Re: [MLUG - DISCUSSION] too much is too much for our richest CEOs

["Jonathan King" <EMAIL:PROTECTED>]

On 1/5/07, Vern Green <EMAIL:PROTECTED> wrote:
> Yeah, that is the difference between having pretty standard skillsets that a
> great many other people have, and having a skillset that very few have.

This would be a much more persuasive argument if the skillset in
question was in fact very rare. These days, the real credentials we're
talking about are an MBA and maybe 20 years experience in the
executive corps. There are literally dozens of qualified people for
each CEO vacancy created, although only the best connected will be
considered for any given job. In the olden days, experience with the
specific business in question was also a requirement, but that's
totally optional these days.

> Face it, there are more rockstars in the world than their are CEOs of companies
> with more than 38 billion in assets.

But the rockstars are FAR more subject to market forces than the CEOs
and generate a lot more revenue for their recording companies (at the
margin) than the average CEO.

> Home Depot ranks 72 on the Forbes top list. When 87 billion in market value
> is at stake, 210 million becomes chump change.

Sorry, but you just DON'T know what you're talking about here. The $87
billion in market value is supposed to represent the net present value
of all future dividends and other money that can be given to the
stockholders. I don't have time to do the math at the moment, but I
think that for a firm that is not growing very quickly, the cash
stream is supposed to be on the order of 3-7% of stock value per year.
As it happen, HD is only yielding 2% in dividends right now with a
flat stock price, so that's about $1.75 billion in dividend payments,
and $210 million thus represents almost ONE EIGHTH of the cash given
to shareholders this year. If somebody cut the rate on your CD from
4.8% to 4.2% and told you that was because they had to fire the CEO, I
would hope you would scream bloody murder.

Sheesh. What is the world coming to when conservatives don't know how
this stuff is supposed to work?

jking

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