Re: CEO pay: What those involved in the financial meltdown made

[David Farber <dave () farber net>]

Begin forwarded message:

From: Rahul Tongia <tongia () cmu edu>
Date: September 26, 2008 5:57:20 PM EDT
To: dave () farber net
Subject: Re: [IP] Re:      CEO pay: What those involved in the  
financial meltdown made

Dave,

[personal bias/observation]:

I fully understand bonuses as being expected and part of compensation  
(e.g., on Wall Street), but in a more perfect world, wouldn't they be  
performance based? Then the challenge is how do you rate performance?  
Of the company as a whole, or that person?  Salespersons get paid  
bonuses too.  So how come we see Wall St. bonuses when we have losses,  
sometimes mindbogglingly huge losses? At that point, it's not a bonus.  
It's compensation.
At least with stock options, there was the belief that they would  
benefit only when the stock did well - of course then people started  
playing with numbers, quarterly targets, etc. to manage the stock  
price...

Rahul



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