking at anything beyond this quarter's results, no matter how they were achieved.

Yes, if everyone was more ethical and less greedy, our system would work better, but so would communism. Somehow we have to restore oversight to corporate boards, which would result in executive pay being cut by a factor of about 100 and long-term decision making being reinstated. Don't ask me how to make that happen, though.



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