Another big problem w/r/t unhinged CEO compensation are incestuous boards of directors, glad-handing each other's companies and enable such greed. Boards also need to be more transparent and accountable to shareholders and employees, not just the CEOs and upper management.
And, of course, institutional investors play a big role in this complicity, when fund managers turn a blind eye to corporate mismanagement because they are either more concerned with short-term profits over long-term viability; or they are complicit, getting their pay to play kickbacks and egregious bonuses for their hedge fund and credit default swap shenanegans which create paper wealth.
But I have to admit, the libertarian in me does not like such overt legislating of capitalism in this way (for many of the reasons already outlined). Oversight and regulation for health, safety, and environmental reasons are one thing-- but ultimately I think market forces should (and will) decide economic concerns such as price and remuneration... Hell, as much as I hate seeing the de-industrialization of our country, I don't know if such cost of manufacturing concerns should be legislated either.
I hope (and really do believe) that the out of control executive wage and bonus inflation of the past couple of decades is coming to an end because of this depression... shareholders who've seen such huge losses are hopefully not going to stand for continuing the $20m salaries and $100m golden parachutes anymore. But, just like the cycle of business, this social responsibility is a cycle too... soon enough, I'm sure we'll have another gilded age in the mid-21st century once memories fade and future Republican admins and congresses loosen whatever 'Newer Deal' regs get put into place during this mishigas...
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And, of course, institutional investors play a big role in this complicity, when fund managers turn a blind eye to corporate mismanagement because they are either more concerned with short-term profits over long-term viability; or they are complicit, getting their pay to play kickbacks and egregious bonuses for their hedge fund and credit default swap shenanegans which create paper wealth.
But I have to admit, the libertarian in me does not like such overt legislating of capitalism in this way (for many of the reasons already outlined). Oversight and regulation for health, safety, and environmental reasons are one thing-- but ultimately I think market forces should (and will) decide economic concerns such as price and remuneration... Hell, as much as I hate seeing the de-industrialization of our country, I don't know if such cost of manufacturing concerns should be legislated either.
I hope (and really do believe) that the out of control executive wage and bonus inflation of the past couple of decades is coming to an end because of this depression... shareholders who've seen such huge losses are hopefully not going to stand for continuing the $20m salaries and $100m golden parachutes anymore. But, just like the cycle of business, this social responsibility is a cycle too... soon enough, I'm sure we'll have another gilded age in the mid-21st century once memories fade and future Republican admins and congresses loosen whatever 'Newer Deal' regs get put into place during this mishigas...