TonyCinTX

CEO Pay and the Reverse Robin Hood

@GALT:

You miss a crucial difference between actors, actresses, news anchors, sports stars, music stars and other celebrities and CEOs.

Not one of these celebrities, including the ones you mention, has any responsibility to others when allocating their own pay. Katie Couric is not responsible to the shareholders of CBS for using their money wisely; she is an independent contractor. She demands a salary and perks, and the fiscal geniuses at CBS decide whether her services are worth it to them.

Julia Roberts doesn't own a movie studio. Somebody else owns the studio, approaches her (through an agent), pitches their picture and her share. She is an independent businesswoman with her own staff, lawyers, and negotiators. Somebody else decides whether she commands enough audience to be worth $20M, and that person has the fiduciary obligation to spend the money of their shareholders or investors wisely.

In all of your counter-examples, not one of those celebrities has any fiduciary obligation to the shareholders of the company paying them. In all of those cases, somebody else is trying to get the most bang for the buck out of their money, or the money of their investors or shareholders. Call that "maximizing value."

In the case of the public companies, The BOD and C-Level officers ARE specifically responsible for maximizing value, and setting their own salaries is a direct conflict of interest.

@Wisdom vs... saying "don't buy their stock" is like saying if you don't want to get mugged, stay in the house. I have a fundamental right not to be robbed, defrauded, misled or lied to by companies in which I invest, and I believe I have the right to not get mugged by CEOs or boards that are supposed to be representing my interests, even if that mugging is only 1% of my profits.



> On Sep 04 03:04 PM John Galt wrote: