America's Corporate Benedict Arnolds

[Ted Striker]

By the way, who REALLY takes the time to actively vote on all the companies they are invested in? Lots of people are into mutual funds, which are invested into many companies at once.

Usually it's an oligarchy of major and minor stakeholders that may actually know about the companies they have invested a major sum of money in.

Nobody else really has any idea what's going or has any influence into the company to make that much difference to sway how much money the executives are making.

[Flubber]

Originally posted by Oerdin


Further more the government taxes transactions so it is a lie to claim that it is double taxation when profits are given to share holders. Legally a corporation is a seporate legal entity very m uch like a person. A share just gives someone rights to one share's worth of profits a company makes and one say in decisions but the share holder is legally a different person then the company. Thus legaly the transfer of money from the company to a share holder is a transaction between two legally different entities. Thus it generates a tax.

The company is covering a contractual obligation buy taking some of its profits and giving them to someone else just like you are when you pay for your household utility bill.

Thanks for a review of corporations 101 . I've only had 11 years of practicing corporate law.

Taxation theory indicates that you have to consider both transactions. A "profit" inside a corporation is pretty much useless to shareholder (except to the extent it increase share price). The idea is that an individual can earn a dollar in a given business personally OR they can incorporate, run the same business and then pay themselves a dividend. The goal is to have equivalent taxation for either structure. In theory you could reduce corporate tax to ZERO and tax the cash at a higher rate going to the shareholders

Originally posted by Oerdin
Except these are companies which report billions of dollars of profits to share holders then claim they just couldn't possibly survive if they had to pay taxes to the government. These are not companies which are generating loses.

I have no idea what these companies claim. I just say that the stats used are garbage. I don't say that his assertion is false as I have no evidence to refute it but his evidence in support is a pile of crap. It would be like me citing a company as a success as their profitability went up 1000% in a year-- The number is laughable.

[Ted Striker]

Originally posted by Flubber
It would be like me citing a company as a success as their profitability went up 1000% in a year-- The number is laughable.

You could have been the CFO of any .com with those 1999 numbers.

Actually those numbers are way too conservative for the .com era.

[Saras]

Originally posted by Ted Striker


What's YOUR point? You just told me they couldn't live without a CEO?

You have to admit that a leaderless corp is worse off than a corp without employees that were redundant in the first place.

My point is it's alot easier than a line worker to live off their savings than CEO's that are raking in cash, and you know, getting $48 million severance packages.

Tru dat.

Not really. Cause that's not the final answer, silly.

How is it not the final answer? The science that studies the issues we're discussing is... ECONOMICS, ne c'est pas?

Even the government has stepped in, and set limitations on CEO compensation.

Hey, your government has also said there were WMD's . Good standard for right and wring, this Gummint' thingy.

Unfortunatley many companies have loopholed their way around the law by giving out creative total compensation packages.

Legal loopholes

Saras, I didn't know you were a CEO.

Not only that, but also a director of three outside boards

[Ted Striker]

Originally posted by Saras


You have to admit that a leaderless corp is worse off than a corp without employees that were redundant in the first place.

I think it depends really, on how good or bad that leader was. And how long the corporation goes on without a leader in place. Sometimes the underlings can keep the ship running smoothly without breaking anything.

But more people who can't take the economic slight are hurt when they are lower level workers.

How is it not the final answer? The science that studies the issues we're discussing is... ECONOMICS, ne c'est pas?

Because we have seen runaway economics in the past that has gotten to extremes, where the government has had to step in and put a stop to the excess. Teddy the Trust Buster used to PWN silly abusive trusts, for example.

Hey, your government has also said there were WMD's . Good standard for right and wring, this Gummint' thingy.

Well, the particular government that passed the legislation was a past administration. Though you have my full agreement that current administration is 100% full of irresponsible crap.

Not only that, but also a director of three outside boards

Do me a favor and think about the little guy the next time one of your boys asks the board to approve a round of layoffs. Refuse these jerks performance bonuses if their leadership resulted in cost-savings, but most of that cost was due to layoffs.

[Ted Striker]

Speaking of Pfizer, here's an example of how silly some of these companies are with regards to CEO compensation:

1. They give him a BIG AZZ raise:

NEW YORK (AP) - Pfizer Inc. CEO Henry McKinnell last year received a 72 percent pay increase to $16.6 million thanks to a large restricted stock award.

McKinnell earned a base salary of $2.2 million and a bonus of $3.9 million. He also received a restricted stock award of $4.3 million that he hadn't been granted in the two previous years. His salary also included $5.81 million in common stock as part of an incentive program, and $307,454 in retirement savings.

McKinnell also received 525,000 stock options last year, down from 1 million in 2003.

In 2003, he earned $9.7 million, including a salary of $2 million and a bonus of $4.6 million.

2. But now senior managers are not getting raises?

The filing also said Pfizer's senior managers would not receive salary increases this year because of the need to control costs.

3. And now they are trying to figure out how to reduce costs by $2 billion?

Next month, New York-based Pfizer will hold an analysts meeting where it is expected to announce how it will reduce costs by $2 billion.

http://www.ahrp.org/infomail/05/03/10a.php

[Ted Striker]

4. And finally, a quick Google search for "Pfizer layoffs" brings back alot of hits:

Pfizer was unspecific about where the cuts will occur, except to say that nothing is sacred. Layoffs in Pfizer's 115,000-person workforce are likely, especially in manufacturing. "You don't have $4 billion in cost cuts without cutting a substantial number of heads," says Lehman Bros. analyst Tony Butler.

Pfizer has already closed a handful of plants, and Butler says 20 of the almost 90 remaining could go.

http://www.usatoday.com/money/industries/health/drugs/2005-04-05-pfizer-warning_x.htm

Of course, companies need to trim bloat when they can, but I'm curious to see what kind of paycut the CEO is getting this year.

[Saras]

Originally posted by Ted Striker


I think it depends really, on how good or bad that leader was. And how long the corporation goes on without a leader in place. Sometimes the underlings can keep the ship running smoothly without breaking anything.

Sometimes, yes. Sometimes pigs fly as well, if the catapult is of the right size

But more people who can't take the economic slight are hurt when they are lower level workers.

True.

Because we have seen runaway economics in the past that has gotten to extremes, where the government has had to step in and put a stop to the excess.

You'll have to explain how this is the fault of the science of economics

Do me a favor and think about the little guy the next time one of your boys asks the board to approve a round of layoffs. Refuse these jerks performance bonuses if their leadership resulted in cost-savings, but most of that cost was due to layoffs.

Layoffs are so passe. We now look at how to boost margins by "adding more value to the customer", i.e., raising prices without them noticing or with them not minding

[Dinner]

I've always seen lay offs as a sign that a company has been very poorly managed. Good companies like Toyota are able to properly forcast demand and keep its workforce in line with demand so as to avoid big hiring binges followed by massive lay offs. This is good managment. Bad management is when the executives stop paying attention, let bloat settle in, and then try to cut. They took their eye off of the ball and became complacent so that management has already shown they've failed in the past and should be shown the door.

Pfizer, IBM, Boeing, Time-Warner, Saks, and the rest aren't companies which are hurting so bad they should be getting subsidies and free rides without taxes.

[Saras]

I think the worst people in this regard are US investment banks. They usually overhire and later ovefire. At least that's the rep they have in London's City.

[chequita guevara]

Rarely are there "redundent" employees at a company. Layoffs generally mean longer hours for those who don't get fired. In other words, the work still has to get done, it just gets done by the drones for free on what should be their time.

[chequita guevara]

Originally posted by Flubber
I haven't researched the companies involved but a couple of points

1. You folks do realize that there are such things as carrryovers and carrybacks of losses.

That's crap. I don't get this priveledge, why should they?

2. In most countries, corporate profits are taxed again when paid out to shareholders. Is this not the case in the US?

Not anymore.

[Flubber]

Originally posted by chegitz guevara

Originally posted by Flubber
I haven't researched the companies involved but a couple of points

1. You folks do realize that there are such things as carrryovers and carrybacks of losses.

That's crap. I don't get this priveledge, why should they?

Actually I believe if you checked you would find that you CAN carry forward losses on your personal tax if you make a loss as part of running a business. I would be suprised if that is not the case (Again the harmonization concept in taxation is that a business whether or not it is incorporated should get similar tax treatment-- I don't know how well it currently works.)

Do you disagree with loss carryforwards?? If a business loses 100 million 1 year and makes 1 million the next, you expect them to pay tax even though net they are down 99 million?


I do stick by my guns that taking profit and tax from a given year is GARBAGE as a measure of anything. Its just something that "looks wrong" that the uninformed can get riled up about.

[Flubber]

Che

and seriously . . . people in the US don't pay tax on dividends ?? I knew that you folks had all sorts of tax exemptions for capital gains but I always assumed that dividends would be taxed in a similar fashion to Canada (ie included in income in a fashion where it is taxed less than other income to reflect the tax already paid on the money in the corporate structure)

[chequita guevara]

It was part of the tax cuts in '93. Dividends are no longer "double taxed."

Oh, I guess you're right about carrying losses forward on business taxes. I forget about those. Still, it would be nice to be able to do that on personal income taxes.