Sent to me by AT
According to Equilar Inc., an executive compensation research and data provider, the annual compensation of the following CEOs (in USD) were:
President of Toyota: $1 million
CEO of General Motor (Wagoner: $15.7 million
CEO of Ford Motor (Mulally): $22.8 million,
What’s missing is a formula for determining what is a fair salary. I suggest using 365 times 12 hours per day = hours that an executive works as the basis for an hourly rate to be paid. This gives executives the premise that they work 12 hour days, 365 days per year. hat works out to 4,380 per year. Then determine what a “reasonable” pay per hour is.
The claim that outsize income packages are necessary to retain talent is unproven be the GM fiasco. Mr. Waggoners pay package of around $15,000,000 works out to be $3, 425 PER HOUR. And what did the company get for this - leadership into insolvency?
Using the above formula, Toyota’s president earned under $230/hour and look at the great job he’s done. Did Mr. Waggoner do 20 times as well as Toyota? I leave that to the reader.
the same applies to insurance agents.
ReplyDeleteHow much value added to the clients for the commission the agents recieve. 30 minutes of bullshit for 150% of the premium paid by clients.
No wonder there is so much of conflict of interest. No wonder agents prefer and specialise selling whole life and endowment products. No need needs analysis and all the hassles just bull and they get more and faster than lawyer and doctors.
This example shows again the difference between US corporate culture and Japan corporate culture. I admire Japan just for the fact that their society is much more egalitarian than western societies. Just look at top 100 richest people in the world. India and China has numerous entries, Japan, as the worlds second largest economy, has NONE.
ReplyDeleteThe same applies to our gahment's salaries. Just compare the GDP of US and China versus S'pore. By paying himself so much versus Bush and Wen JB, does it mean that S'pore GDP is X times bigger than US and China? Is it more difficult to manage a big country like US and China versus a tiny island. You know the answers and you judge yourself whether it is fair.
ReplyDeleteWorst still, during good times, you will be told what you enjoyed was due to a good gahment and hence they deserved super higher increment. But during bad times, they say cannot be help, we are an open economy and some other bullshits. Sadly, politics here is all about $$$, no more passion or genuine heart to serve the people, just plain selfish motives.
A Japanese company ( Toyota ) and an American company (Ford)decided to have a canoe race on the Missouri River. Both teams practiced long and hard to reach their peak performance before the race.
ReplyDeleteOn the big day, the Japanese won by a mile. The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action.
Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 8 people steering and 1 person rowing. Feeling a deeper study was in order, American management hired a consulting company and paid them a large amount of money for a second opinion. They advised, of course, that too many people were steering the boat, while not enough people were rowing.
Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team's management structure was totally reorganized to 4 steering supervisors, 3 area steering superintendents, and 1 assistant superintendent steering manager.
They also implemented a new performance system that would give the 1 person rowing the boat greater incentive to work harder. It was called the 'Rowing Team Quality First Program,' with meetings,dinners, and free pens for the rower. There was discussion of getting new paddles, canoes, and other equipment, extra vacation days for practices and bonuses.
The next year the Japanese won by two miles. Humiliated, the American management laid off the rower for poor performance, halted development of a new canoe, sold the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses and the next year's racing team was out-sourced to India.
Sadly, The End. You can draw lessons from here and see similarities in other management systems - Banks, Insurers and even Politicians.
The US president and his cabinet did not peg their salaries to the top end in the private sector. If he did, maybe it will be tens or hundreds of millions a year, not less than 1 million. He also does not think he should even though he wields far greater responsibility and power than any in the private sector.
ReplyDeleteBut in Singapore, our leaders think differently because it is uniquely Singapore, not US. To add insult to injury, nothing has improved for the ordinary folks.
It can happen because it is unique tiny island state, unique people, unique gahmen and hence unique situation. Just like US and Japan are themselves unique in their own ways.
But seriously, before this post, i couldn't even imagine Toyota's CEO's pay is only 1 million. A lot of people handling MUCH MUCH smaller organizations are paid much higher. Something is seriously wrong in Singapore and US.
ReplyDeleteBloated remuneration is nothing new. Only to the ignorant and self-righteous maybe.
ReplyDeleteEven some my colleagues are taking back significantly higher than those others who ARENT committed to spending any extra effort to accompany our Top Management at their golf driving ranges during Friday extended lunches.
And thats not even including those alternate working Saturday mornings.
All Animals are Equal, Some more than the Others.
BEFORE anyone would wish to deny that VEHEMENTLY, please try to take a peek at your HR files on your dept payroll listings. (Not that I done so.)
The MM, SM, PM and their cabinet pegged their salaries to the top end of the private sector. We think this is "seriously wrong".
ReplyDeleteIt is seriously wrong because at the end of five years the voters make it happens. So why are you complaining. The wrong was committed by you voters!!! And you will continue to do so. Bet you my last dollar.
Oh YES!
ReplyDeleteWho is to be blamed for high salaries,WHO WHO??
Is like going to shopping,if you find that the items in shop X is VERY EXPENSIVE,then don't support them,go to another shop where the price are more affordable....
Should upright men and women be paid more,you decide $$$
And this happened many many years ago,who's faults??
So,I would go for TOYOTA CEO.
a jobless
To: siewkhim 6:05pm
ReplyDeleteYes it is seriously wrong for gahmen to have such obscene pay. The wrong was committed by the gahmen and indirectly supported by the 66%. We are complaining because we are not part of the 66%. We are complaining because the gahmen ignores the 33%. We are complaining because there is no proportional representation of the 33% in parliament. We are complaining because in the first place the 66% comes about only because the gahmen killed democracy.
Who actually approved this Wa-"goner"'s salary?
ReplyDeleteIt is obvious from his name that GM will be eventually be a "goner".
why majority of shareholders agree to pay this wa-"goner" so much?
Ford CEO Alan Mulally has told reporters he will take a pay cut to $1, as did GM CEO Rick Wagoner.
ReplyDeletehttp://moneynews.newsmax.com/streettalk/auto_ceo_pay/2008/12/02/157209.html
But Japanese boss entertainment bills very high. More over Japanese Pensions paid till you die...even divroce after retirement, New found loved also can enjoy 50% of his pension. Walau.
ReplyDeleteJapanese got Kick back 10 times
more than American?
There's really no easy solution for executive pay.
ReplyDeleteThe only thing I can think of is percentage money back guarantee.
If the company goes to ground, the company has to have the power to retract the salary from the CEO responsible. If the CEO cannot pay, they shouldn't be allowed to work anymore until they pay everything back.
Yes, drastic. That's in my fantasy business world.
By the way, Richard Fuld has a USD$17000 per hour job of running Lehman Brothers to dust.
Time and time again, all the things happening in the economic world right now is just telling us to be irresponsible. Earn while you can, regardless of integrity or competence. How sad. And things like these are still going on.
Remember somebody said that "must have very high pay so that there would be no corruption etc" ?
ReplyDeleteIt is ridiculous to have x times more than the TOP of the big brother.
Jasmin
It is proven high pay does not mean better results.
ReplyDeleteDoes low pay means bad results?
Can government learn from this?
People always say "pay peanuts, you get monkeys". So everybody believes high pay is the only way to go for success.
ReplyDeleteElse, why CEOs get the highest pay?
It all starts with a 5 letter word call G-R-E-E-D. Success breeds greed. greed breeds high risk taking and strong ego, just look at the recent incidents to understand.
ReplyDeleteAnd many of the 66%(i'm one of them) also don't have a choice because of GRC! I have not get to vote for more than 1 decade already. Probably never will have a chance if I don't shift house.
does that mean it is alright to pay insurance agents high com to fill up forms only?
ReplyDeleteWayangnologist 5.10pm,
ReplyDeleteThis is the American system which Singapore thinks very highly of and thus have implemented the same policies both in the private and public sectors. Those who adhere to the confucian teachings of being humble and working hard lose out to the type of people you mentioned. They won't be given a chance. It's perception and how loud you can boast that count more in your assessment by the bosses under the american system, favouritism not discounted. Humility and honesty are way down the list compared to creativity (another word for greed and dishonesty as shown by the financial products they dish out) Now with the high rewards and greed being the cause of the financial disaster, dare we hope Singapore will change course?