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Executive salaries: school executives that is
Posted by: McQ on Sunday, May 14, 2006

We hear a lot about executive salaries and how they're out of proportion with the worker's salaries and characterized as "shameless displays of greed" by some. A good example of that so-called greed is found in the recent 400 million package that Exxon paid a recently retired CEO. Of course that CEO had overseen earnings of about 39 billion for the company, but that's rarely mentioned.

But according the Atlanta Journal Constitution, oil executives aren't the only one's being given nice compensation packages. The AJC did a story about the pay, perks and bonuses that county and city school superintendents get, and given the fact that Georgia has the lowest SAT scores and the lowest overall high school graduation rate of any state in the union (54%) I'd say that perhaps they're way overpaid.

The AJC looked at a number of counties and cities which compose the Atlanta MSA. Total compensation packages ranged from $72,800 a year to $349,600. The latter is the total package for Beverly Hall, school superintendent for Atlanta City Schools. And while the CEO of Exxon was compensated for bringing in increased revenues, it appears, given GA's SAT and graduation rates, Ms. Hall earned her $68,300 "performance bonus" for just showing up for work.

In the ranking of state high schools, the first Atlanta City school ranks at 134th out of 340. The second comes in at 146th and the third at 215th. The rest, obviously, are below that. What these rankings indicate are the percentages of 11th Grade students passing all four parts of the Georgia High School Graduation Tests (GHSGT) in ELA Arts, Mathematics, Science, and Social Studies. The top percentage for Atlanta City schools is 73%. The bottom three are at numbers 324 (36%), 329 (33%) and 337 (23%).

With an average salary for Georgia teachers at $46,400, Ms. Hall is paid almost 8 times that amount. And, with the 50,000 students in the Atlanta City system, she gets about $7 per student.

Probably just as egregious is the pay Phyllis Edwards gets as school superintendent for Decatur City Schools. At $165,300, Ms. Edwards is compensated about $66.12 per student for the 2,400 in her school system. It's one and only high school is 145th with 71% passing the GHSGT. She is worth 3 1/2 times the average teacher's pay. And $14,600 of that was a "performance bonus".

So on the one hand we have a CEO who earned $400 million for delivering 39 billion to his company in revenues. On the other two school superintendents who are a part of a state with the lowest SAT scores and lowest graduation rate in the nation. Each has high schools with below 75% passing the Georgia High School Graduation Tests (one with three schools below 40%). Both have received performance bonuses.

Of the three individuals highlighted here, who actually earned their compensation?

 
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How DARE you MacQ...
 
Written By: bains
URL: http://
Sacrosanct is the position of superintendent - they are the ones who educate.
 
Written By: bains
URL: http://
comparing them to the evil capitalist money whore CEO of XOM is deserving of a DOS attack...
 
Written By: bains
URL: http://
...sorry

just read Greyhawks Who killed the Kennedys post about denial of responsibility.
 
Written By: bains
URL: http://
The superintendents DESERVE their money, they have to battle ceaselessly for money for their school systems against evillll, white suburbanites who would prefer to home school their offspring or send them to private schools, so as to avoid having to deal with folks of a different skin colour or socio-economic background. In the end they usually scrimp by with just a minimum amount of funding, usually only $6,000 per pupil, barely enough to keep the doors to the school open, rather than the $20,000 per pupil everyone knows is necessary for even the most basic education. These folks deserve their cash for their heroic nd unceasing efforts in the face of adversity and I am SHOCKED that anyone here could question their compensation!
 
Written By: Joe
URL: http://
The superintendents DESERVE their money, they have to battle ceaselessly for money for their school systems against evillll, white suburbanites who would prefer to home school their offspring or send them to private schools, so as to avoid having to deal with folks of a different skin colour or socio-economic background.
They don’t have to battle for money against the white suburbanites, because the white suburbanites have to pay (through local property taxes) for government-run schools whether they send their kids to one or not. Even if they don’t have any kids at all they have to pay. Socialism ensures that no taxpayer is left behind. {:^)
 
Written By: Manny Davis
URL: http://
Ah Manny it was sarcasm....but yes they DO have to battle white suburbanites, to an extent. YOU CAN MOVE... that’s what happens to many school districts, the affluent move out. So yes really super’s do have to worry about killng the cash cow, just a little. But I see you are being alittle sarcastic yourself....
And it’s not really socialism. It’s public policy, long before Marx wrote his screeds there were public schools in the America. Education has been seen as a leg up, out of the poverty of your parents and into the middle classes. AND most folks agree that an educated public is a BETTER public, so you benefit, indirectly from public education, just as you benefit from the Department of Defense, even if there isn’t an enemy within 3,000 kilometres of you. The question isn’t one of the Benefit, but of the COST-Benefit analysis. What I get from the public schoool system seems minimal, compared to the price a I pay to get it.
 
Written By: Joe
URL: http://
Where I live, we have a civil suit to stop the school board’s deal with the business manager.

It seems that the business manager has a year left on his contract, after 27 years with the district. The school board allowed him to take a year’s leave of absence with benefits, then collect $443,000.00 for his unused vacation and sick days, including the vacation (and sick days ?) accured during the leave.

State law prohibits severance deals like this, but the school boards says it’s not a severance package. The summation .. just because the school district is not calling Bolton’s deal a "severance package" doesn’t mean it is not one.

"If I have a dog and choose not to pay my municipal canine tax ... I could certainly claim my dog is a cat ... say it has long hair and only weighs 9 pounds," Helwig said. "But that doesn’t mean it’s a cat."
 
Written By: Neo
URL: http://
"Of the three individuals highlighted here, who actually earned their compensation?"

None of them.

Unless Exxon’s performance is in any way superlative to the rest of his industry. If the entire industry is making record profits, and it is, no one has demonstrated that a dancing, retarded polar bear couldn’t have made Exxon $39 billion.

I’d support lush pay packages, for, say, the best-performing CEO in the industry, if the bottom 50% were contractually forced to acccept merely obsecene salaries in, say, the single-digit millions. That would add the element of "merit" that liberatarians are so fond of in most other settings.
 
Written By: glasnost
URL: http://
Horror of horrors that people are allowed to voluntarily compensate other people however they want, eh glasnost? No chance that merit can’t be in the eye of the one holding the purse strings I suppose?

The beauty of it is, you’re allowed to run your own business and pay your own management any d*mn way you want, so go ahead and lead the way. Start the executive compensation revolution.



 
Written By: Unknown
URL: http://
Horror of horrors that people are allowed to voluntarily compensate other people however they want, eh glasnost?

Oh sure, they’re allowed to - except to the extent that they, in doing so, unacceptably degrade the macroeconomic and social fabric of the nation in doing so - a judgement made indirectly by the ’will of the people’. Because this is a democracy.

That right to limit such individualized judgements calls stems from the same thread as laws against murder - of for an example you’ll like better, fraudulent advertising. I mean, what’s wrong with lying to an audience if you can successfully increase your bottom line - and you can! Oh, in the very long run it’s stupid business, but why is the nanny state not letting the market sort that out?

Because of the unacceptable macroeconomic and social cost.

Ditto for here.

"No chance that merit can’t be in the eye of the one holding the purse strings I suppose?"

This is a very poor way of judging merit. Smart businessmen don’t base their judgements of merit on how well they get chummed by their underlings, but by their comparative performance.

 
Written By: glasnost
URL: http://
"they, in doing so, unacceptably degrade the macroeconomic and social fabric of the nation"

"Because of the unacceptable macroeconomic and social cost."

So explain how compensating the manager of the company you own as you wish degrades the macroeconomic and social fabric of the nation. Please be concrete and precise. Show me the direct harm, show me who is negatively affected, and show me of those who are affected which do not have a choice to remove themselves from the harm. Show me, in other words, who is forced to suffer.

Next, demonstrate to me how anyone but the owner is supposed to make a judgement about how management should be compensated. Shall we have a national vote on the proper level of compensation? Shall there be a law? Wait a minute, publically traded companies already have a board of directors who are elected by shareholders and are entrusted to set compensation. Not democratic enough for you? Or are you simply in favor of democracy and freedom of choice when it aligns with your viewpoints?

"No chance that merit can’t be in the eye of the one holding the purse strings I suppose?"
This is a very poor way of judging merit. Smart businessmen don’t base their judgements of merit on how well they get chummed by their underlings, but by their comparative performance.
What are you talking about? What is the "poor way"? Who said anything about being "chummed," whatever that means?

I’m arguing that the owner(s) of a business has the sole right to determine how much employees are paid (ignoring minimum wage laws and other laws forcing employers to provide this and that benefit). You are apparently arguing against this on the grounds that the social fabric will be torn if owners pay too much (and probably too little). So you must have a plan figured out to make sure everyone is paid just right and all this social destruction is avoided.









 
Written By: Unknown
URL: http://
So explain how compensating the manager of the company you own as you wish degrades the macroeconomic and social fabric of the nation. Please be concrete and precise. Show me the direct harm, show me who is negatively affected, and show me of those who are affected which do not have a choice to remove themselves from the harm. Show me, in other words, who is forced to suffer.


It’s not about being forced - coercion is a spectrum, no one is ever forced to do anything, but varying degrees of pressure can be applied.


Here’s a very simple example. It’s an extreme case, because they’re easier to demonstrate on a blackboard. The government of Indonesia in the 1990’s had a wonderfully unregulated approach to the question of compensation. President Suharto simply appointed people who sucked up ("chumming") to him to be the heads of major corporations. Perhaps they had boards of directors appointed by majority stakeholders that happened to also be pals of Suharto. (Indonesia may not have been advanced enough for this, but this is the model in Malaysia). In any event, these company owners chose compensation packages, as per their right, amounting to about 98% of revenue beyond costs. Some probably went further than that, and say, set themselves 50% of total revenue, costs be damned.

This had any number of unpleasant macroeconomic effects. Wealth concentrated to that effect isn’t effectively plowed back into the economy, stifling domestic demand. Business investment was also stifled, because the money for the company to invest was going into the CEO’s bank accounts. When the Asian crisis hit, the concentration of all that wealth made it nice and easy to flee overseas - and kaboom, large chunks of Indonesia’s revenue ceased to exist for Indonesia. In short, Indonesia’s compensation packages stunted Indonesia’s economy.

Things aren’t that obvious here - but you didn’t ask me to demonstrate it in the U.S. economy - you asked me to provide one specific example.

Another example is, of course, the minimum wage law itself -

"m arguing that the owner(s) of a business has the sole right to determine how much employees are paid (ignoring minimum wage laws and other laws forcing employers to provide this and that benefit)."

You’re contradicting yourself. If you accept the legitimacy of the minimum wage, then you accept the legitimacy of the government - representative of the will of the people - setting limits on an employer’s right to pay his employees whatever the market will bear. You can argue that the minimum wage exists because of bleeding-heart liberalism. Or you can argue that its existence has been a net macroeconomic positive, broadening the consumer base, decreasing the volatility of capital, creating a bigger market. I believe both.

The point is that left to themselves, corporate America is of course capable of setting self-destructive compensation packages. Because this is America, not Indonesia, it would take a lot longer for the system to warp to that extent, and because this is a democracy, it won’t get that far.

So, we can argue about whether the current system constitutes warp and negative socioeconomic effect, but I think I’ve demonstrated pretty da*n conclusively that a) there are both theroetical and real-life limits to which you can compensate the CEO of a business without hurting the business and b) the economy, if pushing that limit is emulated. And why shouldn’t it be?
Trust the better nature of CEO’s, (or anyone) to not enrich themselves at the expense of their companies? I doubt it.



 
Written By: glasnost
URL: http://
Your best example is where the president of a country who has coercive power in spades appoints the heads of companies? Since my line of arguing is based on legitimate private property owners being free to chose how to use their property (money in this case) your example is poor.

Nevertheless, why are you against someone’s right to be stupid? If a company owner wants to extract all the cash out of a business and run it into the ground it’s his right, as dumb as it is. In the future he’ll never run a business again and no one will work for him. Problem solved.

I think your underlying problem is that you want a perfect world, where no one ever causes harm and no one ever has to make a mistake and learn from it. You seem to want a world where governments protect everyone from either making a mistake or compensate them when one is made.

I’m not contradicting myself. I don’t accept the legitimacy of the minimum wage. I disagree with it.

"but I think I’ve demonstrated pretty da*n conclusively that a) there are both theroetical and real-life limits to which you can compensate the CEO of a business without hurting the business and b) the economy, if pushing that limit is emulated."

Bravo. I’m not arguing otherwise. You missed the point and I’m too tired to keep going.



 
Written By: Unknown
URL: http://
Your best example is where the president of a country who has coercive power in spades appoints the heads of companies? Since my line of arguing is based on legitimate private property owners being free to chose how to use their property (money in this case) your example is poor.

There’s no reason why legitimate capital owners couldn’t make a series of equally poor decisions. There are greater systemic forces against that happening in america, but they’re by no means perfect.

You missed the point

Actually, I think this has been a useful little jam session. We’re now down to a concrete political difference: you think, appaently, that macroeconomic harm caused by the collectively measured individual bad decisions of capital owners is something the government has no right to fix, and I think they do have the right to fix it. Fine. Libertarians would be sympathetic to your position, but actual countries are run along the lines I’m suggesting. Then the only question left is what cases merit intervention and which ones don’t.



 
Written By: glasnost
URL: http://
"I think they do have the right to fix it...Then the only question left is what cases merit intervention and which ones don’t."

There’s the billion dollar question. People have been attempting to run each other’s lives through force since people have been around and it’s yet to be proven an acceptable solution.

I don’t think you can even define with any reasonable level of precision what level of macroeconomic harm justifies forcful intervention. It boils down to opinion, usually arrogant opinion. People who want to control the actions of others are always certain they can define the parameters of control but they always end up casusing as much harm or more as that which they purport to correct.

That actual countries practice what you suggest is pointless. At one time in history actual countries were all ruled by kings and dictators. Is that an argument that we should return to this form of governance? Consensus is irrelevant to the truth.
 
Written By: Unknown
URL: http://
What is it with liberals anyway? Why so much focus on control and force? Why not focus on providing the opportunity for people to learn how to think and make decisions so that they can avoid unreasonable risk and unreasonable people? And, of course, provide this opportunity without coercion. Can’t you see the disconnect?

 
Written By: Unknown
URL: http://

 
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