CEO Pay is Rigged

Economic Policy Institute @ Webpage http://www.thelibertybeacon.com/corporate-ceo-pay-276-times-the-average-workers-last-year/

 

Here’s a follow-up to yesterday’s post.

 

A Bloomberg article “Excessive CEO Pay for Dumb Luck” by Barry Ritholtz dated March 07, 2017 had claimed “CEO pay is rigged”.

 

One can only open one’s mouth in sheer horror when one reads that “the compensation packages of the chief executive officers of America have been rising faster than just about any rational metric upon which they are supposedly based”.

 

An Economic Policy Institute analysis had this to say: “CEO pay grew an astounding 943% over the past 37 years”.

 

EPI further observed this was a far faster growth rate than “the cost of living, the productivity of the economy, and the stock market”.

 

The above EPI statements already disproved the claim that CEO pay is reflective of a company’s performance.

 

What the article tells us is that CEO compensation isn’t the pay for performance its advocates claim. Instead, it is unmoored from any rational basis.

 

It is simply an inappropriate wealth transfer from shareholders to management.

 

You can place much of the blame on compensation consultants and the corporate boards that hire them. Boards are supposed to act on behalf of shareholders when they are considering the pay packages created by the former. But the relationships are riddled with conflicts that produced the charade we have today.

 

Compensation consultants created easily reached targets as a basis for so-called performance-based pay. But even that low bar has been bastardized.

 

It isn't merely the gluttony; rather, it’s the performance, or often the lack of it.

 

In the US of A, a great deal of information is being made available regarding this issue of managerial over-compensation. Thanks to one little-known aspect of the Dodd-Frank Act, this has made it easier to compare executive compensation against corporate stock returns.

 

I read that the results confirmed what some of us have long suspected:

 

The most overpaid CEOs actually destroy shareholder value.

 

To quote a Harvard Law School study: “The 10 companies we identified as the most overpaid firms as a group underperformed the S&P 500 index by a gaping 10.5% and actually demolished shareholder value as a group with -5.7% financial returns” (Webpage

https://www.bloomberg.com/view/articles/2017-03-06/excessive-ceo-pay-for-dumb-luck, accessed August 29, 2017)

 

It seems that the reality is that shareholders are paying executives big bucks for simply keeping a chair warm during a bull market. That isn’t performance-based pay; it’s dumb-luck-based pay.

 

Kindly read this book, “Pay Without Performance: The Unfulfilled Promise of Executive Compensation” (Harvard University Press, 2004), authored by Lucian Bebchuk and Jesse Fried.

 

The book's thesis is that executive compensation practices benefit corporate executives at the expense of shareholders through implicit and explicit corruption of the pay-setting process.

 

It argues that CEO employment contracts are bad for shareholders (not "optimal") because they are the product of managerial power.

 

Bebchuk and Fried argue that current executive pay practices are a sign of widespread corporate governance failures, a view that they believe to be supported by scholarly research on executive compensation.

 

I happen to support this belief.

Greedy Capitalists

British Prime Minister Theresa May labeled businesses who pay excessive salaries to senior executives as the "unacceptable face of capitalism".

 

She wrote in the Mail on Sunday that the "excesses" of some bosses was undermining confidence and "damaging the social fabric of our country".

 

But what the Tories are proposing is rather interesting. They are wanting to set up a public register – supposedly “the world’s first of its kind” – where companies that face shareholder revolts over salaries and bonuses are to be identified and named. Something akin to a shame list, I guess.

 

[Note: The Department for Business, Energy and Industrial Strategy said that a "revolt" would be defined as 20% of shareholder opposition].

 

Investment Association chief executive Chris Cummings said the register would hold the UK's "biggest businesses to account". Firms on the list would need to detail how they intend to address investors' concerns.

 

Stefan Stern, director of independent think tank, the High Pay Centre, told the BBC: "The symbolism of being named on a list is something that will get the attention of company boards. They won't want to be on this list, for as well as the adverse attention it brings, it could also make them potentially vulnerable to hostile investors".

 

Let me give you a couple of examples of executive compensation in the UK.

 

The Royal Dutch Shell chief executive Ben van Beurden saw his total pay package soar by 54% to £7 million last year. The Reckitt Benckiser boss Rakesh Kapoor took a pay cut of one third in 2016 – but still pocketed £14.6 million. And Sir Martin Sorrell took the cake. The advertising giant WPP paid him £42 million last year and £210 million over the past five years.

 

The assertion in CEO pay is that you get paid for performance. But if you believe R Paul Herman, CEO and founder of HIP Investor, he had claimed that “the highest correlation of performance to pay was only 2 percent” (Webpage

http://www.triplepundit.com/2016/03/excessive-ceo-pay-big-problem/, accessed August 29, 2017).

 

Curbing excessive pay is an extremely important task. I reckon Herman is right when he said: “When CEO pay is excessive, it is destabilizing to the company”.

Malays Don't Need UMNO

Negeri Sembilan Menteri Besar Mohamad Hassan (right), who is also an UMNO supreme council member, had candidly told the party faithful that Malays don’t need UMNO anymore.

 

Damn right because the Malays have become a lot smarter.

 

UMNO have always been repeating the falsehood that if UMNO are defeated in a general election, Malays will lose political power and become strangers in their own land.

 

Mohamad was quoted by Malay daily, Sinar Harian that UMNO could not afford to cling stubbornly to the belief that Malays will support the party. He said UMNO must desist from repeating "that the Malays need us”.

 

In his speech at the Sembrong UMNO delegates meeting on Saturday, he debunked the myth that UMNO was Malay and Malay was UMNO – saying instead that it was UMNO that needed the Malays for their continuity and not the other way around.

 

The political reality is that the Malays have at least 3 other choices. PAS, PKR and Parti Pribumi Bersatu Malaysia are all vying for the Malay vote.

 

UMNO are not the only one that Malays could count on to uphold and fight for their rights.

 

The Malays should know that the Chinese have given up on MCA a long time ago. The same with Indians and MIC. It is now Malays who must sever their umbilical cord to UMNO.

 

It’s time to break free from UMNO and be independent.

 

In the Scottish Premiership match on Saturday between Celtic and St Johnstone, the latter looked to have ended the Scottish champs’ incredible 15-month unbeaten run – when Steven MacLean made his kick count in the thirty-ninth minute.

 

But the Celts refused to stay down. Callum McGregor's seventy-ninth minute strike rescued a point for Celtic and kept his team’s unbeaten run going another week.

 

A close shave.
 

In the EPL game between Liverpool and Arsenal on Sunday, the former easily won 4-0.

Liverpool didn't just beat Arsenal. They thumped them. Trounced them. Torn them apart.

The four goals came from Roberto Firmino (17), Sadio Mane (39), Mohamed Salah (56) and Daniel Sturridge (77).

Liverpool were absolutely brilliant, no question. The pace, the power, the movement.

Daniel Sturridge's 100th goal

Flag Bloopers

Malaysia is a painful embarrassment!

 

At the 29th SEA Games (August 19-30, 2017) in Kuala Lumpur, there were errors galore. If you don’t know already, I am referring to the flag bloopers.

 

It started with the commemorative booklet – which had the Indonesia flag the wrong way around. This made it appear as the Poland flag.

 

 

This received an avalanche of flak before Wisma Putra issued a formal apology to Indonesia for the "unfortunate situation".

And if you check out state broadcast station, RTM’s screenshot above, the Singapore flag is shown as Vietnam, the Thailand flag as Singapore, the Indonesia flag as Thailand, the Vietnam flag as Indonesia, the Myanmar flag as Philippines, the Philippines flag as Myanmar, the Cambodian flag as Laos, and the Laos flag as Cambodia.

 

Only Malaysia, Brunei Darussalam and Timor Leste had their flags correctly assigned to the rightful countries.

 

It means we got 8 out of 11 flags wrong in the medal tally broadcast on Day 5.

 

[The Star Online quoted RTM director-general of broadcasting, Abu Bakar Ab Rahim as admitting the mistakes during its news segments on Thursday and Friday].

 

 

 

 

 

 

 

 

 

 

 

Photo via fandylo on Twitter

 

And not forgetting, a Malay daily had mistaken Poland’s flag for Indonesia’s.

 

Then a Malaysian swimmer, Keith Lim Kit Sern was shown in a television broadcast tagged with a Singapore flag.

Not only that – but he was labeled KUL (presumably for Kuala Lumpur) instead of MAS for Malaysia.

 

TV3, another TV station had a SEA Games schedule for football with what appeared to be a wrong flag attributed to Indonesia. The semi-finals match listed as Thailand-Indonesia showed the latter with a Myanmar flag.

 

Then again, the match should actually be between Thailand and Myanmar – so the flag was right but the listed country was wrong.

 

[And if you already didn’t notice, the second semi-finals match between Malaysia and Indonesia had misspelt our neighbor as “Idonesia”].

 

Malu lah, to see one event riddled with so many blunders. Malaysia Memang Tak Boleh!

Donald Trump is Determined to Build His Wall

Donald Trump is determined to build his Mexican wall.

On Tuesday, he said he was willing to do what it takes to get his pet project off the ground.

Afterwards, his many critics questioned whether he was 'fit' to be President. LOL!

 

The President's effort to build a barrier along America's southern border had stalled in Congress, where many lawmakers had asked whether this campaign promise is really necessary.

Still the House had passed a spending bill with funding for the costly project, but it faces an uncertain future in the Senate.

The Wall was one of Trump's most popular campaign promises, prompting regular rally chants of "Build that wall!"

He had even vowed that Mexico would pick the tab, but the country has so far refused. Rightly so.

He had asked for $1.6 billion to begin construction – but his fellow Republicans in Congress were perturbed because the funding would add to the federal deficit. Already, the Republicans are trying to figure out how to pay for tax cuts.

Trump is belligerent and he even threatened to shut down the government – just so he can find the money to build his Wall.

I see a big budget battle looming. No matter how much I wish to mock him – at least, he is keeping to his election pledges.

Today, I was in Shah Alam to be one of three facilitators for a one-day Evaluation workshop organized by the Zuellig Pharma Toastmasters Club for their members. The other two were Cyril Jonas and Yeoh Cheng Lim.

Out of thirteen participants, 8 were Toastmasters and 5 non-Toastmasters. Including an unexpected guest from Segamat, Johor, 11-year old Nur Adeleeya Iman:

This dynamite delivered two Table Topics speeches, evaluated  my impromptu speech (titled "The Ms Victoria I Would Like to Meet") and even drew this:

PAS Ready to Do Battle with PKR

Selangor PAS gave notice Thursday that the Islamist party will contest state seats now held by PKR president Dr Wan Azizah Wan Ismail (Kajang) and her deputy Azmin Ali (Bukit Antarabangsa) in the 14th general election.

 

This time his party are expecting to field candidates in at least 42 state seats. 

“Be prepared for it”, state PAS commissioner Sallehin Mukhyi had warned.

To add currency to this political development, Malaysia's ruling party UMNO and PAS are working out a pact to take over Selangor in GE14, according to the Straits Times today.

Sources from both the opposition and UMNO-led federal government reportedly told the Singapore daily that Najib Razak and Abdul Hadi Awang continue to speak regularly on the phone.

Closer ties between the UMNO president and his PAS counterpart have so far been to champion the interests of the Malay-Muslim majority for  their mutual benefit.

If true, this will shake up voting patterns nationally. 
 

And I can't even begin to fathom why PKR still insist on groveling before PAS!

 

Get real – they had already decided to part ways. Why won't PKR understand? Why the self-denial?

 

No shame lah, PKR! Isn’t it obvious that we cannot work with Hadi and his version of PAS?

 

Liverpool produced a stunning attacking display on Wednesday against play-off opponents Hoffenheim to ensure five English sides will compete in the Champions League group stage for the first time.

 

Emre Can's deflected shot put them ahead in the tenth minute before Mohamed Salah reacted quickest to slot in a rebound off the post eight minutes later. Can doubled his goal tally within 143 seconds when he stroked in Roberto Firmino's cross at the back post – before Hoffenheim substitute Mark Uth, introduced after 24 minutes in a tactical reshuffle, pulled one back.

 

Former Hoffenheim forward Firmino put the tie beyond doubt after the break, sliding the ball into the bottom corner in the sixty-third minute after Jordan Henderson dispossessed opposing captain Kevin Vogt before unselfishly squaring.

 

The German side managed to pull another back when Sandro Wagner headed in Andrej Kramaric's left-wing cross in the seventy-ninth minute.

 

The final 4-2 score in Liverpool’s favor gave them an aggregate 6-3 victory – permitting the Reds to return to the Champions League group stages for the first time since the 2014-15 campaign.

 

I was in Shah Alam in Selangor for the Zuellig Pharma Toastmasters meeting on Wednesday. I was a Table Topics Evaluator as well as a Speech Evaluator.

 

This meeting gives optimism that the club can continue to stay relevant and still provide the platform to help members become better communicators and leaders.

Jerry Lewis (1926-2017)

Jerry Lewis, the comedian and filmmaker (right) who was adored by many (including me), and disdained by some – but, unquestionably a defining figure of American entertainment in the twentieth century, died on Sunday morning at his home in Las Vegas. He was 91.

 

Lewis knew success in movies, on television, in nightclubs, on the Broadway stage and in the university lecture hall. Certainly, his career had its ups and downs, but when it was at its zenith there were few stars any bigger.

 

And he got there remarkably quickly. Barely out of his teens, Lewis shot to fame shortly after World War II with a nightclub act in which the rakish, imperturbable Dean Martin crooned and the skinny, hyperactive Lewis capered around the stage, a dangerously volatile id to Martin’s supremely relaxed ego.

 

After his break with Martin in 1956, Lewis went on to a successful solo career, eventually writing, producing and directing many of his own films.

 

As a spokesperson for the Muscular Dystrophy Association, Lewis raised vast sums for charity; as a filmmaker of great personal force and technical skill, he made many contributions to the industry, including the invention in 1960 of a device – the video assist, which allowed directors to review their work immediately on the set – still in common use.

 

And Lewis was officially recognized as a “towering figure in cinema” at the 2013 Cannes Film Festival.

 

For those who don’t know him, this best describes Jerry Lewis: “A mercurial personality who could flip from naked neediness to towering rage, Mr. Lewis seemed to contain multitudes, and he explored all of them. His ultimate object of contemplation was his own contradictory self, and he turned his obsession with fragmentation, discontinuity and the limits of language into a spectacle that enchanted children, disturbed adults and fascinated postmodernist critics” (Dave Kehr, The New York Times).

 

Jerry Lewis, simplistically complicated. R.I.P.

Yesterday, I was at Menara ExxonMobil in Jalan Kia Peng, Kuala Lumpur to attend the Tiger Toastmasters meeting. I was a Speech Evaluator. 

And look what I received?

 

 

 

 

 

 

 

 

 

 

 

 

Wonder Woman Breaches $800 Million Mark

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wonder Woman has breached the $800 million mark on Sunday. $800,100,714 worldwide to be precise. 

 

Wow, wow, wow!!!

 

On Monday, I attended the joint NAWEM-TMIKL Toastmasters meeting at Rumah Puspanita in Jalan Hose, KL – where I took up the role of Grammarian and Speech Evaluator.

 

And I was voted Best Evaluator.

 

Celtic completed an 8-4 aggregate win to reach the Champions League group stage despite yesterday’s scare in Astana.

 

Leading 5-0 from the first leg, Brendan Rodgers' side fell behind on the night when Dimitri Shomko's shot was diverted into the net by Kristoffer Ajer (26). And though Scott Sinclair produced a stylish equalizer (33) – FC Astana replied through Serikzhan Muzhikov (48) and Patrick Twumasi (49, 69) to put the hosts 4-1.

 

Celtic managed to reduce the deficit with goals from Olivier Ntcham (80) and Leigh Griffiths (90) and made the tie safe for the visitors.

 

The Scottish champions can now look forward to their tenth appearance in the group stage.

LEGO Appeal

It is heart-warming to know that generosity still thrives in this unforgiving world.

 

The Ageop Ricerca association involved in research, funding and support for cancer patients and families at the oncology department of Sant’Orsola hospital in Bologna, Italy for 35 years had made an urgent appeal for toys on their Facebook community two Sundays ago. They were facing a critical shortage of toys for their young cancer patients.

“We have a LEGO emergency”, began the August 13 plea for help from the group director Francesca Testoni.

“At any age, building a car, robot or space shuttle is always a wonderful way to pass the time and allow the spirit to travel”, she wrote. “Can you help us?”

 

Testoni pointed out that the paediatric cancer hospital’s young patients could only play with new and unopened toys for hygiene reasons.

 

Within three days, the hospital received five hundred boxes of new LEGO building bricks, which she said was the most requested toy.

 

“There is a seven-year-old boy who has just entered the transplant unit. He is completely isolated and bored, but now he is building an entire city in his cocoon”, Testoni said.

 

The association also collect toys to give to children on their birthdays or as treats for getting through a particularly difficult treatment, she said.

 

But the annual December drive does not always yield enough toys for the clinic, which has six beds in the transplant unit, 16 in the hospital and treats about 30 young patients in the day hospital.

 

On Friday, Ageop Ricerca thanked supporters online: “Thank you, world”!

Somebody should contact the LEGO company because I'm sure they'll be willing to contribute too.

 

On Saturday, Liverpool had a very average EPL game at best and for a long time, they were staring at a goalless draw.

 

But thankfully, they woke up in the last twenty minutes and managed to break the deadlock to win the game against Crystal Palace by one goal to nil. That was when Sadio Mane produced a neat finish from eight yards after pouncing on a loose ball and shooting past goalie Wayne Hennessey in the seventy-second minute.

 

A precious 3 points were earned.

Defiant Umbrellas

Demonstrators, wearing prison uniforms, march in protest at the jailing of the Umbrella Movement student leaders in Hong Kong, August 20, 2017. Reuters pic

 

Yesterday, thousands of Hong Kong citizens braved the oppressive heat to stream from the eastern district of Wan Chai to the Court of Final Appeal in the heart of Hong Kong Island, protesting the jail terms of Joshua Wong, Nathan Law and Alex Chow, leaders of the 2014 Umbrella Movement rallies.

 

They held signs including: “Give back hope to my children” and “One prisoner of conscience is one too many” as they gathered to show support for the threesome.

Democracy is fine but throughout its history, I don't think Hong Kong has ever been democratic!

 

I'm in a really lousy mood. I need to exorcise this emptiness living inside me. A gnawing void. A blankness that eats me up. 

And who else can I turn to but Yoko Ono's screaming?!

 

I support this view:

I'm Jealous

I shared a music video on the Lectern KL Toastmasters Club Facebook page – Ladies of Soul’s “That’s What Friends Are For”, a Dionne Warwick classic. I was basking in the afterglow of an enjoyable Toastmasters meeting on Friday, that’s why.

 

I was checking out the music videos on YouTube when I stumbled upon this video clip – a moving rendition of Labrinth's "Jealous". And the way it was sung, tugged at my heartstrings too – which makes me want to share this on my blog.

Only because my mood had already taken a sudden 180-degree turn.

I feel what the singer feels. I recognize it all too well. And the pain of emptiness pierces my heart as he sings it.

 

Two lines pertinaciously pin themselves onto the inside walls of my throbbing head:

 

"It's hard for me to say, I'm jealous of the way

 You're happy without me".

 

And I become teary-eyed.

Of course, I didn't lose a best friend as Josh Daniel did.

I just lost me and I'm left with only an empty shell. I'm a dispirited soul cursed to wander this earth until the end of time.

Never mind, I am rambling. I guess I am in the doldrums today.

Some might say I am on emo overdrive.

Still, it doesn't hide the fact that I am feeling the blues. Correction. I feel I am dead inside.

Prison Time for Umbrella Trio

 

 

 

 

 

 

 

AFP photo

 

Joshua Wong, Nathan Law and Alex Chow who had spearheaded Hong Kong’s huge Umbrella Movement protests were jailed Thursday for their role in the 2014 pro-democracy protests – and dealing a fresh blow to the campaign for political reform.

 

Wong, Law and Chow were given terms of six months, eight months and seven months respectively after the court upped their previous non-custodial sentences. The sentences handed down by the city’s Court of Appeal came as fears grow that Beijing is tightening its grip on the semi-autonomous city and that rule of law is being compromised.

 

The Umbrella trio were found guilty last year on unlawful assembly charges for storming a fenced-off government forecourt known as “Civic Square” as part of a protest calling for fully free leadership elections in September 2014.

 

Their arrests sparked wider rallies which exploded two days later when police fired tear gas on the crowds, triggering mass demonstrations that brought parts of Hong Kong to a standstill for more than two months in an unprecedented challenge to Beijing.

 

Wong and Law received community sentences and Chow a three-week suspended sentence at magistrates’ court last August over the Civic Square protest. But Hong Kong’s justice department had sought to enhance those terms, with prosecutors arguing they should receive harsher punishment. Indeed, their wish has come true.

 

Methinks, Hong Kong can expect more protests because this is not the end.

There is apparently this survey involving 1,000 Malaysians by BlackBox Research for Tourism New Zealand that our passion for food is a key focus even when we are holidaying overseas.

 

The study found that eight in 10 Malaysians ranked indulging in a country’s local delicacies as the activity they enjoyed doing most.

Duh! As if we don't already know that!

#OpenYourWorld

An intelligent commercial – Heineken presents ‘Worlds Apart’ An Experiment.

 

A beer advertisement that shows two strangers with opposing views provide proof that there’s more that unites than divides us. #OpenYourWorld

 

I must urge you to watch this commercial!

 

I came up with these two promotional posters for District 51’s Semi-Annual Conference – the last one apparently – in Penang this November.

 

Doing my bit to help the Organizers:

 

 

Tasteless Ad that Features Nude Air Hostesses

Image credit: http://www.dailymail.co.uk/travel/travel_news/article-4760904/Kazakhstan-s-Chocotravel-site-uses-naked-models-ad.html

A travel company's tasteless advertisement featuring nude air hostesses went down like a lead balloon with their customers.

 

Kazakhstan's Chocotravel had released a video promoting their budget flight services, which adds nothing to the price of a plane ticket.

 

But the offensive footage hasn't had the desired effect, with customers lambasting the company as sexist.

 

The advert starts with just a head shot of one hostess as she gasps in apparent ecstasy at the offer. Then a second stewardess blows a kiss to the camera.

 

But it is only when the camera pulls back that it is revealed that the seven stewardesses in the lineup are naked apart from their caps and neckerchiefs.

 

Only a strip running across the screen like a booking form hides their breasts from view.

 

Then as the camera pulls back even more, they whip off their caps to protect their modesty and hide their private parts from view.

The ad looks like a spoof that would not be out of place on a show with Sacha Baron Cohen's comedy Kazhak creation Borat.

 

Really, what were they thinking of?!?!?!

 

I was at the Speakers Dream Toastmasters meeting today. And I delivered an Ice-breaker – titled “Born to Speak”. This is my CC Round #44!