American style capitalism

**Norton** · 15-10-2009, 09:07 PM

Was poking around the net and ran across this amazing bit of comparative info.

If my math is right. The folks doing the work are a bit under paid. The number one blue collar worker makes $87K per year vs the number one CEO who makes $702 million. 8,026 times more than the top blue collar guy!

I don't begrudge anyone a decent salary but, anyone else see a problem here or am I just a libbie, expecting things to be a tad more equal.?

The Top 10 Highest Paid CEOs

Ten CEOs take home more than $70 million in 2008, with Blackstone's Stephen Schwarzman topping the list with more than $700 million in compensation.
Last year was a bad one for most chief executives — but not for the top 10 highest paid CEOs.

Seven chief executives took home more than $100 million in 2008, and three others had paydays that topped $70 million, according to a report released Friday by The Corporate Library.

According to the report, Blackstone's Stephen Schwarzman was the highest paid CEO in 2008, taking home $702,440,573 in salary and stock options. The head of the financial services giant vested nearly $700 million worth, or 25% of the stock options he was granted after taking Blackstone public in 2007.

Schwarzman will receive the other 75% of his $4.7 billion equity grant from the IPO in equal installments over the next four years, so he will likely remain at the top of this list for at least the next several years.

A Blackstone spokesman stressed that the $702 million for Blackstone is not "compensation," but is mostly the vested portion of his stock from the IPO.

Oracle Chief Executive Lawrence Ellison, 2007's highest paid CEO, was second on the list, pocketing nearly $557 million.
Like Schwarzman, most of Ellison's compensation came from exercised stock options,which totaled $543 million from a whopping 36 million options. That's despite a 21% drop in Oracle's share price over 2008. With 33.4 million stock options still outstanding and a 24% rise in Oracle's stock, Ellison's likely to keep his top spot on the list in 2009.

The next seven highest paid CEOs all helm energy companies: Ray Irani of Occidental Petroleum, John Hess of Hess Corp., Michael Watford of Ultra Petroleum, Aubrey McClendon of Chesapeake Energy, Bob Simpson of XTO Energy, Mark Papa of EOG Resources and Eugene Isenberg of Nabors Industries.

Oil prices — and the stock price of most energy companies — rocketed higher in the first half of 2008, before plummeting lower in the end of the year. Despite that roller coaster, these CEOs' stock options were still worth quite a bit.

And coming in at No. 10 was Michael Jeffries, chief executive of Abercrombie & Fitch. Despite a tough year for retail, in which Abercrombie's stock dropped nearly 70%, Jeffries made more than $60 million in stock options.

Jeffries was also awarded a $6 million "stay bonus" after remaining as the company's chairman and CEO through December 2008, on top of his $1.5 million salary, $1.3 million for personal aircraft usage and $382,687 towards his 401(k).

the-top-10-highest-paid-ceos-are.html: Personal Finance News from Yahoo! Finance

10 Highest-Paying Blue-Collar Jobs

1. Elevator Installer and Repairer
Average salary: $87,518
Average hourly wage: $42.08
Average work week: 40 hours
2. Electrical and Electronics Repairer -- Powerhouse, Substation and Relay
Average salary: $68,084
Average hourly wage: $32.75
Average work week: 40 hours
3. Power Plant Operator, Distributor and Dispatcher
Average salary: $65,846
Average hourly wage: $31.50
Average work week: 40 hours
4. Gas Plant Operator
Average salary: $63,872
Average hourly wage: $30.71
Average work week: 40 hours
5. Locomotive Engineer
Average salary: $63,125
Average hourly wage: $28.27
Average work week: 42.5 hours
6. Electrical Power Line Installer and Repairer
Average salary: $60,354
Average hourly wage: $29.02
Average work week: 40 hours
7. Structural Iron and Steel Worker
Average salary: $59,224
Average hourly wage: $28.55
Average work week: 39.9 hours
8. Construction and Building Inspector
Average salary: $59,144
Average hourly wage: $28.31
Average work week: 40.2 hours
9. Ship and Boat Captain and Operator
Average salary: $57,910
Average hourly wage: $24.86
Average work week: 51.8 hours
10. Radio and Telecommunications Equipment Installer
Average salary: $57,149
Average hourly wage: $27.48
Average work week: 39.9 hours

highest-paying-blue-collar-jobs: Personal Finance News from Yahoo! Finance

**helge** · 15-10-2009, 09:26 PM

The CEO's income is OTT.

Does the normal bluecollar salary include pension, healt insurance etc ?

**Norton** · 15-10-2009, 09:29 PM

Income before tax I would think. Sure CEOs get pensions and health insurance as well so should all even out. In both cases would depend on what the company they worked for gave in benefits.

**Jet Gorgon** · 16-10-2009, 12:59 AM

You're comparing elevator installers to CEOs? Jeezas, Norts. You want to go socialist? How about comparing education, responsibilities, commitments, strategy and future planning qualities?

**helge** · 16-10-2009, 02:00 AM

Originally Posted by Norton

the number one CEO who makes $702 million. 8,026 times more than the top blue collar guy!

Does it have to be so radical ?, Jet

Originally Posted by Jet Gorgon

How about comparing education, responsibilities, commitments, strategy and future planning qualities?

How about comparing Golden Parachutes, when the two fellas screw up their responsebilities ?
One is going to jail. Guess who.

**larvidchr** · 16-10-2009, 02:27 AM

Originally Posted by Jet Gorgon

You're comparing elevator installers to CEOs? Jeezas, Norts. You want to go socialist? How about comparing education, responsibilities, commitments, strategy and future planning qualities?

And exactly how much would any of the CEO's be worth without somebody to actually do the manual work then Jet ??

How much more money are their special responsibility's worth seen from society's point of view- and knowing that nobody, and I do mean nobody, is when it comes to the crunch irreplaceable.

10 times a worker salary ? 100 times ? 1000 times ? 5000 times ? 8000 times ? even when they fuck up and run the company down, or just do a mediocre job ?
Is it reasonable that they sit in a boardroom with Good like power where nobody in their right mind ever would vote against the pay-rises and golden handshakes they sit and give each-other with guaranteed approval from the major shareholders who they often control ? while they at the same time cuts jobs just enough to cover same pay-rises ? and refuse their employees modest requests for a few cents more with reference to the serious economic situation that demands cutbacks and spending restraint ?

Boardroom salary's have run amok a long time ago and it is about time that they are cut back to reasonable levels that are performance adjusted, just like their own guys on the assembly-line.

**sabang** · 16-10-2009, 04:04 AM

Recession, what recession. For some.

**Norton** · 16-10-2009, 08:50 AM

Originally Posted by Jet Gorgon

How about comparing education

Just looked at the balance sheet for the company I ran. Looked and looked and looked. No line item for education.

Originally Posted by Jet Gorgon

responsibilities, commitments

As a frequent flier in elevators, I am far more concerned the installer is responsible and commited than I am about the same for the companies CEO.

Originally Posted by Jet Gorgon

strategy and future planning qualities

Important and the CEO is the main architect. Even the best of plans and strategies are destined to fail if the employees don't execute them. Employees that don't execute them are fired, CEOs that botch their responsibility to run a profitable business seem to be immune to dereliction of duty.

Originally Posted by Norton

Abercrombie's stock dropped nearly 70%, Jeffries made more than $60 million in stock options.

**Jet Gorgon** · 16-10-2009, 09:43 AM

^ I was comparing education, responsibilities, etc, between the CEOs and the workers. Sure, without the workers, the job won't get done, but you need the CEO to decide how and what will be done.
Do the bank CEOs deserve their bonuses? Why not? Why is it your business? That's their biz. I can tell you, the mail room boys, the secretaries, the cafeteria workers, everyone who works for these firms get mega bonuses. Not a few hundred bucks, but several thousand each. Plus sick pay, long holidays, long maternity leave, healthcare bennies, etc. And no union dues.

**attaboy** · 17-10-2009, 06:17 AM

How much do they actually put in the bank (the $700 mil CEOs)? How much of the compensation is options to buy stock at a certain price, options which they never exercise because the stock is below the exercise price, the option to buy expires and they have nothing?

Blackstone's Stephen Schwarzman was the highest paid CEO in 2008, taking home $702,440,573 in salary and stock options.

Ok, so the article touches on this. If the stock "options" are actually IPO stock, more than likely it's restricted stock which he can't sell immediately, there's a date on it. Also agreeing to get paid in restricted stock from an IPO is pretty risky. If the company tanks the CEO has pretty toilet paper, that is once the stock is released to him.

**beazalbob69** · 17-10-2009, 06:53 AM

Well I am a blue collar boy myself almost 20 years in Machining both C.N.C. and manual. I cannot believe how many people dont have a clue what I do for a living!
Without machinists nobody else would be able to do their jobs. We make metal parts for everything and I mean everything from Construction to Medical Avionics to Electronics.

So tell me why Machinists get some of the lowest salaries out of all the bluecollar jobs? Hell it's not even listed as a skilled trade in most newspaper classifieds!

Why do plumbers get more than us? Carpenters? Welders? Without machinists to supply them with their tools and parts they would'nt be able to do their jobs!

As for these CEO's vs. Blue Collar the difference in salary's is disgusting and makes me sick. Even if they suck at their jobs they still make 10,000 times what I make unbelievable! No wonder all of our manufacturing jobs are going overseas nobody wants to do it anymore.

**Humbert** · 17-10-2009, 06:58 AM

In all companies bonuses are tied to performance. Full bonus is paid if 100% of objectives are met. They usually comprise cash, full shares of stock and stock options which become fully vested over time. For varing levels of achievement, bonuses are paid out accordingly. It is the responsibility of the corporate board of directors to provide oversight and approval for this process.
I would never begrudge the need for compensatory bonuses to be paid to key executives whose leadership skills are crucial to driving the success of the company. The rarer the skill the higher the compensation. Arguably, their are less qualified CEO's out there than unskilled laborers.

**beazalbob69** · 17-10-2009, 07:06 AM

^ Blue Collar workers are not unskilled laborers! A CEO cannot do my job anymore than I could do his.

**Humbert** · 17-10-2009, 07:27 AM

^No offense, I'm sure they can't do your job, but even skilled labor is in more supply than top leadership skill. Technical skills can be learned but leadership skills are in very short supply.

The abuses to the bonus system on Wall Street occured when the focus of bonus compensation shifted to from achievement to retention.

**Jet Gorgon** · 17-10-2009, 07:29 AM

^^ True. But life ain't fair, is it? X is pretty and models for big bucks, Y is dumb as a post but gets mils as a pro ball player, Z has a billionaire dad and she built a multi-mil dollar co, and on and on.
Be happy with what you have. Who are you accountable to? If you screw up one day, will that ruin the company? No. That's why CEOs are under pressure to make their cos work.

**sabang** · 17-10-2009, 08:31 AM

Originally Posted by Jet Gorgon

Do the bank CEOs deserve their bonuses? Why not? Why is it your business? That's their biz.

Actually, it is the business of the owners of the company- the shareholders. Because it is their money that is being 'donated' to fund these ridiculous benefit packages- money that would otherwise be bottom line profit.

They should be a lot more activist in this regard- and, given that these days most of the largest shareholders are institutions, such as pension funds and insurance companies, I submit that They are being in dereliction of their duty towards their own shareholders and stakeholders by not being more active.

Germany has a much more responsible corporate culture than America in this regard. In the US, the board decides it's own compensation packages with little if any consultation with outsiders- and it's pretty obvious where that will lead, indeed has led. In Germany, the 'compensation committee' is staffed by representatives from the various company stakeholders, including not only senior management but shareholders and union representatives too. This leads to a much more responsible, equitable outcome. It could hardly be argued that US corporations outperform German corporations.

Quite often the lions share of these benefit packages come from the excercise of stock options, but bear in mind that these options are issued at no cost to the Executive involved and if they go underwater, i.e below their Exercise price, they are routinely re-issued at a lower strike price!

With all due respect to Mr Schwarzman, he does not justify a benefit package that exceeds US$2,000,000 per working day.

The fact that currently one in ten of the US workforce cannot find any paid employment just makes it more obscene.

**Norton** · 17-10-2009, 09:24 AM

Originally Posted by Humbert

In all companies bonuses are tied to performance. Full bonus is paid if 100% of objectives are met.

Yes and level of performance is based upon meeting goals stated in ones individual performance plan. All should be compensated on the level to which they achieve individual goals.

For a machinist, productivity and quality are the focus.
For CEOs, company financial performance is the focus.

Rarely have I seen a CEO goal stating the company will lose several million/billion. Failure of CEOs to achieve goals don't make much difference in compensation as evident in the OP.

If the machinist meets or exceeds his goals, his boss will tell him, "You've done a great job but sorry no bonus this year. Hard times. The company lost big money. Oh, one last thing before you go back to work. In order to make up for the losses, the company will be asking you to take a salary cut. We know you are a team player so expect you will not mind."

The system rewards incompetence and punishes competence. Something very wrong with this picture.

**chitown** · 17-10-2009, 09:43 AM

Originally Posted by sabang

Actually, it is the business of the owners of the company- the shareholders. Because it is their money that is being 'donated' to fund these ridiculous benefit packages- money that would otherwise be bottom line profit.

I agree Sabang.

When I owned my own company, I was the CEO / corporation president and never made millions. I made a good bit of dough, but nothing as described above. I did make money besides a salary, that I took in quarterly bonuses. Sometimes it was huge and sometimes it was a fat ZERO.

I never felt I made enough as the company owner, but I NEVER would have given the salary I got to a guy I would have employed to run the company - not even half....maybe not even a quarter. I don't care what education level he has achieved or what he could. He could not do what I did, nor could he ever care about my company the way I could.

I felt I was entitled to make a good wage as I had put my butt on the line by starting the company with a huge investment and eventually carrying loans (personally and through the business) for the business for about 1 mil. Yeah, I took a nice wage, but I was the one that invested my cash, took the risk and worked 75 to 80 hours a week to keep the thing running right.

**Humbert** · 17-10-2009, 09:49 AM

Originally Posted by Norton

If the machinist meets or exceeds his goals, his boss will tell him, "You've done a great job but sorry no bonus this year. Hard times. The company lost big money. Oh, one last thing before you go back to work. In order to make up for the losses, the company will be asking you to take a salary cut. We know you are a team player so expect you will not mind."

Machinists rarely get performance bonuses, maybe a christmas turkey if they are lucky. Bonuses are only a portion of a CEO's compensation. A company can have a year where financial goals are not met and the CEO still gets his base salary. CEO's also have contracts which usually provide nice payouts if they are terminated for non-performance prior to the end of their contract.

**Norton** · 17-10-2009, 10:38 AM

Originally Posted by Humbert

Machinists rarely get performance bonuses, maybe a christmas turkey if they are lucky.

Many do. Often times it was not called a bonus but a cash performance award. I recall one year when working for one of the largest US companies, they canceled the annual turkey because of poor financial performance. The CEO still received a bonus. Employees really didn't care much about not getting the bird but were more than a bit angry about the CEO/Executive bonuses.

BTW, I was one of the executives receiving a bonus as the MD of Asian Operations. Used the bonus for a big New Year party for all employees in my organization. Being all Asians, they preferred the party anyway. Had no idea what to do with a turkey.

**Humbert** · 17-10-2009, 11:11 AM

If he's a machinist who belongs to the UAW he sure doesn't get a bonus.

**Norton** · 17-10-2009, 11:29 AM

All Asians, no machinists and no UAW or any other unions involved. Good thing for me all around.

**Jet Gorgon** · 17-10-2009, 11:44 AM

Originally Posted by sabang

Actually, it is the business of the owners of the company- the shareholders. Because it is their money that is being 'donated' to fund these ridiculous benefit packages- money that would otherwise be bottom line profit.

What? Shareholder money doesn't fund the company except in IPOs.

Originally Posted by Humbert

If he's a machinist who belongs to the UAW he sure doesn't get a bonus.

True, he gets a lifelong bonus at the expense of the company.

**Digitalwolf** · 17-10-2009, 12:04 PM

Originally Posted by Jet Gorgon

^ I was comparing education, responsibilities, etc, between the CEOs and the workers. Sure, without the workers, the job won't get done, but you need the CEO to decide how and what will be done.
Do the bank CEOs deserve their bonuses? Why not? Why is it your business? That's their biz. I can tell you, the mail room boys, the secretaries, the cafeteria workers, everyone who works for these firms get mega bonuses. Not a few hundred bucks, but several thousand each. Plus sick pay, long holidays, long maternity leave, healthcare bennies, etc. And no union dues.

If CEOs are running a profitable company then perhaps Jet. But if they are losing the companies shirt then they deserve ZERO bonus. Time after time we see CEOs of losing companies getting million dollar bonuses at the same time their companies are going under. It just doesn't make sense.

Also, a watch works because ALL the parts work. I don't give a rats ass if the CEO has more college than the janitor. Everything should go in 5s. Meaning a CEO should only make 5 times what the lowest person makes. Blow your mind? Deal with it. CEOs are not Gods. They are not better than the people they manage. This world accepts too big a gap between workers and managers. It's criminal. It's immoral. I pray it ends some day.

Check out this video:

Is it right for one person to have 3 or 4 houses when there are homeless in this world? Seriously! Think about it. Is it right for anyone to have a live in chef when there are thousands of children starving in this world TODAY!

Sorry.. I am getting pissed off right now.

Call it Socialism if you want. If Socialism means we all have value ....then count me in.

**sabang** · 17-10-2009, 02:14 PM

Originally Posted by Jet Gorgon

What? Shareholder money doesn't fund the company except in IPOs.

Or Rights issues, but thats not the point- Shareholders are the owners of the company, and profits are attributable to them. They 'own' the profits, and it is clearly not in their or their stakeholders interests for an undue amount of company profit to be squandered on Executive compensation.

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