AIG chief threatens to quit because of the obama administration

[droski]

AIG chief threatens to walk due to government constraints - Nov. 11, 2009

strange i thought lawgator et all were telling us that these people would of course stay because they had no other options?

[RockyTopVol]

Originally Posted by droski

AIG chief threatens to walk due to government constraints - Nov. 11, 2009

strange i thought lawgator et all were telling us that these people would of course stay because they had no other options?

It wouldn't surprise me if more follow.

[BigPapaVol]

He'll start an avalanche. Then we'll har a bunch of midsize bank presidents trying to run companies. That will be sweet.
Posted via VolNation Mobile

[droski]

Originally Posted by RockyTopVol

It wouldn't surprise me if more follow.

in the wsj article he already said the pay restrictions have led to an exodus of some of his best talent.

[IBlvNTmWrk]

As far as I'm concerned, the run up in pay for CEO's has been excessive since the 90's much the same as the pay for star athletes. I'm all for free enterprise but if it doesn't level off soon, pay for executives in the 21st century could be the equivalent of union pay in the 20th century relative to the impact on profitability of a company.

[BigPapaVol]

Originally Posted by IBlvNTmWrk

As far as I'm concerned, the run up in pay for CEO's has been excessive since the 90's much the same as the pay for star athletes. I'm all for free enterprise but if it doesn't level off soon, pay for executives in the 21st century could be the equivalent of union pay in the 20th century relative to the impact on profitability of a company.

Never. Exec pay relative to income is tiny, even for egregiosly paid guys. Additionally, it's always tied to performance. Union pay just was and is a huge portion of operating expense.
Posted via VolNation Mobile

[droski]

at citi, a company a lot of people consider a company that overpaid it's executives, the overwelmning majority of executive pay was in stock and they were not allowed to sell most of it when they worked there. i know a lot of citi execs that have lost their life savings. the mistake made is giving stock that has already vested or stock options that are already well in the money. as for employees, they are by and large paid for their individual performance and thefore a combination of bonuses AND deffered comp is appropriate.

[rjd970]

If market forces dictate that these top execs get paid what they are, then I'm fine with it. It's none of my business. But all this complaining about only getting paid $10 million instead of $20 million seems kind of shallow.

What does it really mean when CEO's are getting paid 500-1000 times what the regular employee is? Are we really to assume they have 500-1000 times the talent?

[droski]

obama cut salaries by 90%. not many execs are getting paid $10 mil in salary. none i can think of at least.

and some execs are unquestionably worth 500-1000 times the average employee. jamie dimon is exhibit a. as was welsh at GE. and i doubt berkshire's shareholders would be upset if buffett received that kind of money.

[IBlvNTmWrk]

Originally Posted by BigPapaVol

Never. Exec pay relative to income is tiny, even for egregiosly paid guys. Additionally, it's always tied to performance. Union pay just was and is a huge portion of operating expense.
Posted via VolNation Mobile

Yes it is... and in many cases it is the key executives along with the board that determine what the targeted performance levels are. You should read up on Washington Mutual. The top executives made a killing in bonuses by generating high volumes of sub-prime mortgages, and then tried to change the performance targets to continue to receive large bonuses while recovering from the mess they helped create. I'm sure there are many other companies that have done the same.

[BigPapaVol]

Originally Posted by IBlvNTmWrk

Yes it is... and in many cases it is the key executives along with the board that determine what the targeted performance levels are. You should read up on Washington Mutual. The top executives made a killing in bonuses by generating high volumes of sub-prime mortgages, and then tried to change the performance targets to continue to receive large bonuses while recovering from the mess they helped create. I'm sure there are many other companies that have done the same.

I'm sure none of that is overstated regarding WAMU.

Those guys were, unfortunately, paid for volume. The CEO is not involved in the process of determining his pay unless the comp committee is weak.
Posted via VolNation Mobile

[rjd970]

Originally Posted by droski

obama cut salaries by 90%. not many execs are getting paid $10 mil in salary. none i can think of at least.

and some execs are unquestionably worth 500-1000 times the average employee. jamie dimon is exhibit a. as was welsh at GE. and i doubt berkshire's shareholders would be upset if buffett received that kind of money.

I'm not talking about salaries, I'm talking about total compensation. Of the top 10 paid CEO's of 2008, not a single compensation package was less than $40 Million, in a single year.

[rjd970]

Originally Posted by BigPapaVol

I'm sure none of that is overstated regarding WAMU.

Those guys were, unfortunately, paid for volume. The CEO is not involved in the process of determining his pay unless the comp committee is weak.
Posted via VolNation Mobile

If this were brought up last year, would you have considered those WAMU guys involved with the subprime business the "talent" of that firm?

I only ask because I think a lot of this talk about "talent" is relative. I'm not denying these guys know what they are doing and are good at their jobs...but I think a large part of their success is dependent on how the market is performing and their "talent" is dependent on that.

[BigPapaVol]

Originally Posted by rjd970

If this were brought up last year, would you have considered those WAMU guys involved with the subprime business the "talent" of that firm?

I only ask because I think a lot of this talk about "talent" is relative. I'm not denying these guys know what they are doing and are good at their jobs...but I think a large part of their success is dependent on how the market is performing and their "talent" is dependent on that.

No. I don't view a huge mortgage firm as loaded with talent. They're the private version of Fannie and Freddie. Citi and AIG are altogether different companies. Huge difference in investment banks and mortgage aggregators.
Posted via VolNation Mobile

[droski]

Originally Posted by rjd970

If this were brought up last year, would you have considered those WAMU guys involved with the subprime business the "talent" of that firm?

I only ask because I think a lot of this talk about "talent" is relative. I'm not denying these guys know what they are doing and are good at their jobs...but I think a large part of their success is dependent on how the market is performing and their "talent" is dependent on that.

100% true. there are always examples of guys who make way more money then they should because hte market is just going their way and they are taking too much risk. but i've found these guys don't last long term though (just like the wamu mortgage guys who all got fired). most investment professionals i know (and i'm one of them) want to be doing this for 40 years and don't want to risk losing their jobs. all of us have seen guys make big money for a year or even two or three and eventually get fired and have big problems getting hired elsewhere. the rational people would rather make less money and still be employed 10 years later. though part of the subprime mess unquestionably was the worst housing maket in 70 years and even the best and most conservative traders are going to get hammered in that environment.