NationStates Jolt Archive

Eh? I never said that. Show me where.

But I go on anyway. Now that you understand that unemployment checks and retirement fees are paid by the government, we can continue.

That's not a money transfer to the company, though. They're not benefiting from the state paying unemployment and retirement to individuals. They are neither legally nor morally responsible to maintain the unprofitable employment of these individuals.

The unions at Inbev complain about several things:

SHOCK!

* They had to accept salary-raise stops for years

Yes'ms...because the adult beverages industry has been undergoing substantial changes of late, and large breweries like InBev have been struggling in comparison to past performance.

* They had to accept several reorganisations, the outcome is more work push

Given the extremely competitive nature of the alcoholic beverages industry, I am not surprised. To survive, even the largest firms need to stay at the cutting edge of drink, fashion and productivity. Especially in an environment where smaller brewers are taking increasingly large chunks of market share from large brewers like ABI.

* The management used the system of temporarily unemployment for their employees.

A service that the state provides that is paid for with taxes. In the US, for instance, firms pay per employee.

* The older people were pushed to go earlier in retirement.

I know that the government is doing that here in the US...any opposition to that?

Now, those last two are actions where the society is paying the costs and where the company is making the benefits. Suddenly the CEO says 'mmm, money, I need money, I need 80 million Euro for myself'

Actually, the company said that if the executives can make sufficient gains over the next 5-10 years, the CEO will receive a bonus that might be up to 80 million Euros. This isn't just a random self-reward. This is a long term incentive for performance.

And it's for this that the unions will strike. First they used money, indirectly, of the society to keep the ship in safe waters and now the greed culture is back.

No, that's not how it works.

No, that's not how it works.

Exactly. But what is broken can be repaired.

I admit even if they (the governement) go on by launching salary caps, it will not be easy to implement, for reasons I already posted before.

Exactly. But what is broken can be repaired.

Wait...so you don't want corporations to pay taxes to the government to cover unemployment insurance?

I admit even if they (the governement) go on by launching salary caps, it will not be easy to implement, for reasons I already posted before.

No, it won't. CEO's will just offshore their compensation to someplace like Antigua, or something. You, yourself have already said they do it to avoid taxes.

Wait...so you don't want corporations to pay taxes to the government to cover unemployment insurance?



No, it won't. CEO's will just offshore their compensation to someplace like Antigua, or something. You, yourself have already said they do it to avoid taxes.

Companies pay taxes for all kind of reasons, not just for making sure that they can put their own employees in early retirement.

Yes, I certainly think that most CEO's are using offshore constructions to avoid taxes. And why not? It's not illegal. The sums are too important.

When a government would install a salary cap, it should take that in mind.

Companies pay taxes for all kind of reasons, not just for making sure that they can put their own employees in early retirement.

For unemployment, though specifically. These employers are not adding any burden onto society that they didn't already pay for. Unemployment insurance is for the benefit of the employees, not the employer.

Yes, I certainly think that most CEO's are using offshore constructions to avoid taxes. And why not? It's not illegal. The sums are too important.

When a government would install a salary cap, it should take that in mind.

How?

For unemployment, though specifically. These employers are not adding any burden onto society that they didn't already pay for. Unemployment insurance is for the benefit of the employees, not the employer.



How?

In the example of Inbev it was not really needed. They just took the opportunity. They have enough cash reserve to keep their people busy but they choose different and push the cost to society. Which isn't wrong, but then the CEO should show some morality and not reward himself with an over the top bonus.

How they can fix it? I don't know, that's beyond my expertise.

And the company isn't liable for the economical unemployment, but they did use it (while it was not really needed) and now they give themselves an over the top bonus. Nobody wants to stop with capitalism, but there's indeed a climate now, to stop the extreme greed culture of a few overrated CEO's and similar species.
That's not an argument. The company is free to employ labour as it pleases, and it's similarly free to stop employing it. Neither act gives it any obligations towards anyone other than the people they actually employ (and those are well defined).

The company is also free to use its funding in whatever way its shareholders see fit. I personally don't think big bonuses for CEOs are the bang for your buck I'd be looking for, but I'm not familiar with this case either.

Either way, the point is that you're trying to link the act of choosing not to employ labour with an obligation for shareholders not to pay their CEO what they want. But you don't have an argument for this, you (just as all those media sources) are relying purely on some sort of common outrage; one that seems to come easily to people when they talk about this issue; to carry you through. But for there to be any cause-effect relationship here, you must first assume a host of obligations on the part of the company which simply don't exist.

That's not an argument. The company is free to employ labour as it pleases, and it's similarly free to stop employing it. Neither act gives it any obligations towards anyone other than the people they actually employ (and those are well defined).

The company is also free to use its funding in whatever way its shareholders see fit. I personally don't think big bonuses for CEOs are the bang for your buck I'd be looking for, but I'm not familiar with this case either.

Either way, the point is that you're trying to link the act of choosing not to employ labour with an obligation for shareholders not to pay their CEO what they want. But you don't have an argument for this, you (just as all those media sources) are relying purely on some sort of common outrage; one that seems to come easily to people when they talk about this issue; to carry you through. But for there to be any cause-effect relationship here, you must first assume a host of obligations on the part of the company which simply don't exist.

Leo, despite the kill-the-big-salaries-for-ceo's atmosphere in the media, I have my own opinion about the subject as well.

I really think that no one is worth 100 million, or 50 million euros or dollars a year.

I assume that you know that it are not the shareholders that decide how much a CEO can earn, but the members of the board.

And we all know that they fit in the old boys network. The CEO in company X is member of the board in company Y, where the CEO of company Y is a board member in company X.

I adore capitalism, but I am not blind for the weakness of the system. Capitalism doesn't work in a small market with few competition and where there is clear protection.

I would even accept the high salaries, but not the high bonus benefits. These are partly thé reason why it collapsed in the financial world. The new school CEO's were playing on the short-term and didn't care about anything but themselves and certainly NOT the company, it's stakeholders, their clients or the society.

I really think that no one is worth 100 million, or 50 million euros or dollars a year.
Well, in that case, you'll never pay anyone that much. And that's all your opinion can realistically mean, because it's just not your place or mine to decide how much others want to pay each other.

Though purely out of interest: if there was a guy who somehow had the ability to save the world from destruction, but he asks for 100 billion dollars as "salary", would that be worth paying?

I assume that you know that it are not the shareholders that decide how much a CEO can earn, but the members of the board.

And we all know that they fit in the old boys network. The CEO in company X is member of the board in company Y, where the CEO of company Y is a board member in company X.
And if that's all you said, I don't think many people would disagree. I certainly wouldn't.

But the point is that you made your argument using the claims of the unions that by firing these workers the firm created a cost to society, thus making it society's legitimate right to decide how much this guy should get. That's a crap argument, and that's the one I'm disagreeing with.

I would even accept the high salaries, but not the high bonus benefits. These are partly thé reason why it collapsed in the financial world. The new school CEO's were playing on the short-term and didn't care about anything but themselves and certainly NOT the company, it's stakeholders, their clients or the society.
Bonuses weren't new though, and these "new school" CEOs had been in the industry all their lives, and in the upper echelons for most of that. The way bonuses were calculated played a big role, but not necessarily through CEOs. Their incentive was at best to agree to increased leverage and follow competitive pressures. It was the traders, structurers and salespeople who had every incentive to buy the most toxic crap and make it look good, either to their own auditors or to clients. Really as far as Wall Street is concerned, I think talking about the CEOs all the time misses the point by miles.

But again, you don't have to be on the Left to make those arguments, and you don't have to call for salary caps to fix it.

http://www.economist.com/finance/displaystory.cfm?story_id=12650356
http://www.economist.com/opinion/displaystory.cfm?story_id=12304785
http://www.economist.com/opinion/displaystory.cfm?story_id=13109560
http://www.economist.com/displaystory.cfm?story_id=13036810&CFID=56639385&CFTOKEN=67220566
http://www.economist.com/specialreports/displaystory.cfm?story_id=11325420
http://www.economist.com/specialreports/displayStory.cfm?story_id=11325347
http://www.economist.com/specialreports/displayStory.cfm?story_id=12957709

Well, in that case, you'll never pay anyone that much. And that's all your opinion can realistically mean, because it's just not your place or mine to decide how much others want to pay each other.

Though purely out of interest: if there was a guy who somehow had the ability to save the world from destruction, but he asks for 100 billion dollars as "salary", would that be worth paying?


And if that's all you said, I don't think many people would disagree. I certainly wouldn't.

But the point is that you made your argument using the claims of the unions that by firing these workers the firm created a cost to society, thus making it society's legitimate right to decide how much this guy should get. That's a crap argument, and that's the one I'm disagreeing with.


Bonuses weren't new though, and these "new school" CEOs had been in the industry all their lives, and in the upper echelons for most of that. The way bonuses were calculated played a big role, but not necessarily through CEOs. Their incentive was at best to agree to increased leverage and follow competitive pressures. It was the traders, structurers and salespeople who had every incentive to buy the most toxic crap and make it look good, either to their own auditors or to clients. Really as far as Wall Street is concerned, I think talking about the CEOs all the time misses the point by miles.

But again, you don't have to be on the Left to make those arguments, and you don't have to call for salary caps to fix it.

http://www.economist.com/finance/displaystory.cfm?story_id=12650356
http://www.economist.com/opinion/displaystory.cfm?story_id=12304785
http://www.economist.com/opinion/displaystory.cfm?story_id=13109560
http://www.economist.com/displaystory.cfm?story_id=13036810&CFID=56639385&CFTOKEN=67220566
http://www.economist.com/specialreports/displaystory.cfm?story_id=11325420
http://www.economist.com/specialreports/displayStory.cfm?story_id=11325347
http://www.economist.com/specialreports/displayStory.cfm?story_id=12957709

I'm not left. Surely not in my country. But what's right here, is left in USA. And what's right there, could be extremist right here. Really :)

To answer your question. It would be wise to pay him his 100 billion dollars.
But managing a company isn't comparable to saving the world.

Ok, I accept that you disagree about the union their remarks, but I stay behind them. I am also aware that in general the view on the relationship between business vs. government rather different is in USA than in Europe. I don't know which one is better. IMHO, for some cases it's better in America, for others I prefer Europe. The 'perfect' system would probably something between. :)

About the CEO. Yes I know it is not the fault of the CEO's only. I would even remark that you can consider CEO as a kind of metaphor for all decission makers. And that's indeed including the traders.

Leo,

Did you know that Harvard Business School is changing its MBA program a little?

The Harvard Business School is fully considered in their MBA program to pay more attention to ethical, sustainable and humane doing business. I think it is pure opportunism. :)

And in Belgium Vlerick and Solvay are doing the same.

In the example of Inbev it was not really needed. They just took the opportunity. They have enough cash reserve to keep their people busy but they choose different and push the cost to society. Which isn't wrong, but then the CEO should show some morality and not reward himself with an over the top bonus.

Wrong. We don't know if they have the ability yet. These bonuses are being paid 5-10 years in the future, and are contingent on corporate success, and overcoming the challenges the firm is currently facing, not in the present money available.

How they can fix it? I don't know, that's beyond my expertise.

Great. Once again an amateur analyst gives us some magical policy proscription, and leaves a public finance solution to the professional public managers, with no regard for the consequences.

I'll give you a hint about salary capping--it's not going to work.

Leo,

Did you know that Harvard Business School is changing its MBA program a little?

The Harvard Business School is fully considered in their MBA program to pay more attention to ethical, sustainable and humane doing business. I think it is pure opportunism. :)

And in Belgium Vlerick and Solvay are doing the same.

What does this have to do with anything?

Wrong. We don't know if they have the ability yet. These bonuses are being paid 5-10 years in the future, and are contingent on corporate success, and overcoming the challenges the firm is currently facing, not in the present money available.



Great. Once again an amateur analyst gives us some magical policy proscription, and leaves a public finance solution to the professional public managers, with no regard for the consequences.

I'll give you a hint about salary capping--it's not going to work.

Doh! In my job, my clients are able to signal problems but are not in the position to figure out a solution. That's why they hire me.

About your hint: it has no worth! You know why? Because you don't tell us why it not would work. At least I'm not such an amateur that is barking around just some one-lined slogans. :)

What does this have to do with anything?

I don't know about your ethics and morality. But it seems that universities & business schools understand that there is a demand for learning future business people how to behave ethical. Maybe we should send the CEO and his close team to Harvard.

To answer your question. It would be wise to pay him his 100 billion dollars.
But managing a company isn't comparable to saving the world.
No, but it means that in principle you agree to the idea that someone's work can be worth that much money and potentially more. Which means you can't really take on "in principle" stand here, you merely disagree with the shareholders/board of directors on how much the CEO's work is worth.

Ok, I accept that you disagree about the union their remarks, but I stay behind them. I am also aware that in general the view on the relationship between business vs. government rather different is in USA than in Europe. I don't know which one is better. IMHO, for some cases it's better in America, for others I prefer Europe. The 'perfect' system would probably something between. :)
I'm aware of some of the views people have in Europe on what businesses are and what they should be doing, but I've never ever seen them justified. And they certainly don't gel with the sort of socially liberal views many of those same Europeans take on many issues.

The point is, if a business has duties towards society, then those duties should be appropriately justified, and they should be based on more than majority opinion.

The Harvard Business School is fully considered in their MBA program to pay more attention to ethical, sustainable and humane doing business. I think it is pure opportunism.
I think it's smart marketing. In the past a lot of HBS grads would have been looking for jobs on Wall Street. Those don't exist anymore, and where they do they pay a lot less. So Harvard, as a sign of the times, will be shifting attention from financial engineering or corporate finance/private equity stuff to what they consider the markets most likely to employ their future grads. And since they haven't got a clue, they just pick on some concepts like this and run with them for the time being until they know what will be needed in the world of tomorrow.

As long as they leave the School of Economics alone, I don't really care. Though as a point to note, I did a business bachelor degree and we talked about ethics and all that stuff all the time.

none of these palatable ?
http://www.ab-inbev.com/go/brands/brand_portfolio/multi_country_brands.cfm

Nope
(ok, they might be, I've never had them though)

We can now make the topic "Super Bonus for everyone!"
Company boards have decided to pay their CEOs larger bonuses because their stocks are going down.

No, but it means that in principle you agree to the idea that someone's work can be worth that much money and potentially more. Which means you can't really take on "in principle" stand here, you merely disagree with the shareholders/board of directors on how much the CEO's work is worth.


So many other things are regulated and fit in rules and laws. Some of them are also not liked by the shareholders or the board.



I'm aware of some of the views people have in Europe on what businesses are and what they should be doing, but I've never ever seen them justified. And they certainly don't gel with the sort of socially liberal views many of those same Europeans take on many issues.

The point is, if a business has duties towards society, then those duties should be appropriately justified, and they should be based on more than majority opinion.


If the lack of super bonuses is preventing a crisis like the current one, then I am all ears.





I think it's smart marketing. In the past a lot of HBS grads would have been looking for jobs on Wall Street. Those don't exist anymore, and where they do they pay a lot less. So Harvard, as a sign of the times, will be shifting attention from financial engineering or corporate finance/private equity stuff to what they consider the markets most likely to employ their future grads. And since they haven't got a clue, they just pick on some concepts like this and run with them for the time being until they know what will be needed in the world of tomorrow.

As long as they leave the School of Economics alone, I don't really care. Though as a point to note, I did a business bachelor degree and we talked about ethics and all that stuff all the time.

The biggest bank in Belgium, Fortis, almost collapsed recently. The former chairman wrote a code (called 'The code Lippens') in 2005 about doing good Corporate Governance. Obviously, he didn't read his own code.

I attended management for midsized companies at Vlerick and we had our doses doing ethic business as well.