Supreme Court To Hear Case About Excessive Pay; Parallels Seen In Executive Compensation

Washington Post:

The Supreme Court this week will hear a case that raises bedrock questions about the ability of the market to set "reasonable" corporate compensation, and experts say its outcome could hold important clues about the judiciary's view of extraordinary interventions in the economy by the executive branch and Congress.

Read the whole story: Washington Post

Comments

[zombywulf]

You don't have to see the "Corperate Stooge" tattoo on Roberts forehead to know what's gonna happen here, the brown ring around his mouth should tell you right away.

[RTIII]

The reporting SHOULD have included SOMETHING about the case so we could have SOME idea what kind of rights are on the line here.

I see the issue as one of manipulated Bylaws of public companies that keep shareholders from being able to effectively control who's on the board. So long as the executive gets to control who's on the board, they'll always rake all the profits possible off the top and grant themselves huge portions of the ownership (shares) of the corporation.

What this country needs is a new compact - a new social contract - between corporations and the public. They are not natural persons and have entirely to many rights as if they were one. The entire framework needs to be restructured so that some rights - like ability to own of property - are conveyed while others - like "right to privacy" - are curtailed. What has happened is that originally there were no separate rules, so of course, little by little, corporations gained the rights of natural persons because these were the only frameworks available at the time. Thus, the system morphed over time. A whole framework that sets out basics of corporate rights, obligations and, for publicly traded organizations, governance, is long overdue.
.

[unclelew]

You're right on track.
Unfortunately this is a Robert-Scalia courts. Their first inclination will be to increase the fees because, they're sure, it — along with slavery — is what the founding fathers would have wanted.

[BlueSkyPilot]

Close all the tax loopholes.

[pj-smith]

How about just accountability?
if you FUBAR your company, you don't get absurd compensation for doing so.

That's the issue we have been dealing with.
That these guys get tons of bucks even as they bring down their companies and the economy with it.

[mergina]

Gee, I wonder what the result of that waste of their time is going to be?

[nancytheragingliberal]

It should be interesting, however, I'm sure that the far right branch of the Court will agree to "bidness" as usual. Those Conservatives on the Court never met a corporation that they disagree with. That is why I'm thrilled that the Palin-McCain ticket did not prevail b/c the Court would have veered even more to the far right. My Sonia S. is impressive and I'm happy she shows up to my S. Court, puts on her black robe and does business for the American people.

[MadHeart]

I expect no less from them than, It's OK, boys and girls. Unleash more of your greed--after all, It's "free enterprise."

[nancytheragingliberal]

MH, Yes, let the demons continue on their path filled with greed and say how wonderful "free enterprise " is for the American people. I suspect another huge bailout is just around the corner. Americans hold onto your wallets b/c they are coming again and you had better put up the money or el$e, the world will collapse.

[Viper]

The answer is not trying to set compensation levels which is likely unconstitutional.

The answer is a tried anf true method we use to use... Very high upper tax brackets.

You want to rig the system and pay your self 20 times more than whats reasonable... no problem...

The IRS gets 90% of the excess and thanks you! or you can pay yourself and the government less , pay your workers more and invest more back into the business... the choice is yours.

This excess compensation problem only occured when we did away with the top 3-4 tax brackets and inheritence taxes. We rewarded greed and we got greed. We deregulated and we got Chaos.

No surprises...

Regards

[VPN]

I totaly agree and BTW. very well said, thank you!

[whoskiddinwho]

And we have R.Reagan to thank.

[drumz]

You proposal is right on!

Repeal all the republicant tax cuts to the wealthy. Bring it back to 90%

[AuntWilma]

Back in the 50's the marginal rate peaked around 94%. It prevented the abuse discussed in the article and also prevented the nation's privately held wealth from becoming concentrated into a very few hands, as it has today.

I just can't help but wonder how the people who changed the tax code and repealed Glass-Steagal can call themselves conservatives, since those two actions were anything but conservative.

[entropychic]

therefore this is an ethical issue, yes? of course the supreme court is not going to advocate for putting a cap on executive pay - they "earn" it afterall.....

what is at stake

and not so much because of the mutual fund fees relevant here

is

how much MORE PERCENTAGEWISE

should the higher ups earn vs the workers?

the workers - the MAKERS and GENERATORS of things?

check back to the 70s - it was far more fair, far more realistic. digestible

[VPN]

Um NO they do NOT earn it, they manipulate the system to enrich themselves beyond any level of reasonable compensation because they can.

[Zenith1959]

Don't think the supreme court would rule against excessive pay, but maybe the government could refuse the have contracts with companies who's CEO's make over a certain amount of money.

[hopefull252]

The court should hear the case for two reasons.

First fee's on capital should be considered a tax since banks create nothing there for the money needs to be justify as a public benefit. Banks were created for the benefit of the people not the bankers.

Second the banks are have now used public money, this put a new dimension to the case. These fees backed by taxpayer dollars merit a reduction in pay for the managers of the companies.

If a banks destroys wealth fees should drop and compensation reduced to reflect the loses.

That is free markets if not it a monopoly and tax without representation.

[Jesster]

You're kidding, right? What about auto insurance? Or child safety seats? Or vaccinations to attend public schools? Or license plates, car stickers, etc. - just to name a few.

[Jesster]

The above comment was directed to zwitterion - who thinks this will be the first government mandate to make a purchase or suffer fines and other penalties.

[Gronkie]

We can all decry the incredible amounts of money that goe to executive compensation, but if they "earn" that money without doing anything illegal, and their company boards authorize that pay scale, and the company is not subsidized by the federal government, then I really doubt that the Supreme Court will interfere.

[Jesster]

It may come down to how you want to define "government subsidies".

[hopefull252]

Justify earned income we all work as a society and we are all equal people. A banker creates nothing for the public good if it defrauds the people.

[flabingo]

Maybe Carl Icahn will take a shot at Citybank

[entropychic]

please learn to spell citibank

[Checquoline]

Why can't the banks pay a higher rate of interest on CDs and money market accounts if they can pay those huge bonuses? I think we the people should demand it.

[baba2nde]

FWIW, Chief Justice Roberts (SCOTUS) makes $217,400 a year. Judge Judy (Sheindlin, CBS) makes $45,000,000 a year.

[Rapier]

Does it say something about our society?

[rbchilds]

Yes it does. It says that we value entertainment more than honest work.

[austin4]

Judge Judy,,,is much smarter than Chief Justice Roberts.

[AuntWilma]

Corporate management has subverted the capitalist system, diverting vast amounts of profits into their own pockets, and away from dividend payments to stockholders. I'd certainly call it a breach of a the fiduciary relationship. If we're truly a capitalist country, the government will legislate to prevent such a subversion and enforce that law. I'm sure something could be worked into the tax code to prevent such abuses. Otherwise, we're regressing as a society towards a feudal-like system.

[GeoLee]

Progressing towards? Honey, we are there!