Here’s one of those compensation consultants, defending exorbitant CEO Pay, along with a rep. from the AFL-CIO debating CEO compensation packages.
He claims it’s a numbers game, meaning that they’re not really making that much money.
Anchor Mark Haines then asks the labor rep that if it’s true you get what you pay for, why shouldn’t they be paid as they are? He must have known the answer. She says, after what’s happen in the banking industry, did they really know what they were doing?
Haines then points out that Japanese companies, which tend to “kick out butts,” are making far less than American CEOs. Haines then lays the blame where it deserves to be, “The boards have no spine.”
Which is what President Obama said yesterday
[T]oo many corporations have operated for too long is that you have a CEO who basically selects his board; the board, in a fairly cozy relationship oftentimes with the executive, hires a executive compensation firm, which, surprisingly, tends to think that it’s necessary to retain the best talent to pay people $20 or $30 million a year; and we get into the kinds of habits and practices that I think have not been — have not served shareholders well, I think ultimately distort the decision-making of many CEOs.
Late in the afternoon, Jim Cramer and Haines tackle CEO pay. Haines again blames the boards of directors. Cramer, who had transformed himself into a populist since being raked over the coals by Jon Stewart, joins in beating up on the compensation committee chairmen of boards of directors (about 3:00 into the video).