Beach Walk 644 – CEO Pay Revisited

I like this concept of “marking the territory” – not like a dog, but as students of consciousness. It is so easy to get caught up in the robotic rush of repetition, day in and day out. I read in Fortune a few months ago about how AmEx has dramatically restructured its CEO pay for Kenneth Chenault. In brief, he gets a relatively low base pay, and then stock options (not restricted stock) if he meets performance criteria over an unusually long 6-year period. It’s worth noting that those options are worthwhile only if the stock price is preserved; there is no guaranteed price on them. I hope other companies will begin to pull back the reins on the exorbitant CEO pay packages that have become too common. Here was my early take on CEO pay: Beach Walk 129 – Math with Rox.

Hawaiian word:
Kumu hoʻolalelale: incentive

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Comments

  1. …and CEO salary is only one component of what I think is abuse. After digging around in Yahoo Finance one day, I watched a CEO buy at $19 (exercised an option) and sold at $85, netting over a couple of million when the dust settled.

    I really don’t know how stock options work, but they seem like a hell of deal on top of a $300k salary.

    I planned to sell at $80 (thru my 401k plan) because I didn’t know if it was going to see $85 – I was less that a buck away from target and was actually happy.

    Maybe this guy can utilize limit buys and sells; I know I cannot within my retirement plan (401k). Anyway, he made the maximum amount of money (profit) and the timing was perfect. While I’m stuck putting in a buy or sales order and praying that when it’s transacted at the end of the day the stock hasn’t swung wildly against my favor. Hmmm…

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