GM wants no salary caps

[GoCougs]

You make good points this time Couganator but you're still on probation....

How I make it there in the first place? The C-series thing?

[Colonel Cadillac]

I didn't give him any credit. My point was that the pay of even one of the highest paid executives in the auto world is a negligible expense.
GM is  privately held company, stock options aren't going to be much of a motivator. Furthermore, for a public company stock options also reflect the whims of the stock market in addition to the whims of the auto market. I just think that an incentive system involving cold hard cash can be more effective at both short and long term growth if structured properly.

If the CEO owns a lot of stock in a company, he'll want to create additional value in the company so the stock goes up. That sounds like motivation to me.

[NomisR]

If the CEO owns a lot of stock in a company, he'll want to create additional value in the company so the stock goes up. That sounds like motivation to me.

But what's the motivation in a private company?

[FoMoJo]

Your position is not internally consistent.

Are we a small part of the free market system? Yes, inasmuch as we buy and sell goods and services.

"Determining" compensatory packages is the very "elitist" behavior that you supposedly object to. It is entirely elitist to assume that one man, one government, one party, or one public could possibly know how to fix executive salaries. No single person on the face of this earth knows what automotive CEOs should be payed.

In the context of this discussion, presuming that we have vested interest in the company in a small way, our proxy on the board is using our small interest, and others, in determining what the CEO should be paid.  In that way our small interest has some influence in determining the market value of that position.

As for determining the specific value of that position, it is a bartering prospect.  As represented by the board, we think that position is worth a specific value, and an offer is made.  If the potential employee feels his/her worth is more, it is in his/her interest to state that.  Our representation may say "take it or leave it" or up the anti thus determining his/her market value;  very much the same as the market value of labour is determined in a collective.

[Colonel Cadillac]

But what's the motivation in a private company?

That's the bonus according to performance situation.

[NomisR]

That's the bonus according to performance situation.

Yeah, but if bonuses are capped by the government while the government only wants to give out stock options on the private company.. then what would be the incentive? 

[Colonel Cadillac]

Yeah, but if bonuses are capped by the government while the government only wants to give out stock options on the private company.. then what would be the incentive?  

Then there is an issue.

[FoMoJo]

Interesting, GM Plans to Pay Back $6.7B Loan early.

General Motors plans to begin paying back a $6.7 billion loan it owes the U.S. government starting late this year and could repay the entire loan by the middle of 2011, according to published reports.

[sportyaccordy]

Interesting, GM Plans to Pay Back $6.7B Loan early.

General Motors plans to begin paying back a $6.7 billion loan it owes the U.S. government starting late this year and could repay the entire loan by the middle of 2011, according to published reports.

LMAO WHAT???

The Journal says GM's move to repay the loan could be controversial and risky as it draws on $13.4 billion it has in an escrow account that came from its U.S. bailout. Under its government agreement, GM can use taxpayer money to repay the loan.

[GoCougs]

But also remember the US gov't bought ~60% of GM's stock, meaning this loan is only a very small portion of total taxpayer dollars wasted on nationalizing GM.

GM won't ever be able to repatriate itself - it unfortunately stands to be one of the first of many failed, large companies nationalized by the federal government.

[Tave]

I thought the feds gave a majority stake to the UAW, or was that Chrysler?

[FoMoJo]

The Union owns about 55% of Chrysler and 13%(?) of GM.  Along with that, there is a no strike clause until (I believe) 2015.

[NomisR]

The Union owns about 55% of Chrysler and 13%(?) of GM.  Along with that, there is a no strike clause until (I believe) 2015.

I don't think the Unions would want to strike at this time anyways, because a strike for either companies could mean eternal ruins.

[ChrisV]

My 2 cents, if it means anything.

The old adage is "you get what you pay for."

Anyone have any experience with hiring bottom dollar contractors? How's the final quality and satisfaction with finished product usually work out in those cases?

From a sports perspective, my home baseball team, the Orioles are another good example. If you can't afford to (or simply decide not to) pay for top talent, how does your season stack up? Buying top talent doesn't mean you will ALWAYS win, but it certainly makes the odds greater, right, Yankees fans?

paying for good top executives is the same as paying better than minimum wage for any employee. You pay like crap, you GET crap for output. Yes, there will be occasional exceptions, but those exceptions prove the rule.

[Byteme]

My 2 cents, if it means anything.

The old adage is "you get what you pay for."
All too often one get's less than one paid for.  

GM paid a ton of money to it's highest levels of management from the mid 70's to the mid 2000's and got a usually poorly managed corporation that did it's darndest to decrease shareholder value." Clearly big salaries are not the single answer.


Anyone have any experience with hiring bottom dollar contractors? How's the final quality and satisfaction with finished product usually work out in those cases?  NASA sent people to the moon riding a collection of parts largely designed and specified by civil servents and manufactured by the lowest bidders.



paying for good top executives is the same as paying better than minimum wage for any employee. You pay like crap, you GET crap for output. Yes, there will be occasional exceptions, but those exceptions prove the rule.
In all honesty I don't think you can compare the quality difference in help if you pay the minimum wage vs. say double minimum wage to paying $500,000 vs. paying $1,000,000.  Again, if that were the case I would have thought GM would have done quite well from 1975 to 2005.  

[GoCougs]

Sigh - you get what you pay for is more than an adage. No matter how you rack it and stack it, some people are worth $10MM/year and some people are only worth $5/hr.

[sportyaccordy]

Sigh - you get what you pay for is more than an adage. No matter how you rack it and stack it, some people are worth $10MM/year and some people are only worth $5/hr.

Govt wants $10MM/year results from $5/hr workers

[Byteme]

Sigh - you get what you pay for is more than an adage. No matter how you rack it and stack it, some people are worth $10MM/year and some people are only worth $5/hr.

Which doesn't preclude someone worth $500,000 a year from making More than that, or less than that.  It happens all the time.   Only in a perfect theoritical world will everyone make exactly what theya e worth.  In the real world some people are underpaid and some are overpaid. 

[ChrisV]

Which doesn't preclude someone worth $500,000 a year from making More than that, or less than that.  It happens all the time.   Only in a perfect theoritical world will everyone make exactly what theya e worth.  In the real world some people are underpaid and some are overpaid. 

True, but if you go in guaranteeing that no one will be paid what they are worth, you'll never get anyone worth paying.

All too often one get's less than one paid for. 

GM paid a ton of money to it's highest levels of management from the mid 70's to the mid 2000's and got a usually poorly managed corporation that did it's darndest to decrease shareholder value." Clearly big salaries are not the single answer.

No, but small salaries are not ANY answer.

NASA sent people to the moon riding a collection of parts largely designed and specified by civil servents and manufactured by the lowest bidders.

And blew stuff up with lowest bidder parts.

the fact is, if you get lowest bidder stuff, you usually get crap. When i was talking contractors, i was talking homeowners getting work done. Way too often people get low bids, and end up with crap or unfinished work that they have to pay someone else a higher figure to come in and make right.

If you have something major wrong, and you tell prospective bidders that you will only pay minimum amounts, even though the job requires more, you're only going to get people barely qualified to breathe, much less do the work. How about taking your Jag to Joe's Corner garage and getting it worked on by a $7/hr grease monkey?

In all honesty I don't think you can compare the quality difference in help if you pay the minimum wage vs. say double minimum wage to paying $500,000 vs. paying $1,000,000.  Again, if that were the case I would have thought GM would have done quite well from 1975 to 2005.

Again, in order to fix it you cannot go into it with a bargain basement mentality.

Just like if you took your car to a dealer who screwed it up, generally it's not going to get fixed properly by a $7/hr grease monkey at the service station, either, no matter how much you use the logic "well, I paid good money at the dealership, so obviously paying good money won't solve the problem." You most likely will in fact have to go to an even more expensive specialist who can not only fix the problem, but undo the things the others did.

[FoMoJo]

Sigh - you get what you pay for is more than an adage. No matter how you rack it and stack it, some people are worth $10MM/year and some people are only worth $5/hr.

Perhaps you get what you pay for but often, it's a load of shit.

Free market may place a $ value on goods and services but many people are driven by different values.

[Raza]

I'll work for GM for cheap.  125 plus benefits and I'm all theirs. 

[GoCougs]

Perhaps you get what you pay for but often, it's a load of shit.

By whose measure?

Free market may place a $ value on goods and services but many people are driven by different values.

Unfortunately, that is very true, and much to their detriment (and my benefit).

[FoMoJo]

By whose measure?

Results is the best measure.

Unfortunately, that is very true, and much to their detriment (and my benefit).

Those who value money above all else are very insecure, IMO.