How to steal, in one easy lesson

mapleleaf's picture

What some bloggers don’t understand, possibly because they have not been owners of common stock in any large publicly-owned corporation, is the way compensation of $10 million or more is commonly awarded to corporate CEOs and other officers.

This compensation is awarded by the board of directors. In theory, the stockholders elect the directors, and these directors run the corporation through a board. But in reality, the elections are like communist-country elections, where there is only one candidate for each slot. Every candidate is guaranteed to be elected, and the election is a farce.

The board of directors nominates the candidates. Those who are already directors nominate themselves, of course. The CEO often recommends the new candidates. What is commonly done is to nominate some other big corporations’ CEOs to the board, so the CEOs end up serving as directors on each other’s board.

Then the game of you scratch my back and I’ll scratch yours begins. That’s how we got to the corporate CEO salary levels we have.

Meanwhile, the government hasn’t done anything about it. At least not yet. This has been tolerated for years, just like the Madoff Ponzi scheme that was repeatedly brought to the Securities and Exchange Commission’s attention and which it decided to ignore.

Where does the money come from to pay these big multi-million CEO salaries? Essentially, it is the stockholders’ money. Many of the stockholders are mutual funds and pension funds, and “the little people” are the ones who have their personal, IRA or 401k money invested in these funds. So in the end the money is being stolen from them.

Anybody who supports the extravagant salaries being paid to CEOs today is obviously blind to what’s going on. These CEOs don’t deserve that much and never did. If Joe the Plumber has any money invested, directly or indirectly, in mutual funds or a pension fund, he is being cheated, and his support for those who cheat him show him as a complete fool.

As an example of what is being paid, consider that in 2007 the CEOs of the five largest health insurers (WellPoint, United Health Group, Humana, Aetna and Cigna) received compensation of $9,094,271, $13,164,529, $10,312,557, $23,045,834 and $25,839,777 respectively. Now you can begin to see why healthcare insurance is expensive. (WellPoint includes Blue Cross Blue Shield of Georgia.)

It is obvious we need to open the eyes of the people and let them become smarter voters. You can be sure all these CEOs like things just as they are.

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