Ursa Majoris Posted January 31, 2006 Share Posted January 31, 2006 it's not good business to pay someone more than their worth, and it's bad business more than anything that will "upset each other's applecarts". you're dam right investors, fund managers and the like care whether a company is paying far more for talent than it needs to. CEO salaries are ridiculous because of pervading myths and assumptions within the business world...if those assumptions are wrong, then that's an opportunity for someone else to come along and do things more efficiently and take their business. and i still don't see why you think you have a right to "have a problem" with what any company pays its people. i don't think you do, at least not any more than rick santorum has a right to "have a problem" with dudes cornholing each other. 1298285[/snapback] What are these pervading myths and assumptions? All I see is executives leaving companies with $5,000,000 settlements when they've been a complete clusterf*ck. I see the chairman of United Health taking home $150 million while companies struggle with health care costs. I see thousands thrown out of work while the executive "talent" that guided the company straight into the wall floats gently to earth richer than it was when it came aboard. I see thousands of Enron employees ruined, but I don't see any execs begging on the street. It's a f'n plutocratic oligarchy and I do have every right to be concerned over executive pay - as was pointed out earlier, my 401k is my passport to be concerned. Quote Link to comment Share on other sites More sharing options...
SuperBalla Posted January 31, 2006 Share Posted January 31, 2006 I m glad I own stock in them. Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted February 1, 2006 Share Posted February 1, 2006 What are these pervading myths and assumptions?1298309[/snapback] that a top-flight executive is worth a kazillion dollars, because s/he will have a multi-kazillion dollar impact on your bottom line. I see thousands of Enron employees ruined, but I don't see any execs begging on the street. but you see some in jail and in federal court facing the music. people telling their stockholders that the company is doing great, while they KNOW it isn't and they're quietly sloughing off their own stock, is illegal. and there are TONS of shareholder suits against ex-executives for similar hijinx. but some might say that's all the more reason to pay the REALLY big bucks to the really top notch execs, guys you can trust to steer the company in the right direction and not into the rocks. either way, it's their business, and your business whether you want to buy their product or not. Quote Link to comment Share on other sites More sharing options...
ebartender Posted February 1, 2006 Share Posted February 1, 2006 I just read all 12 pages of this post. I am so friggin dizzy right now. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted February 1, 2006 Share Posted February 1, 2006 that a top-flight executive is worth a kazillion dollars, because s/he will have a multi-kazillion dollar impact on your bottom line. Well, that's my point right there, except I think it's a circle jerk that no-one wants to stop because everyone's playing the game. I do think executives can benefit their companies of course - they usually do - but the penalty for failure should be the same as mine. but you see some in jail and in federal court facing the music. people telling their stockholders that the company is doing great, while they KNOW it isn't and they're quietly sloughing off their own stock, is illegal. and there are TONS of shareholder suits against ex-executives for similar hijinx. but some might say that's all the more reason to pay the REALLY big bucks to the really top notch execs, guys you can trust to steer the company in the right direction and not into the rocks. either way, it's their business, and your business whether you want to buy their product or not. 1298332[/snapback] When it comes to gasoline and such, the choices of whether to buy the product are a little limited. It's not like electronics, cars et al where there is real competition. No-one differentiates between one gas or another and the cartel makes sure there's no difference between them. Quote Link to comment Share on other sites More sharing options...
yo mama Posted February 1, 2006 Share Posted February 1, 2006 (edited) it's not good business to pay someone more than their worth...1298285[/snapback] While true in theory, I do not think you actually understand the alternate reality of how executive comp works. Most senior execs in large companies are primarily concerned with lining their own nests, not with the well being of the company. And most execs are all on each other's boards of directors/compensation committees. So there are no free market economic factors in play to stop those execs from getting paid more than they are worth. I've seen execs loot companies, run them into the ground, then get paid 10s of millions of dollars in severance when rank and file employees were getting pay cuts. I've drafted executive comp agreements. And I've defended (from a tax standpoint) various executive comp arrangements. Az, I'm telling you, your logical assumption about it not being good business to pay someone more than they are worth is inapplicable to the compensation received by most fortune 1000 company senior execs. Because its great business for the execs personally, and those are the same people in charge of determining what is good business for the companies they run, even if by regular folks' standards it is illogical and detrimental to the long-term welfare of the business enterprise. Edited February 1, 2006 by yo mama Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted February 1, 2006 Share Posted February 1, 2006 While true in theory, I do not think you actually understand the alternate reality of how executive comp works. Most senior execs in large companies are primarily concerned with lining their own nests, not with the well being of the company. And most execs are all on each other's boards of directors/compensation committees. So there are no free market economic factors in play to stop those execs from getting paid more than they are worth. I've seen execs loot companies, run them into the ground, then get paid 10s of millions of dollars in severance when rank and file employees were getting pay cuts. I've drafted executive comp agreements. And I've defended (from a tax standpoint) various executive comp arrangements. Az, I'm telling you, your logical assumption about it not being good business to pay someone more than they are worth is inapplicable to the compensation received by most fortune 1000 company senior execs. Because its great business for the execs personally, and those are the same people in charge of determining what is good business for the companies they run, even if by regular folks' standards it is illogical and detrimental to the long-term welfare of the business enterprise. 1298436[/snapback] Exactly. "And most execs are all on each other's boards of directors/compensation committees". And that's the circle jerk I've been talking about. Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted February 1, 2006 Share Posted February 1, 2006 Az, I'm telling you, your logical assumption about it not being good business to pay someone more than they are worth is inapplicable to the compensation received by most fortune 1000 company senior execs. Because its great business for the execs personally, and those are the same people in charge of determining what is good business for the companies they run, even if by regular folks' standards it is illogical and detrimental to the long-term welfare of the business enterprise. 1298436[/snapback] this is just plain false, and it's exactly why public companies are required to have boards of directors making these determinations. senior execs' compensation plans are determinied by the stockholders in the company, represented by these boards, BEFORE they take employment. given that the value of the stock in these companies has done pretty well over the years, i'd have to say that by and large, they know what they're doing. and they probably have a better grasp of the "long-term welfare" of their own business enterprise than pendantic sideline ninnies like you and ursa do. Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted February 1, 2006 Share Posted February 1, 2006 Okay we agree that most large corporations pay their execs too much. So what? Does that mean we shouldn't let the corpaorations turn a profit? Why are we getting off on this tangent? Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted February 1, 2006 Share Posted February 1, 2006 Okay we agree that most large corporations pay their execs too much. So what? Does that mean we shouldn't let the corpaorations turn a profit? Why are we getting off on this tangent? 1298460[/snapback] Back on track.......there's a difference between profit and gouging. Artificially jacking prices to take advantage of a shortage that has not happened and didn't happen is not the same as making a profit in the usual business sense. In this case, that price hike damaged many other companies by forcing their costs up also. Quote Link to comment Share on other sites More sharing options...
H8tank Posted February 1, 2006 Share Posted February 1, 2006 Thank GOD you kommunists are out of power. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted February 1, 2006 Share Posted February 1, 2006 Thank GOD you kommunists are out of power. 1298783[/snapback] Haven't you got some greeting to do, or is Walmart closed for the night? Quote Link to comment Share on other sites More sharing options...
WaterMan Posted February 1, 2006 Share Posted February 1, 2006 Haven't you got some greeting to do, or is Walmart closed for the night? 1298789[/snapback] Super Wal-Marts are 24/7. Quote Link to comment Share on other sites More sharing options...
Randall Posted February 1, 2006 Share Posted February 1, 2006 Thank GOD you kommunists are out of power. 1298783[/snapback] Not for long. Now Bush says we have to come off our oil addiction. Anyone actually believe this guy. Quote Link to comment Share on other sites More sharing options...
Dr. Love Posted February 1, 2006 Share Posted February 1, 2006 As per usual with Tailgate threads, this one has gone off on a tangent that is as interesting as the topic that started the thread. I will comment on both, but I will constrain my replies in this post to the original topic of Exxon's profits. As others pointed out earlier, the absolute dollar number is much more a function of the sheer size of the company rather than anything else. I think the suggestion that profit margin is a better metric is a sound one. To that end, I wasted some time looking at a few companies of interest, including other oil companies and companies in other industries. It's by no means comprehensive, but it does give some measure to judge by. The values were gotten from Yahoo! Financial. Company Profit MarginMicrosoft 31.9%Verizon 11.9%3M 15.1%Exxon Mobile 10.7%Dow Chemical 9.8%HJ Heinz Company 7.9%Disney 7.9%Chevron 7.7%DuPont 7.2%Total 7.1%Sprint 6.7%Time Warner 6.2%BP 5.9%Toyota 5.9% My conclusions are this: Exxon's profit margins are high for the industry, but not necessarily for companies in general. The oil/gas industry's profit margins are not excessive compared to other industries. Considering that Exxon has little control over pricing, they've obviously optimized their operations to be able to be able to have a bigger margin than their direct competition. Ursa has claimed that the fact that Exxon products are very nearly the same as BP or Total products makes it easier for Exxon to make "excessive" profits. This is precisely the opposite of reality. Once a material has been commoditized, it is sold on purely a price basis. And, as others have pointed out, that price is determined by the commodities market, not Exxon, BP, or any of the other oil companies. In the absence of data supporting claims of collusion or any other non-competitive behavior, I fail to see what the hubub is about, other than people being pissed about gas prices being higher than they'd like. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.