I thought the OP was talking about current CEOs - McGuire is not their current CEO. And the original quote was that “salary” was not a large portion of revenue. What you are talking about is not salary, it’s parachute money. I did not, however, mean to imply that you thought cutting his salary would have a large impact on health care costs - you never said that.
I have no love for rich CEO’s, but I hate misrepresentation.
McGuire was not given a billion dollars when he left United Health. What happens was that he was allowed to keep a portion of the stock options he had already earned, although enough was taken from him to be called the largest “clawback” in history.
Here is an article that details the reality.
You can argue the appropriateness of the entire series of events, but a golden parachute is not the same thing as stock options which had previously been granted and which would have been his whether he left or not.
There are sufficient legitimate complaints about CEO pay that making up horror stories is counterproductive. It just leads to the assumption that everything you say on the subject is a lie. The quote is from Wikipedia, so I am not accusing septimus of lying but just saying that’s what happens when nonsense gets into the public sphere.
I apologize for misrepresentation. I’m not executive compensation junkie and had never heard of that parachute until I Googled UNH a few hours ago. Whatever hyper-technical details you want to go in, 1.1 billion is more than 8 million and not considered “itsy bitsy teeny weeny” in any dialect of English.
I Google’d in response to a clear misrepresenatation about the size of executive compensation.
The itsy-bitsy teeny-weeny characterization was IGNORANT (and I doubt OP was overly concerned about the difference between “salary”, “parachute” and “stock option compensation”).
I corrected the ignorance. And you respond with hyper-technical obfuscation, naturally refusing to admit to any ignorance.
You win. I concede the debate. I could argue till blue in the face and ignorance and idealogy would prevail.
Good luck with your health care costs.
I apologize for misrepresentation. I’m no executive compensation junkie and had never heard of that parachute until I Googled UNH a few hours ago. Whatever hyper-technical details you want to go into, 1.1 billion is more than 8 million and not considered “itsy bitsy teeny weeny” in any dialect of English.
I Google’d in response to a clear misrepresenatation about the size of executive compensation.
The itsy-bitsy teeny-weeny characterization was IGNORANT (and I doubt OP was overly concerned about the difference between “salary”, “parachute” and “stock option compensation”).
I corrected the ignorance. And you respond with technical obfuscation (do you still honestly consider a mere 8 million dollar salary typical after reviewing the true facts I presented? is focussing on a specific year with lowest compensation intellectual honest or just a way to “win” a debate?), naturally refusing to admit to any ignorance.
You win. I concede the debate. I could argue till blue in the face and ignorance and idealogy would prevail.
Good luck with your health care costs.
Oh! And by the way: Both of you, in your quest to downplay the 1.1 billion parachute, overlooked the ordinary compensation of perhaps 124 million paid to the CEO the year before!! (I don’t have a calculater handy. Is 124 million more than 8 million? Is it itsy-bitsy teeny-weeny?)
Well, yeah, percentage wise. I still stick by my non-ignorant, itsy-bitsy, teeny-weeny claim. All of you anti-capitalists seem to think in objective terms, and that’s not how an economy works. I’m sorry that a CEO has more money than you think he should have in absolute terms, but a board of directors working at the behest of the stockholders seem to think that the outlay is worth it, because it’s a drop in the bucket in overall relative terms.
And, do you even know what stock options are?
Sure, they’re a way to pay employees under the table so that the income can be characterized as capital gains rather than salary.
What, you think that they’re a way to reward employees who create added value for the company? When the share price dips too low, the stock options are revalued at the new, lower, price, so there’s no downside for poor performance.
And of course, when the company tanks so badly it needs federal assistance to stay afloat, they have to pay special “retnetion bonuses” so the people who massively screwed up the company stick around to “help” it, rather than jump ship for somewhere else. (Assuming someone wants them).
When a group is entitled to basically set their own pay, since boards are trained seals and engaging in a massive circle jerk, then no surprise how high it goes despite the reality of actual performance.
But I agree - the problem in health care is not just executive salaries; it’s just symptomatic of a system divorced from market realities. Employers pay whatever it costs because they are obliged in order to keep employees. Hospitals charge whatever they can because the insurer will pay. Employees with full coverage don’t do anything about this; and it’s not like the choice is laid out - $99 at this doctor, $125 at that one - walk right in and pick your doctor; the system is sufficiently complicated that even if you wanted to, making a choice based on price is almost impossible.
It’s the ability of a hospital to charge 500 times market price for basic items. It’s the ludicrous salaries and commissions paid to everyone, and the consequent high prices charged for everything. There’s plenty of money and blame to go around.
I never said it was itsy-bitsy teeny-weeny. That was another poster. I don’t care what adjectives are used - my comments about it being tiny, tiny rather than just tiny were meant in jest.
I just posted some data. The company I picked, I picked merely because it was the first company listed on the list provided by another poster, earlier in the thread. I used the salary provided by the previous poster as well, mainly because it was there. Then I pulled the revenue from Yahoo finance, which is pretty simple.
When I said that the I thought that OP was interested in current in CEOs it was because I thought that the OP was interested in current CEOs, as he said who is getting rich, not who was getting rich.
As to whether the OP was interested in parachute vs. salary, you are probably right that the OP wouldn’t care about the distinction - but the quote you were addressing did specifically indicate salary. I’m sorry if that upsets you.
Thank you, I wish you good luck with yours as well. And there is no need to concede a debate - it’s about trying to provide information that is relevant to the OP. The information that you provided has value, just as the information that I did does. There is no need to make it personal.
Sorry I acted annoyed. (So annoyed I seem to have double posted. :smack: )
But I’m not sorry for being annoyed. Posters seem eager to find the salary of a “mere” 8 million dollars as confirmation of an “istsy bitsy teeny weeny” point, yet completely ignore the 1.1 billion “parachute”, the 145 million salary, and the 98 million stock option realization (to the same man who “only” got 8 million). Data that suggests OP has a point, and, with over 1% of UNH’s revenues in one year spent for the “parachute” suggests that the “itsy bitsy teeny weeny” designation was, indeed a teeny-tiny bit exaggerated.
And some pissant wants to know if I know what stock options are. septimus feels no special urge to flaunt his knowledge but happens to know more than most of you suspect he does. While option appreciation can be viewed as diverting stockholder gains rather than company revenue, it is often simplest and best just to postulate a reduced closed system. Money diverted to a CEO for his private jets and Aegean Islands is money that’s not spent on lowering rates or improving health care. Yes, it’s a reward for service. One wonders what that service was. Not emptying bedpans, I’d suggest; more likely for helping design new ways to deny coverage.
And I in turn just typed UNH back into Google. Ironic that it led to the 1.1 billion “biggest ever” boondoggle! 
What I hear are technical excuses (which you almost admit are contrary to OP’s likely intent) to justify the “8 million itsy bitsy teeny weeny” claim, rather than any eagerness to acknowledge that OP and septimus have a point. We can agree to disagree as to whether the 1.1 billion dollar compensation was egregious, but it certainly wasn’t “itsy bitsy teeny weeny.”
I never said it was - you still seem to be missing that. It’s not, clearly not. Not at all. I hope that clears that up.
I “get lost” in these threads because I’m interested in facts and consequences, not in the personalities or foibles of individual Dopers.
In this case, interesting questions include: Is executive compensation egregious? Does it affect the cost of health insurance? (For the record, the answers are 1.Yes, 2. Little direct effect, though more than an itsy-bitsy teeny-weeny effect.)
Don’t take offense, but I wasn’t so much missing your point, as not caring about it. I found egregious compensation examples as soon as I Google’d UNH. Acknowledging those examples would “give me closure.” Defending a contrary claim on hyper-literal grounds is beside the point, IMO.
[Moderator Note]
septimus, insults are not permitted in GQ. Since this is a bit oblique, I’m making it a note rather than a warning, but I strongly suggest you cut back on the snark in general.
This goes for everyone. Dial it down.
In any case, this thread is probably out of GQ territory by now, so I’m going to move it to GD.
Colibri
General Questions Moderator
If you’ll go back up to the very top, you’ll see that I said, “CEO salaries – even highly inflated ones – are a tiny, little, itty, bitty percentage of revenue, and still a very small percentage of the net.” You’ve not shown me wrong at any point. It’s downright stupid for you to insist that I think 8 million (or whatever sum you want to pull up) isn’t a large sum of money. It sure as hell is a large sum of money. But it’s still an itsy-bitsy percentage. Additionally, McGuire served as CEO from 1991 to 2006, and so it’s an itty bitty, teen-tiny bit disingenous to credit his parachute to a single year of performance.
I’m that pissant. So, bravo, you apparently do know what they are, how they’re paid for, and aren’t as stupid as you sounded when you, yourself, attributed them as some type of direct compensation.
Well this is what he did according to his Wikipedia entry: “When McGuire joined United, it was an unprofitable regional health maintenance organization with annual revenues around $400 million.[3] When he left, United was one of the largest, most profitable, and most diversified healthcare companies in the world, with more than $70 billion in annual revenues, more than 50,000 employees, and more than sixty million health plan members.”
Seems like he earned what was his.
But your #1 has nothing to do with the cost of insurance, beyond an insignificant, itsy-bitsy percentage. And again, #2 is itsy-bitsy. How much do you really, honestly think premiums would drop if the guy had made nothing? You’re not using your brain. You’re being distracted by the fact that the guy made a lot of money, without any thought about the effect of that money on the company’s performance.
Its not so much a matter of what percentage of the pie the CEO takes, its a question of what decisions the CEO makes to ensure that slice.
For instance, a typical scenario from the 90’s, which many of you may recall. Throckmorton Industries brings on a new CEO, who will be paid incentives based on stock price, he will be paid relative to how he rewards investors. The new CEO is Scrooge McDuck, and he swears to cut labor costs, trim benefits, and make Throckmorton Industries “lean and mean”. Wall Street is masturbating like a motherfuck over that news, stock price soars, McDuck makes huge money, people get fired, other people work their asses off to cover for the missing people, all the while looking over their shoulders for Human Resource Finger of Doom…
Its not the amount of greed involved, its the nature of greed itself. If you will be willing to injure someone who works for you in order to make a couple bucks, you suck as a human being. If you are willing to cut corners to people’s medical needs, you totally suck as a human being.
Then, of course, you got people who only kinda suck at being human, but when offered the benefits that total suckitude can offer, will rise to the occasion.
Its not so much the money spent on CEOs, its what it says about us, about what we value, that we value a decision-maker and meeting attender a thousand times more than we value a teacher, a fire fighter, an EMT, and so on.
No, Mr Gecko, greed is not good. Greed is destructive of the spirit and the conscience. Lust puts on a pretty good show, moral corruption wise, but not a patch on Greed.
CEO as a percentage of health insurance premiums isn’t a problem. The problem is congressionally condoned corporate communism. Health insurance is a non-competitive market, and the insurance companies have no incentive to produce a better product. CEOs are paid based on their ability to maximize profits, which is done by delivering as few services as possible to the customer.
This problem pervades the insurance industry. Insurance is basically a form of gambling. Like the problems associated with financial derivatives, the incentive to get something for nothing becomes dominant. The heart of the health care crisis we face is the overwhelming cost of all possible health care that could be provided to people if no standard of need or efficacy is applied.
“Corporate communism”, eh? I like it, therefore its mine!
And therin lies the problem. The stockholders are more important than the “customers”. Can’t pay on claims because the stockholders have somehow been guaranteed a profit. I didn’t know that’s how the stock market worked.
Right, but unless one of the stockholders is Warren Buffet, they have little or no say in CEO compensation. The board of directors decides how much the CEO will earn, and the board has little or no incentive to cut his pay because that might affect how much they earn at their own CEO jobs in the next high-rise over.
That’s how all for profit corporations work. Sure, they do what they can to try to please the customer without affecting the bottom line, but the bottom line is why companies exist. Some companies may appear altruistic (consider how major corporations are “going green”), but that perceived altruism has the specific purpose of making the stockholders more money.