Whistleblower » Blog Archive » Paychecks for the uber-wealthy

Paychecks for the uber-wealthy

Posted on April 16th, 2008 – 5:32 PM
By James Shiffer

One of my favorite voyeuristic pastimes is reading about the compensation of corporate CEOs. Every year, the Star Tribune’s business staff helpfully compiles a list of the highest-paid executives, and when a new paycheck becomes public, we publish it. Recent revelations include outgoing Target CEO Robert Ulrich’s nearly $116 million windfall and Best Buy CEO Brad Anderson’s $49.3 million total compensation last year.

We only know about these salaries because the federal government requires them as a way of giving investors more information about the companies they own. The agency that is supposed to regulate Wall Street, the U.S. Securities and Exchange Commission, has a searchable database with the friendly name of EDGAR. It has regular corporate filings that have a plethora of information about a company’s financial condition, executive compensation, legal troubles and other info.

Most of the Minnesota millionaires look like paupers compared to hedge fund managers, according to a recent New York Times story. One of them, John Paulson, took in $3.7 billion last year because of his skill betting on drops in the mortgage industry, among other clever ventures. Just for comparison’s sake, that amount earned by that individual is nearly four times the budget deficit tormenting the Minnesota Legislature. By another measure, Paulson’s pay equals the annual salaries of 304,000 workers earning today’s minimum wage of $5.85 per hour. And it’s about the same as the gross domestic product last year of Tajikistan, a Central Asian nation of 7 million people.

This entry was posted on Wednesday, April 16th, 2008 at 5:32 pm and is filed under The rich get richer. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

15 Responses to “Paychecks for the uber-wealthy”

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Don Says:
April 21st, 2008 at 11:06 am
Why should we care what they make? I can only see it as an issue if you where a concern shareholder then and only do you or I have something to say on how much they make. If We find it offensive or excessive we do not have to do business with them. We only damn the rich because we aren’t. In short they make a lot of money so didn’t they earn it?
John Gall Says:
April 21st, 2008 at 11:11 am
That’s very interesting. Are you insinuating that there is something wrong, illegal or immoral here? I think that stockholders should have this information but if they see fit to grant such a salary then so be it.
Roger Says:
April 22nd, 2008 at 10:34 am
Thats it.. there should be legislation that stops this madness, the heck with what the shreholders think. the gov’t needs to do something about this to make it fair for the little guy(besides all the tax breaks, free healthcare, and tax rebates).

We should also raise capital gains taxes so we really stick it to them.

Oh wait that is what Obama is suggesting. Nevermind.
DFAL Says:
April 22nd, 2008 at 12:00 pm
More left-wing class envy propaganda…

Most people do not earn minimum wage. And what multiple of the minimum wage was Barack Obama’s $4.2 million 2007 income? Or how about Oprah Winfrey’s $200+ million? Or the Clinton’s income? What multiple of the minimum wage is Al Gore’s $100,000 fee for a 70-minute presentation on global warming? He’s reportedly earned $100 million since leaving public office.

If these left-wingers spent as much time making their own money as they do fixated on how much other people make, maybe they would make some money of their own.
Mark Gisleson Says:
April 22nd, 2008 at 12:12 pm
Why is it that the greedy few are always anonymous when they comment? (Or selling some snake oil like the second commenter?) For all we know there are no local supporters of this Wall Street rip off, just Wall Streeters trolling hinterland newspaper comments.

“Most people do not earn minimum wage.” But to heck with the ones who do, right chum?

The politics of greed and selfishness just keeps getting uglier and uglier.
Andrew Says:
April 22nd, 2008 at 12:41 pm
I care to hear this so I know who to and who not to buy from. If I hear that a CEO is making 50 million a year and the workers are making a little over minimum wage with no health care benefits than I want to make sure that I don’t support that company and purchase from it. Also, that in order for someone to be rich someone else has to be poor. Not everybody can be rich, or else, as I like to call it rediculously rich. The CEOs get paid what they do because the people below them get less. Does that men that officers doesn’t have an important job with a lot of responsibility and doesn’t deserve a fair high compensation? Of course not, but there is a difference between getting a rediculous wage and a reasonable one. The sad thing is, is that the only people that can change that are the Officers and Boards of Directors with ethical standards on how to treat their employees and run a company successfully.
DFAL Says:
April 23rd, 2008 at 12:26 pm
The statement by Andrew on 4/22/08:

“The CEOs get paid what they do because the people below them get less.”

just shows the lack of knowledge and common sense possessed by those on the left.

The vast majority of most CEO’s compensation–the big money makers–comes from stock options, not cash. As such, it is a transfer of wealth from the STOCKHOLDERS, NOT THE EMPLOYEES.

The company issues stock options, the CEO executes them and dilutes the value of all the outstanding shares. There is no cash transfer.

Again: What about Al Gore’s $100,000 per hour fee? Or Ophrah’s $200 million? Or Obama’s $4.2 million?

It’s hilarious to see you people on the left selectively choosing not to criticize your fellow Democrats who engage in the same behaviors that you pretend to be opposed to.

And to those who earn minimum wage, only someone who is incredibly lazy or low IQ can’t do better than minimum wage.
Barnard Gumble Says:
April 23rd, 2008 at 2:04 pm
I’d consider myself on the left side of the scale and I even agree with DFAL. Sorry folks, do some reading on how finance and stock options work before you go whining about how much CEOs make. Every time someone complains about CEO compensation on here it just rings of bitterness.

If someone can make millions, or even billions, of dollars a year, good for them. This is America…welcome to it.
Barnard Gumble Says:
April 23rd, 2008 at 2:08 pm
Also:

“Does that men that officers doesn’t have”

“rediculous ”

“rediculously ”

Perhaps we should take CEO compensation money and invest more in public school spelling and grammar programs?
Target Employee Says:
April 23rd, 2008 at 7:35 pm
(Getting on my left-wingnut podium)

So Ulrich earning $116m doesn’t affect me? If he is getting so many stock options, why don’t I get a chance to earn them, heck, even buy them? Oh, yeah, that’s right, I didn’t go to the right school to get into upper management! I’ll be sure to tell my kids to go to Harvard.

That $116m (of which $112m was from options) could have been used to better secure the company. It is correct that it diluted shareholder value, but it also erodes employee’s trust, as well as gives money away - it isn’t free, right? If the company offered that stock out, it could have raised that amount to add to its development, or to hold onto the credit recievables it is about to sell off.

It all comes down to the fact no one in a publicly traded company deserves to be paid this much. I would say it is unethical to give away so much capital to one employee. However, not much will happen in this day and age when all board members are CEOs, VPs, and Executive wannabes. They have a vested interest in making executive salaries as high as possible - so that when they get their shot, they will have their own ‘Golden Parachute’.
(/Left-wingnut podium)

Phew!