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Re: CEO pay: What those involved in the financial meltdown made
From: David Farber <dave () farber net>
Date: Fri, 26 Sep 2008 18:18:42 -0400



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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