Edwards: Rein in Outrageous Executive Pay.

[tjdee]

He's stirring up class warfare like nobody's business. I'm all for it.
His corporate responsibility plan is great. I don't think any of the other candidates are talking about this extensively (?).

For one thing, he wants to tie CEO pay to company performance.

"Executives who create wealth and jobs deserve to be richly compensated. In 2002, however, executive pay rose across the board, even as company performance declined and stocks fell. There is little reason why this should be happening in a functioning market economy. At some companies, CEOs walked away with massive bonuses while shareholders lost money and workers lost pensions."

The rest of his plan is here:
http://www.johnedwards.com/page.asp?id=137

How do I know he'd get this passed with a Republican congress? Because he frames it in 'American values'. That is very slippery for the GOP. Awesome.

[quinnox]

1. Edwards has the right ideas

I am looking forward to watching his town hall meeting today.

[Bombtrack]

21. Do a google on his

Workers/shareholders bill of rights

He's the furthest thing from a "corporate lackey" there is in the race, yet that is what he continues to be brushed with because he is affiliated with the DLC, and from a southern state.

A genuine platform rested on Education, civil liberties, civil rights, community involvement,

A true populist who has the potential to unite the classes and cultures more than any candidate since Bobby Kennedy

[bearfartinthewoods]

2. go for it!!

finally EDWARDS SPEAKS!!
and i like what i hear

[WhoCountsTheVotes]

3. good, very good

I just read his " A Worker And Shareholder Bill Of Rights" and I like it!

Kucinich/Edwards in 2004!

[bryant69]

4. Insanity

The level of executive compensation is insane. Totally insane. Particularly when one consideres how little control they actually exert over the success or failure of abusiness.

An Exective who runs his business in to the ground and causes the unemployment of thousands, can still walk away with a pretty nice selection of parting gifts.

Bryant
Check it out --> http://politicalcomment.blogspot.com

[ProfessorGAC]

5. Something I'd Like To See In This Plan

I'd like to see the elimination stock price from the compensation plan.

PROFITS drive stock price in the long run. Measuring performance on EBIT, Cash Flow Fraction of Revenue, and ROIC will result in long term performance for the firm as a whole. If the stock price doesn't rise much, it's because analysts didn't see the company as "sexy" but it was well run.

Basing compensation on stock price has led to far too much subterfuge and phony accounting. Bad idea!

Also, i'd like to see an accountability provision, thusly: A statistically significant fraction of the improvement in net income due to reduction in workforce must not be exceeded. If it is, some substantial portion of the compensation package is forfeited.

Sure, people would still get laid off, but it would encourage and incentivize folks in positions that are supposed to be strategic to think that way and not take the easiest path to higher profits. If it has to be done, so be it. But, being rewarded for the less than inspiring action of layoffs is patently foolish. (See Al Dunlap for example.)

Anyway, i concur with his overall sentiment, but i think he's missed a couple of critical factors that need to be addressed to make this compensation issue return to earth.
The Professor

[tjdee]

6. I agree...but

I think he's working from another angle on that. What I read it as, was that the stock price they'd be working with would be accurate (because of his ideas on accountability, expensing options, etc. etc.) and respective to the market sector/overall market. I think he recognizes the problem of bloated stock prices, wants to get those under control, and then offer some sort of stock thing as an incentive to officers.

But, I will bow to your greater knowledge of the subject, I may not know what I"m talking about, LOL.

I do like your idea about layoffs, and Edwards' plan doesn't cover every area I'd like to see addressed either. As you said, it's a good start.

[tjdee]

7. D'oh! Double post!

Oops!

[Superfly]

8. Sounds good, but

should the government really be getting involved on internal matters of private business?

[tjdee]

10. They're already involved.

The SEC, etc.

What Edwards proposes is tightening the reins and requiring honest practice and open books--he is doing this in response to the recent corporate scandals, where nothing has been done, really. And when the corporations break and skirt the law, and take advantage of workers/citizens, it IS the job of the government to step in, IMO.

I can see a disagreement over that, though.

[blm]

9. I think it's GREAT...

it pretty much aligns with what I think.

[tjdee]

11. Whaaa? No avatar?

LOL, hey, are you trying to be different or something?
;-)

[juajen]

12. Avatar?

Where do I get those. I saw it somewhere, but forgot.

[tjdee]

14. Do this...

Click on Latest, click on Options, go to "Edit profile", scroll down to Avatar Image--click on following images, and pick one!

Very cool, but it's hard to pick one...

[blm]

19. hah...not one for adornment...

I don't wear jewelry, either. I think it comes down to basic laziness on my part. ;))))

[SayitAintSo]

13. This man has the right ideas on Corporate Reform

And you are right - none of the other candidates are touching on it like he is. He would be such a good VP. Listen to the way he talks - he can bring complex subjects to the table for common folks to understand and get behind. He has a real gift of communication.

[Muddleoftheroad]

15. Performance

There are a lot of ways CEOs "perform" for a company. Many of those are intangible. They include hiring the right people and firing the wrong ones. Stabilizing a company that has current profits but no long-term viability, etc. While I am for expensing options, I am leery about this aspect of his plan.

[Skittles]

16. How about excessive lawyer pay?

they very often skim way too much from the litigants.

[recidivist]

17. If Edwards wants to be taken seriously on this ...

... he needs to start by limiting shoot-the-moon awards to contingency fee lawyers. It will rub a lot of people besides me the wrong way for a trial lawyer to demand limits on corporate compensation while leaving his own racket untouched. At least corporate CEO's are paid via market arrangements by consenting Boards of Directors. Trial lawyers are predators.

[DemDogs]

20. Edwards for workers and consumers

Trial lawyers are not predators. This is Repub nonsense. Trial lawyer compensation is contractual, just like CEO compensation, only the trial lawyer has not selected the people who will set his compensation. Great "consent" -- get your friends to decide on your CEO salary.

You better hope trial lawyers stay alive because for several decades now they have stood between you and callous companies who won't make cheap safety modifications. Remember the Pinto and the $11 plate that would have stopped those rear end explosions? The company decided to take its chances in injury/death lawsuits rather than make the $11 per car expenditure.

Edwards'point, I am sure, is to find a way to rationalize CEO pay. Where a trial lawyer does not collect if she doesn't win, a CEO can get huge salaries even when his employer (the company) is losing. Any means of getting to a rational compensation method is fine.
Glad he is talking about this. And the dozen other ideas he is talking about.

[mitchum]

22. Thank you for countering that nonsense, DemDogs...

and welcome to DU

[terryg11]

18. could be used against him

while many agree with cracking down on corporate fraud, having the government regulate exec. pay many republicans and moderate dems will be against this- it's too much government intervention.
The government can push a program or support something like what he proposes but shouldn't enact a law or anything.

This type of change has to come from the people itself, whether it be the boards that hire the executives or the unions that represent the workers or just the exec's themselves getting some values. If the government started telling execs how much they can make it's going to look like communism and will be branded as such.