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How's this for retirement

  1. Apr 18, 2006 #1

    Astronuc

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    Senator rips ex Exxon CEO's retirement package
    http://news.yahoo.com/s/nm/20060418/pl_nm/energy_exxon_senator_dc_1

    and "For Leading Exxon to Its Riches, $144,573 a Day" NYTimes - April 15.


    Meanwhile - Oil Prices Settle Above $71 a Barrel

    WASHINGTON - Oil prices settled at a new high above $71 a barrel Tuesday as supply threats around the world overshadowed a new report from OPEC forecasting weakening global demand.

    So gasoline will be more expensive for the forseeable future.


    Well, it's not like anyone's forcing you to buy gasoline. :biggrin:
     
  2. jcsd
  3. Apr 18, 2006 #2

    chroot

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    I ride my bike to work as often as I can. It's wonderful, especially in spring. More people should try it.

    - Warren
     
  4. Apr 18, 2006 #3
    Subway rider and/or walker here. My seldom used car gets 30+ mpg.

    If you don't like his retirement package, don't buy his product.
     
  5. Apr 18, 2006 #4

    Pengwuino

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    Yah, corporations should be forced to bow down to public opinion more often no matter how much gas the public decides on its own to use. Consumers' responsibilities and the US Constitution does not apply here.
     
  6. Apr 18, 2006 #5

    russ_watters

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    People use a lot of oil so oil prices are high so oil companies make big profits so the outgoing CEO gets a big golden parachute. Seems logical to me...

    Politician pontificating.

    I'm just upset that I didn't invest in Valero when my parents did.
     
    Last edited: Apr 18, 2006
  7. Apr 18, 2006 #6

    Pengwuino

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    I wonder why aren't senators "outraged" at Bill Gates being worth more then the GDP of many small nations while Windows XP and Office are being sold for $300 and $500 respectively, thus, gouging computer users.
     
  8. Apr 18, 2006 #7

    chroot

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    Personally, I don't think oil prices should be fixed by the government; I still blindly believe in a free-market economy. To make this point clear: I could care less about the consumers who continue to voluntarily buy so much gasoline to fund this little pig-out. They really do have other options.

    I'm more concerned that a $400 million executive retirement package is screwing the shareholders. Keep in mind that most of that package is restricted stock and options that involve the company actually issuing new shares, thus diluting the value of the shares owned by other people. It's a pretty clever way, essentially, of taking a little money out of a lot of investors' pockets and amassing a fortune in your own pocket.

    When you consider that most of the floating shares of publicly-traded companies are held by institutions (money-market funds, mutual funds, and so on), you begin to realize that such retirement packages actually screw everyone who has a 401k, an IRA, a certificate of deposit, a T-note, or any other investment of any kind. That ticks me off, Russ.

    Pengwuino -- this is the reason no one is crying about the cost of Windows. You don't have to buy Windows, but Big Oil is forcing you and everyone else with any kind of market investment to fund this CEO's pig-out.

    Unreasonable executive compensation has been a big issue for a long time now; investors are basically trying to lynch this guy as an example.

    - Warren
     
  9. Apr 18, 2006 #8

    Pengwuino

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    Wait wait wait, since when has MSFT been a private company???
     
  10. Apr 18, 2006 #9

    chroot

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    What are you talking about?

    - Warren
     
  11. Apr 18, 2006 #10

    Pengwuino

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    Microsoft is a publicly traded company just like oil companies. Investment institutions own microsoft just like oil companies. 401k's, IRA's, CD's and MMA's may have microsoft shares as asetts just like oil companies. What's the difference?
     
  12. Apr 18, 2006 #11

    russ_watters

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    Agreed, and frankly, I think high oil prices are necessary to encourage people to find alternatives. Being a believer in the free-market as well, I think that if thin wallets are required to convince people to go back to nuclear power (among other things), then so be it.
    Ehh, yeah, I might agree with that. I didn't read the article and don't know quite where that money comes from, but often these things are tied to stock performance, so it may just be that he got a big package because the stock doubled. If the stock got diluted by 0.1% while going up 100%, am I going to complain? Probably not.

    Options are more fair (to the shareholders) than a stock gift, though, because they require the stock to go up before the CEO makes any money.
     
    Last edited: Apr 18, 2006
  13. Apr 18, 2006 #12

    chroot

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    You have no clue what you're talking about.

    I'm talking about grants of options and restricted stock diluting maket value of a company's float, which affects everyone in the market, including me and everyone else with a retirement plan or investment of any kind. I have no choice; I cannot opt out of it.

    Microsoft pricing a product higher than what you (or I) deem reasonable doesn't affect me at all, unless I actually choose to purchase it.

    Your "argument" isn't even remotely related to mine.

    - Warren
     
  14. Apr 18, 2006 #13

    russ_watters

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    I'm not following you either...
     
  15. Apr 18, 2006 #14

    Pengwuino

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    Oh geez ok nevermind. I understand what you were saying. I seem to have been way off the mark there.
     
  16. Apr 18, 2006 #15

    russ_watters

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    You seem to have been talking about price gouging (which was mentioned in the OP), but that isn't what chroot was talking about...
     
  17. Apr 18, 2006 #16

    chroot

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    The first rule of arguing finance: don't make up numbers to support made up arguments. Many people will say this: I'm a shareholder. What do I care if the company rips me off a little, so long as the share price keeps going up? The truth is that if every other company, in which you are not a shareholder, does the same thing, the entire market is paying for these greedy executive's unreasonable compensation packages. It adds up to a significant impact on the market as a whole.

    This is also incorrect. A gift of floating stock is exactly equivalent to cash. There's no harm to the market at all if a company buys x shares of stock and hands them to the CEO. Most people wouldn't be so pissed off if the companies just paid their execs in cash. Options, on the other hand, create new shares. They don't affect just the buyer and seller, they affect the entire market.

    - Warren
     
  18. Apr 18, 2006 #17
    He's probably the wrong one to pick on for unfair executive compensation. Under his tenure, he took the company from $280 bn market cap to $388 bn. That means he added $108 bn to the company's value and is keeping <0.4% for himself.

    In principle, I'd probably agree, but I'd guess that most investors probably aren't upset that he nearly doubled the price of their stock. It's the guys who tank their stocks and then walk away rich who should be the boogie-men. This is just political posturing.

    Plus, he's a ChemE PhD. I went to all those grad school career counseling workshops and no one mentioned oil mogul. I'm writing a strongly-worded letter.
     
    Last edited: Apr 18, 2006
  19. Apr 18, 2006 #18

    chroot

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    Again, the only people who care that the stock price doubled are the shareholders. These grant-based executive compensation packages screw everyone, even people who have no intention of ever buying the company's stock.

    - Warren
     
  20. Apr 18, 2006 #19

    Pengwuino

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    I still don't get your point chroot. Which investment vehicles actually give the user 0 ability to actually see what companies are being invested in?

    Wait wait don't answer that yet... gotta get a grip on what's going on here.

    Actually chroot, isn't what your extending extendable to every person who gets stock options down to the lowest salesman? Are you saying all stock option plans are bad?
     
    Last edited: Apr 18, 2006
  21. Apr 18, 2006 #20
    You make a good point. I just don't think that this is what the politicians are getting in an uproar about. They're selling a far simpler product: "Look at that rich guy and look at your life. Vote for me."
     
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