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Originally posted by MedMech
Personally I think American business is back asswards as well I can't understand why CEO's of failing companies actually get pay raises.
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It's just as bad here. The CEO of Air Canada ran the company into the ground and had to be bailed out be Asian dollars. Then, he got a "you didn't quit" bouns of $10Million. Huh? The staff took massive rollbacks and layoffs, and he got a huge bonus. The kicker is that most of the CEO's own none of the stock beyond the airy-fairy options that constitute some of their bonus.
Options are NOT equity long positions. They do NOT put someone's feet in the fire. The one thing I will say about Bill Gates is that his personal fortune is tied primarily to MicroSoft. That is unusual these days.
Canadian senior level salaries have been skyrocketing thanks to increased profits (lower taxes, gov't grants, etc) but the money has done no good. Unemployment has struggled to get below 8% despite huge GDP growth years (4%+ growth, exceptional). The recovery has been incredible, but only a handful of Canadians have shared in it. Banks are an excellent example. Bank profits have increased by huge sums, now amounting to billions and billions of dollars for each bank. CEO's and VP's make salaries in the tens of millions. They own little stock and take no RISK (recall that we wish to reward entreprenuers for their risk) and have platnium parachutes. The branch staff make $30,000 and struggle with layoffs every few months. Profit sharing is non existant.
I was an Assitant Branch Manager when I first graduated B-School. I was happy to have the job as we were in a deep recession with 14% unemployment. My student loan interest rate was 17%. I made $26,000 a year. My boss made about $40K. His boss, a regional VP, made about $600,000. That disparity has become worse in the years since I was there. And "banker's hours?" I worked 100 hours a week for my $500. Yup, that's $5.00 per hour. I gor so depressed when I figured that out, I quit.