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The Forum > Article Comments > Nothing over a million dollars > Comments

Nothing over a million dollars : Comments

By Valerie Yule, published 14/12/2010

CEOs are paid far too much, especially when they oversee banking disasters: it is time they were reined in.

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*When has the chief executive of a bank, or a speculator in derivatives, ever invented anything that brought substantial benefits to human society?*

Foyle, see it this way. If the CEO of a bank gets it wrong, billions
are at stake, not mere hundreds of millions.

A bank like say Westpac, has 600 billion on its books. That is
six hundred thousand million $!

That is a huge responsibility. If they judge a few corporate loans
wrong, woosh, its gone. It has happened before in Australia.

For that kind of responsibility, you really want to hire the best
brains around. If you have shares in the bank or money in the bank,
you want to know its in the best, most sensible hands.

So wether you pay that person 1 million or 10 million, it has no
effect on the bottom line. The decisions which that person makes,
has billions of $ of effect on the bottom line.

Take a look at the ANZ, which appointed Mike Smith as the new CEO.
Smith was lured from Asia, where he'd had a great deal of experience.
Smith has already had a big effect on the ANZ share price, with his
new directions and policies. He would not have come to Australia,
for a gold watch.

The real problem is, finding exceptional CEOs. They are rare. So
when you do find one, hang onto him/her.
Posted by Yabby, Friday, 17 December 2010 2:18:38 PM
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Yabby,
CEO's do not make the big decisions on their own, at least not those who wish to make sensible decisions.
In banking most of the big decisions are laid off, much as in bookmaking, to spread the risk. How many banks had their fingers singed in the ABC Learning debacle? It wasn't just one.
In my time in heavy industry I was aware of many decisions made because a CEO had a brainwave and many of those didn't pay off.
Too many CEOs are "emperors with no clothes" and are worth no more than about 40% above those on the next rung down.
When greed was not to the fore that satisfied many competent people.
Posted by Foyle, Friday, 17 December 2010 8:17:40 PM
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Yabby forgets too that good CEO's (supposing such creatures exist) only command such a price because the system is competitive (and frankly insane). In the real world they're not half as useful as a bricklayer or a baker.
Posted by Squeers, Friday, 17 December 2010 8:34:28 PM
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*In my time in heavy industry I was aware of many decisions made because a CEO had a brainwave and many of those didn't pay off.*

Foyle, nobody is claiming that the title of CEO guarantees some
kind of intelligence. Yup, some are dummies. On the other hand,
when you see what a Jack Walsh did for GE or a Michael Chaney did
for Wesfarmers, I think that those sorts of people should be
fully compensated, for they are taking on the role of entrepreneur
really, with all the stresses and strains that this entails.

* In the real world they're not half as useful as a bricklayer or a baker.*

Squeers, unless of course, they lost your lifes savings, invested in
the company, then you would be squealing and change your mind.
Posted by Yabby, Friday, 17 December 2010 9:50:45 PM
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Once upon a time a man walked through a swamp of human misery caused by Government greed, immigration programs and subsequent overpopulation.

A leech jumped off a tea tree and started to gorge on his blood, first injecting a blood thinner and a local anaesthetic and then slicing his skin with 3 very hi-tech intersecting cuts. The man was so amazed at the intelligence and innovation of this creature he thought it must be a leader for him to follow. Presently another leech and another jumped on his body and began to gorge. The leeches let him know through their psychic media that they were competitive and not colluding so he was getting good technological value for his blood.

All was well and the man said to himself this must be the best of all possible world to live in. I think I will call it capitalism. But then the leeches dropped off one day and went away to multiply. When the young ones came back to bite him he began to feel weak and ill. He started using the hospital system and complaining to the government.

The Government had meetings and said we can't afford the health costs so we will immigrate more people into the swamp for the leeches to feed upon and we will build crematoriums near that mans house so the midnight smoky wafts of dead bodies and charred coffins will kill him off quickly with respiratory disease and heart attacks. If that doesn't work we will build PVC extrusion factories and the dioxin emissions will kill him even faster.

The leeches lobbyists told the government that was a wonderful idea and asked if their psychic media outlets could float the idea of building 770,000 more houses in the swamp to attract 2 million more immigrants for them to feed on. The Government said that was a wonderful idea and it would make them more powerful so they would not have to listen to any one person's complaint anymore and they could do what ever they wanted.

Continuing,
Posted by KAEP, Saturday, 18 December 2010 7:55:36 AM
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Continued,

They could even build tunnels that cost $1.4 million a meter and make windfall profits out of twice removed secret investment portfolios. Too many people would drown the voices of the few smart enough to complain. The Government knew it was on a good thing!

So life in the swamp got worse for everyone except for the leeches who raised their blood sucking quotas by 50% every year from that time forth and for the Government who were so rich they could afford nuclear weapons so they could never again lose another election.

And the leeches all raised their voices in unison: "We leeches are innovators who must be admired for our cunning. We are never paid with too much blood, even if we oversee the odd banking disasters:you depend on us for you personal salivation & it is NOT time, and there will NEVER be a time for us to be reined in."
Posted by KAEP, Saturday, 18 December 2010 7:56:49 AM
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