CEOs are OVER paid
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LKY is the main proponent for high wages for Ministers, and LHL has towed the line by justifiying that Ministerial wages are pegged to Executive Wages in the Private Sector.
With the Singapore private sector taking the cue from the remuneration packages paid to US Corporate Executives, should we also not take the cue that a review is now appropriate to bring sensible perspective to this issue ?
In the Straits Times, Tuesday 16 October 2007 edition, on Page H-13, it reported that US CEOS are overpaid, and in today's Straits Times another report is printed in an even more strident manner.
From Asiaone - Straits Times, 17 October 2007
Slashing CEO pay won't blow controversy away: Amex chief
Bryan Lee
Wed, Oct 17, 2007
The Straits Times
A CREDIT card boss says the controversy over bloated chief executive officer (CEO) remuneration will not go away even if salaries are slashed by 75 per cent.
As long as people see top corporate bosses as caring only for themselves, the issue of CEO compensation will remain, said American Express CEO Kenneth Chenault.
'There's a perspective that people in business care less about society overall - all they care about are themselves,' Mr Chenault told more than 800 corporate bigwigs at a business forum yesterday.
'Even if compensation was cut back by 50 per cent, or 75 per cent, I still think there'll be issues in the public mind,' said United States- based Mr Chenault, who flew in to speak on leadership at the conference, organised by CapitaLand.
He was responding to a question from the audience, which alluded to fresh criticism in the US over big pay cheques of head honchos.
A Financial Times study last week found that some US CEOs are paid 10 times more than their top lieutenants.
'Are there some CEOs that are overpaid? Absolutely,' said the straight-talking Mr Chenault.
'But I also believe that there are boards in place that have the power and the responsibility to change that.'
The key to achieving this is to have clear criteria for evaluating CEO performance and to be transparent about it, said Mr Chenault.
But for ultimate credibility, companies and CEOs will need to show that they are willing to engage in issues that concern society at large, he said.
Mr Chenault said there are problems in the world that even governments cannot solve on their own and this is where corporations can step in to make a difference.
On leadership, he said the ability to inspire may be underemphasised when compared to intelligence.
While it is important to read situations correctly, true leaders inspire their organisations to have hope when presented with a challenge, he said.
But the worst leaders are those who lead through fear, said Mr Chenault.
'That may work for a period of time... But an environment where everyone is constantly scared is one that stifles creativity.' -
The following CBS report was made in 2003, even as the debate of the Ministerial Wages were raging in Singapore.
Ten most overpaid jobs in the U.S.
CBS MarketWatch | 8:19 PM ET Nov. 6, 2003 | Chris Pummer
Posted on 11/06/2003 6:28:15 PM PST by StockAyatollah
SAN FRANCISCO (CBS.MW) -- Almost no one in America would admit to being overpaid, but many of us take home bloated paychecks far beyond what's deserved.
"Fair compensation" is a relative term, yet human-resource consultants and executive headhunters agree some jobs command excessive compensation that can't be explained by labor supply-and-demand imbalances.
And while it's easy to argue that chief executives, lawyers and movie stars are overpaid, reality is not that cut and dry.
Corporate attorneys earning $500 an hour and plaintiffs lawyers pocketing a third of a class-action or personal-injury settlement certainly don't go hungry. Yet many local prosecutors and public defenders are hard-pressed to pay off law-school loans.
Hollywood stars, making $20 million a movie or $10 million per TV-season, qualify for many people's overpaid list. But for every one of those actors and actresses, there are a thousand waiting tables and taking bit movie parts or regional theater roles awaiting a big break that never comes.
"A lot of people are overpaid because there are certain things consumers just don't want screwed up," said Bill Coleman, senior vice president of compensation for Salary.com. "You wouldn't want to board a plane flown by a second-rate pilot or hire a cheap wedding photographer to record an event you hope happens once in your lifetime.
"With pro athletes, one owner is willing to pay big money for a star player and then all the other players want to keep up with the Joneses," Coleman said. "The art with CEO pay is making sure your CEO is above the median -- and you see where that goes."
What follows is a list of the 10 most overpaid jobs in the U.S., in reverse order, drafted with input from compensation experts:
10) Wedding photographers
Photographers typically charge $2,000 to $5,000 to shoot a wedding, for what amounts to a one-day assignment plus processing time. Some get $15,000 or more. Yet many mope through the job, bumping guests in their way without apology, with the attitude: "I'm just doing this for the money until Time or National Geographic calls."
They must cover equipment and film-development costs. Still, many in major metropolitan areas who shoot two weddings each weekend in the May-to-October marrying season pull in $100,000 for six months' work.
Yet let's face it; much of their work is mediocre. Have you ever really been wowed flipping the pages of a wedding album handed you by recent newlyweds? Annie Leibovitz and Richard Avedon they're not, but some charge fees as if they're in the same league.
9 ) Pilots for major airlines
Captains with 12 years of experience earn up to $265 an hour at Delta, United, American and Northwest, which translates to $250,000 a year and more for a job that technology is making almost fully automated.
By comparison, senior pilots at low-fare carriers like Southwest and Jet Blue make about 40 percent less. That helps explain why their employers are profitable while several of the majors are teetering on the brink of bankruptcy.
The pilot's union is the most powerful in the industry. It commands premium wages as if still in the glory days of long-gone Pan Am and TWA, rather than the cutthroat, deregulated market of under-$200 coast-to-coast roundtrips. Because we entrust our lives to them, consumers accept the excessive sums paid them, when it's airplane mechanics who really hold our fate in their hands.
8 ) West Coast longshoremen
In early 2002, West Coast ports shut down as the longshoremen's union fought to preserve generous health-care benefits that would make most Americans drool. The union didn't demand much in wage hikes for good reason: Its members already were making a boatload of money.
Next year, West Coast dockworkers will earn an average of $112,000 for handling cargo, according to the Pacific Maritime Association, their employer. Office clerks who log shipping records into computers will earn $136,000. And unionized foremen who oversee the rank-and-file will pull down an average $177,000.
Unlike their East Coast union brethren who compete with non-union ports in the South and Gulf of Mexico, the West Coast stevedores have an ironfisted lock on Pacific ports. Given their rare monopoly, they can disrupt U.S. commerce -- as they did during the FDR years -- and command exorbitant wages, even though their work is more automated and less hazardous than in the days of "On the Waterfront."
7) Airport skycaps
Many of the uniformed baggage handlers who check in luggage at curbside pull in more than $100,000 a year -- most of it in cash.
On top of their $30,000 to $40,000 salaries, peak earners take in $300 or more a day in tips. Sound implausible? That amounts to a $2 tip from 18 travelers an hour on average. Many tip more than that.
While most skycaps are cordial, a good many treat customers with blank indifference, knowing harried travelers don't want to brave counter check-ins, especially in the post 9/11 age. Their work is more mindless than that of a McDonald's counter clerk, who at least has to bag the order correctly.
6) Real estate agents selling high-end homes
Anyone who puts in a little effort can pass the test to get a real estate agent's license, which makes the vast sums that luxury-home agents earn stupefying.
While most agents hustle tail to earn $60,000 a year, those in affluent areas can pull down $200,000-plus for half the effort, courtesy of the fatter commissions on pricier listings.
Luxury home agents live off the economy's fat, yet many put on airs as if they're members of the class whose homes they're selling, and eye underdressed open-house visitors as if they're casing the joint.
Continue below -
continuation
5) Motivational speakers and ex-politicians on lecture circuit
Whether it's for knighted ex-Mayor Rudy Guiliani or Tom "In Search of Excellence" Peters, corporate trade groups pay astronomical sums to celebrity-types and political has-beens to address their convention audiences.
Former President Reagan raised the bar back in 1989 when he took $2 million from Japanese business groups for making two speeches. Bill Clinton earned $9.5 million on 60 speeches last year, though most of those earnings went to charity and to fund his presidential library.
The national convention circuit's shame is that it blows trade-group members' money on orators whose speeches often have been warmed over a dozen times.
4) Orthodontists
For a 35-hour workweek, orthodontists earn a median $350,000 a year, according to the Journal of Clinical Orthodontics. General dentists, meanwhile, earn about half as much working 39 hours a week on average, in a much dirtier job.
The difference in their training isn't like that of a heart surgeon vs. a family-practice doctor. It's a mere two years, and a vastly rewarding investment if you're among the chosen: U.S. dental schools have long been criticized for keeping orthodontists in artificially low supply to keep their income up.
This isn't brain surgery: Orthodontists simply manipulate teeth in a growing child's mouth -- and often leave adjustment work to assistants whose handiwork they merely sign off on. What makes their windfall egregious is that they stick parents with most of the inflated bill, since orthodontia insurance benefits cover nowhere near as large a percentage as for general dentistry.
3) CEOs of poorly performing companies
Most U.S. chief executives are vastly overpaid, but if their company is rewarding shareholders and employees, producing quality products of good value and being a responsible corporate citizen, it's hard to take issue with their compensation.
CEOs at chronically unprofitable companies and those forever lagging industry peers stand as the most grossly overpaid. Most know they should resign -- in shareholders' and employees' interest -- but they survive because corporate boards that oversee them remain stacked with friends and family members.
The ultimate excess comes after they're finally forced out, usually by insiders tired of seeing their own stock holdings plummet. These long-time losers draw multimillion-dollar severance packages as a reward for their failed stewardship.
2) Washed-up pro athletes in long-term contracts
Pro athletes at the top of their game deserve what they earn for being the best in their business. It's those who sign whopping, long-term contracts after a few strong years, and then find their talents vanish, who reap unconscionable sums of money.
NBA player Shawn Kemp, for instance, earned $10 million in a year he averaged a pathetic 6.1 points and 3.8 rebounds a game. Colorado Rockies pitcher Mike Hampton earned $9.5 million -- in the second year of an eight-year, $121 million contract -- and compiled a 7-15 won-loss record with a pitiful earned-run average of 6.15.
Thank the players' unions for refusing to negotiate contracts based on performance -- and driving up the cost of tickets to levels unaffordable for a family of four, especially for football and basketball. They point to owners as the culprits, yet golf star Tiger Woods and tennis champ Serena Williams earn their keep based on their performance in each tournament.
1) Mutual-fund managers
Everyone on Wall Street makes far too much for the backbreaking work of moving money around, but mutual fund managers are emerging as among the most reprehensible.
This isn't kicking 'em when they're down, given the growing fund-industry scandal. They've been long overpaid. Stock-fund managers can easily earn $500,000 to $1 million a year including bonuses -- even though only 3 in 10 beat the market in the last 10 years.
Now we discover an untold number enriched themselves and favored clients with illegally timed trades of fund shares. That's a worse betrayal of trust than the corporate scandals of recent years, since they're supposed to be on the little person's side.
Put aside what fund managers earn and consider their bosses. Putnam's ex-CEO Lawrence J. Lasser's pay easily outstrips the bloated package that sparked New York Stock Exchange President Dick Grasso's ouster. Lasser's reported take: An average of $21 million in salary and bonus annually in the last five years, and a deferred compensation package estimated to exceed $200 million.
If only we were all so fortunate. -
ah... elitism.
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http://moneycentral.msn.com/content/P125120.asp
The worst offenders
The upshot: Some boards award breathtakingly large pay packages to CEOs even as the executives trash their shareholders investments. The worst:
* Top honors go to Gary Smith at Ciena (CIEN, news, msgs). His shareholders have been virtually wiped out -- losing 93% in the past four years. His compensation over that period: $41.2 million.
* Jure Sola, the CEO and chairman at Sanmina-SCI (SANM, news, msgs) collected $26.4 million during the past four years while Sanmina shares fell 78%. The bulk of Sola's pay came in the form of a performance bonus of $19.9 million, paid for hitting one recent quarter's targets.
* Sun Microsystems (SUNW, news, msgs) paid Scott McNealy, its CEO, chairman and founder, $13.1 million a year over the past four years, even as Sun's shareholders lost 76% of their money.
* Shares of supermarket chain Albertson's (ABS, news, msgs) fell 39% over the past four years. Despite this dismal record, Albertsons CEO and Chairman Larry Johnston collected a total of $76.2 million in that time.
* Under CEO Peter Dolans watch at Bristol-Myers Squibb (BMY, news, msgs), shareholders have seen the stock decline by 48% over the past four years. Dolan took home $41 million. -
CEOs Are Overpaid
From F. John Reh,
Your Guide to Management.
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CEOs are paid too much for what they do; too much more than their average worker
Pay for Performance
According to Business Week, the average CEO of a major corporation made 42 times the average hourly worker's pay in 1980. By 1990 that had almost doubled to 85 times. In 2000, the average CEO salary reached an unbelievable 531 times that of the average hourly worker.
"Pay for performance", tying executive compensation to the financial success of their company, has become very popular in the past decade. In the face of the largest bull market ever, that isn't surprising. It also isn't realistic. What CEO honestly believes that all or most of the appreciation in value of their company is due to their own talent?
ZD Net's Total Compensation Vs. Total Return To Shareholders chart (no longer online), shows that total return to shareholders was higher for many companies whose CEO compensation was under $500,000 than for companies who paid their CEOs multi-million dollar compensation.
Workers Unite
The AFL-CIO Executive Paywatch site gives people a lot of information about what they consider "the excessive salaries, bonuses and perks of the CEOs of major corporations". The site features a calculator that shows how your salary increase over the past five years compares to that of a CEO. They also give you tools to "take action to stop runaway CEO pay."
Is It Justified?
John Mariotti, president and founder of The Enterprise Group, asks "CEO Pay: How Much is Too Much?" and answers the question himself. Citing Derek Bok, he points out that as business becomes more complex, the demand for top executives increases and thus they command greater and greater pay. He also noted that such huge awards do little to motivate these outstanding performers, who are generally more motivated by challenge.
Mike Hughlett, Staff Writer for PioneerPlanet, thinks the reason why CEO pay soars so high is that CEO's pay generally is set by the compensation committee, usually comprised of other chief executives.
Graef Crystal, writing for the San Francisco Business Times, Uses Steven Jobs, co-founder of Apple Computer to prove his point on CEO compensation: the composition of a CEO's pay package has nothing to do with his future performance and the CEO may not make all that much of a difference in whether the company is a success or a failure.
In her article "Lowering the Bar", WSJ writer Joann S. Lublin notes "Pay for performance? Forget it. These days, CEOs are assured of getting rich -- however the company does."
So Why Bother?
CEOs are paid too much. It has minimal effect on their performance. It has no quantifiable effect on the performance of their companies. The only measurable effect is to drive an ever widening gap between the CEOs and the people they depend on to produce results.
It is up to us as Management Professionals to return some equity to compensation of upper management and the individual contributors while trust and respect between the two parties still can be salvaged. If we don't, worker motivation, and resultant innovation, will plummet. -
Well he hold you past, present, future, CPF and you life; when you stay in singapore.
Leave or just suffer with the rest.
Or topple the regime
hahaha -
So r our MPs
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Hmmm .... I am also over paid.
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yes, I agree with you.Originally posted by TheGoodEarth:Hmmm .... I am also over paid. -
Our MM, PM and ministers are also OVER paid (they claiming still not enough), but what can we do?
