Re:Carly Fiorina: Government shouldn't decide executive pay
by Retric on Thursday February 05, 2009 @09:19PM
(#469229)
Nothing is saying they cant give them 1 billion in stock, the point is they can't suck money out of the company until the government get's their money back. The government has a long and successful track record of turning companies around that have say mob connections where people cooking the books. In some way this is basically the same thing. Companies payed high dividends and passed out bonuses and stock options like candy while ignoring the risks they where taking.
Some of these company's would have been fine if they had not increased the dividend they had payed from what they where paying out 5 years ago. Every time they sent a dividend / bonus out the door they where hiding just a little more of their profit from the type of risks they where taking. So, if the company is run into the ground again the CEO will get 500k/year, but if they pay back the government their is nothing preventing that CEO from walking away with 100 million / year which seems reasonable.
Some of these company's would have been fine if they had not increased the dividend they had payed from what they where paying out 5 years ago. Every time they sent a dividend / bonus out the door they where hiding just a little more of their profit from the type of risks they where taking. So, if the company is run into the ground again the CEO will get 500k/year, but if they pay back the government their is nothing preventing that CEO from walking away with 100 million / year which seems reasonable.