Mr. James "$500K Is Not a Lot of Money" Reda Has A Website and A Contacts Page

[Yavin4]

Mr. Reda was quoted in the NY Times article regarding Pres. Obama's plan to limit compensation to firms receiving the TARP money.

Here's his quote:

<<That is pretty draconian — $500,000 is not a lot of money, particularly if there is no bonus,” said James F. Reda, founder and managing director of James F. Reda & Associates, a compensation consulting firm. “And you know these companies that are in trouble are not going to pay much of an annual dividend.”

Mr. Reda said only a handful of big companies pay chief executives and other senior executives $500,000 or less in total compensation. He said such limits will make it hard for the companies to recruit and keep executives, most of whom could earn more money at other firms.

“It would be really tough to get people to staff” companies that are forced to impose these limits, he said. “I don’t think this will work.”>>

http://www.nytimes.com/2009/02/04/business/04pay.html?ref=politics


You may want to send your rebuttal to Mr. Reda. Here's his contact page from his website:
http://www.jfreda.com/page/contact.php

[aquart]

1. Hard to recruit executives in a recession? LOL!

[TahitiNut]

2. I'd sure love to have one of those "not a lot of money" jobs.

Mr Reda can go fuck himself in Cheney's living room, too. :puke:

[salguine]

3. I think I know a way to set this straight. What say we start

stuffing $1 bills up Mr. Reda's ass. If he can take 500,000 of them before crying uncle, then we will concede that $500,000 is not a lot of money.

[underseasurveyor]

4. Love it!

That's perfect. I could get on board with that.

[exboyfil]

5. Does anyone think that now was not the time to kick off

all the commercials for the Ladders.com $100K+ plus executive search firm ads. I do find the ad with them tranqing the large executive chair to be cute.

Talk about your bad timing.

The CEO of my company made $15M last year as well as $500,000 for personal use of the company jet (which is particularly galling). We have started shop layoffs, and all contractors at one sight were just walked out the door. We just received a letter from the CEO telling us this year's raises are delayed, and we will not have raises next year. I am waiting for the letter regarding our bonuses (which represent 20% of our compensation for the last few years).

I wonder if our CEO will be turning in personal use for the jet next year?

The place to get started is with the executive compensation committees. We need to get some of these large institutional holders (Fidelity and Vanguard for example) to get serious about compensation packages (actually to serve on compensation committees). The trouble with these packages is that everyone is based on the market averages for CEOs, and everyone wants the best CEO. What happens when everyone is moved towards the 75 percentile - multimillion dollar pay packages.

CEO pay is an issue, but how these packages were structured down the executive line (performance bonuses for risk taking that resulted in short term profits at the risk of killing the company) is a far bigger problem. While it seems excessive if my CEO is making the correct decisions to keep the company going (and we are talking about $15B plus in revenues and $2B in profit per year) then I don't see $5M as being excessive. This represents 0.25% of profits or 0.03% of revenues.

Lets look at it another way. If you look at organizational structures you can approximate a doubling of salaries at every management level (going from a paid professional at the bottom to top in 6 steps). It about works out. You do see a real jump in our organization between VP and CEO (about 2 to 4 times). I would have to say that this number represents a premium associated with the bidding war for CEO talent.

If the $500,000 cap was placed on our company, I would expect that it would extend all the way down to the Director level (4 levels above me), but I have no way of knowing for sure.


The only wonder is how many of the executives that led during this disaster have stayed in position. Is there not any consequences for poor performance at the top (effectively killing your company is probably the worst thing you can do)?