https://www.ericpetersautos.com/2024/02/14/why-they-dont-care/
Why They Don’t Care
By Eric – February 14, 2024
*** begin quote ***
People ask why the CEOs of major automakers go along with what’s going on; can’t they see it’s killing their business?
Of course. They are not stupid people. But they are extremely wealthy people. So wealthy they don’t have to care – about anything. Certainly not whether the company they head goes under at some point in the future.
It won’t affect them, you see.
Consider GM’s Mary Barra as a case in point. She is paid around $29-30 million every year. It is difficult for the average middle class person who earns a “good living” to appreciate just how much money Barra is paid (I am careful to not say earns) in just one year.
*** end quote ***
I have long thought that “executive compensation” focused on high salaries and stock options. This has lead to a conflict in “incentives”. The short term focus of corporate management and investment firms has been disaster for the economy, all the “little people”, pension funds, and investors. Corporate management has no incentive to manage for the long run.
It’s time for the Gooferment and the tax code to change the incentives.
I’ve always thought that “corporate management” should be paid is a modest “salary” (i.e., the average paid to individuals in their company), and any “excess” or “performance bonuses” in laddered tiers of non-transferable corporate bonds (with allowances for death and personal bankruptcy). Should their corporation goes “tits up” before those bonds mature, well then that’s just tough luck.
That will realign the incentives quickly.
To “encourage” quick adoption, excessive salary could have a special FU tax associated with it. I’d like it paid to the share owners, but that is getting down the road.
Maybe this would make those i the C-suite care!
—30—
Posted by reinkefj 
Reinke Faces Life 