Alain Tanugi asked:


I think it was the Financier Leo J. Hindery Jr who once said: ‘I think there are people, including myself at certain times in my career, who because of their uniqueness warrant whatever the market will bear.’ But the questions beg HOW much is too much? and Should macroeconomic woes slow CEO pay growth?

I recently read in the Associated Press that even as the economy slowed down in America “CEO pay still chugged to yet more dizzying heights last year.’ The top 10 highest paid CEOs took home a total of more than $500 million, but half of those companies saw huge drops in profitability at their companies.

One of the most exasperating things to shareholders and the public is when a CEO receives millions or tens of millions of dollars of compensation regardless of performance. This practice goes fundamentally against the culture of rewarding on the basis of ability and merit that underpins the free market system. Recent examples include: Marriott International chief J Willard Marriott Jr – his 2007 pay was $44m, up 22%, just six percentage points lower than Marriott’s stock price drop or Stan O’Neal, Merrill Lynch’s former boss, left with $159m after losing $8 billion.

Shareholders and politicians are advocating bringing in rules for companies that would allow shareholders to vote on executive pay. Executives in Europe have home far less compensation than their American counterparts in the past. But with leadership compensation in Europe on the rise, these pay increases have citizens in European nations deeply unsettled. The public indignation on both sides of the Atlantic has contributed to a unique political debate over what to do about excessive executive pay. Executive pay figures in Asia are still not as widely accessible as in Europe and America and it is difficult to compare. A recent study conducted by the CFA Institute Centre for Financial Market Integrity said that reporting compensation of executives on an individual basis is the practice in the United States, Britain and Australia and is advocated by institutional investors worldwide. Prevailing regulations and practices in Hong Kong, Japan and Singapore however leave much to be desired.

Jean-Claude Juncker, president of the European Commission’s “Eurogroup” of finance ministers, recently called excessive pay a “social scourge” and demanded action. When L’Expansion, a French business magazine, calculated that pay for the country’s bosses went up 58% in 2007, the finance minister, Christine Lagarde, said it was “scandalous” and threatened regulation. Nicolas Sarkozy, president of France, and Horst Köhler, president of Germany, have also denounced high pay.

New legislation the Netherlands will see the law setting EU500,000 as the level of annual salary or severance payment at which extra taxes must be paid. Germany’s Social Democratic Party is calling for legislation to curb pay, though its partner in government, Angela Merkel’s Christian Democratic Union, has so far resisted. At the same time the European Commission is working on a response to the Eurogroup’s complaint.

Just how extreme IS executive pay in Europe? As European firms compete for global talent it certainly has risen substantially in the last 10 years. Foreign executives now run seven of the firms in France’s CAC 40 index and five of Germany’s DAX 30. American-style bonuses and long-term incentive plans are now commonplace.

However European firms still pay a fraction of what is paid to their counter parts in America. According to Hay Group, a management consultancy, the median European executive earns just 40% as much as his equivalent in America. It’s also notable that both American presidential candidates – John McCain and Barack Obama – have been making compensation a campaign issue.

There is an important difference though companies in Europe seem to be more determined than American ones to link compensation to performance. In America share grants are often not tied to performance, whereas European firms usually attach performance criteria to any share grants, typically depending on a comparison with a peer group. Dan Vasella, boss of Novartis, a Swiss pharmaceutical giant, and a favourite target of pay activists, earned SFr17m ($14m) in 2007, down 33% from 2006, because he missed his targets.

The extreme rise in European executive pay has sparked an intense debate in countries that have been characterised by a relatively strong sense of economic solidarity and impartiality in the past several decades. A July 2007 Financial Times/Harris public opinion poll found that over 60 percent of those surveyed in the UK, France, Italy, and Spain would like to see their government set caps on top business executive pay. In Germany, a 47 percent plurality supports pay caps.

In America, only 32 percent of the public supports an outright pay cap on executive earnings a recent poll shows. However 77 percent of Americans say corporate executives ‘earn too much.’ Some members of Congress have responded by introducing legislation to curb excessive pay through tax reform and giving shareholders the right to vote on pay packages.

I recently saw an interview with Sarah Anderson, who compiles the Executive Excess report on CEO pay on a yearly basis. She discusses some of the issues raised in this column in her interview and I recommend that you take some time to view it. (www.youtube.com/watch?v=X2lKfRFhG0M.)

From what I have read and heard in the last year signs point to a strong possibility that meaningful reforms to rein in excessive executive compensation could be a prospect, as many political leaders in Europe and the United States seem to be finally catching up to the public uproar. It has to be said though that compensation is a complex issue. Different circumstances and industries dictate different packages and even severance pay may be justified if a change of control is the end goal. One would hope though that politicians would reject laws about pay, which are too widespread to be useful. Strict legislation might well compel leaders away from listed companies and create compensation packages even more complex-and so much more difficult to monitor.

Carol Forsloff asked:


 

Whatever people say about Joe Biden’s gaffes, no one would accuse him of not being intelligent and articulate. We all know he can be wordy, perhaps, but not one who doesn’t have a lot of governmental experience that gives him a broad perspective on the national level.

Biden was laid back for awhile. We didn’t see him much on the national news except for the debate. But given the outspoken nature, and the type of speech of his Vice Presidential rival, Joe Biden has picked up pace and is beginning to take on the opposition with the type of passion and flair for which he has become known to many.

At a time of great controversy, Joe Biden may well be the one who indeed helps us make the final decision. He hasn’t gotten into the mud with the others and has a record that may upset some conservatives, but even those people know Biden to be someone who knows his material. If these same people were to be asked to choose between Biden’s knowledge on the economy and that of Sarah Palin, most of them would choose Biden as well.

We should focus attention on Joe Biden these days for lots of reasons. First of all, he has the background that we just discussed. Second both John McCain and Barack Obama have more than the ordinary amount of physical risks. McCain has had cancer four times; Barack Obama, as a black man, has had his life threatened publicly with one plan intercepted before the Convention. So the position of Vice President is more critical now than almost any other time except during the wars fought by the United States.

Here’s a snapshot of Joe Biden’s experience. Biden was born in  Scranton, Pennsylvania where he lived before becoming involved in politics. He received his law degree in 1969, then became a city councilman the following year. He became an attorney in 1969 and was elected to serve on the city council in 1970. Biden became one of the youngest senators ever elected when he first became Senator in 1972 and has been re-elected by comfortable margins to serve as one of those with a term that has been one of the longest terms in the Senate of anyone presently in Congress.

Biden presently chairs the Foreign Relations Committee. This certainly gives him the foreign relations experience the country needs now. He has helped resolve conflicts around the world, especially the war with Bosnia. Although Biden voted in favor of the original Iraq War Resolution in the Congress, when he recognized that he, along with other Senators had the wrong facts presented to them, proposed resolutions in order that the US take a different course in the region of the Middle East.

Joe Biden’s knowledge extends beyond foreign relations experience. He has served as chairman of the  Senate Judiciary Committee where he has dealt with drug problems, crime, and violence against women issues.  He also served as chair of the Judiciary Committee during the contentious hearings of Robert Bork and Clarence Thomas.  Biden chaired the Judiciary Committee during the contentious hearings. That allows him to manage controversy and get people talking about important issues. He knows qualifications, how to understand the needs of people in social situations and has a record of advocacy.

Most of the talk on the Internet seems to come from those who question whether Joe Biden is either liberal or conservative enough and whether his gaffes get him into trouble. That might be a good thing, given the extremes of left and right. Perhaps that’s because Biden may not the glamorous creature that we cling to these days, but his steady hand on the till that McCain referred to in the town hall meeting with Barack Obama might be what we need in a crisis. These are the days when potential crisis can occur. So he deserves our serious examination.

James William Smith asked:


The No Child Left Behind Act certainly had an ambitious goal. It mandated that all students tested in reading and math would reach grade level by the year 2014.

Six years ago, when the law was passed, almost no one believed that this standard for success was realistic. However, despite a lack of reality, the law was approved by Congress with sanctions for school systems that fail to make adequately yearly progress toward that 2014 goal, sanctions which cost millions of dollars and result in school takeovers.

However, the Act had a politically correct title and what politician could ever cast a vote that would leave a child’s education behind. So, the law was passed under a fancy heading, but with a measurement for success that was beyond the outer limit of reality.

This political rhetoric meets reality dilemma on the issue of education exists in this Election 2008 Presidential campaign. Consider that it will be up to the next Congress and the newly elected President to decide whether to reauthorize the No Child Left Behind Act in 2009.

So, where do the 2008 Presidential candidates stand on the reauthorization of the “No Child left Behind Act”, since one of them will be an important decision maker concerning its future after the November election in 2009? Unfortunately, their positions on the current law are high on political rhetoric but lacking in real specifics.

Republican John McCain, who voted for the original legislation, has admitted “that the law should be fixed, especially in the areas of testing students with disabilities and non-English speaking students, but the law should not be repealed.” He also has commented on the need for additional “emphasis on science and math.” Senator McCain also supports school vouchers and additional choice options.

Although McCain appears to be quite supportive of the law, Matt David, a spokesman for the Senator, says of McCain, “His support for reauthorization will depend on what amendments are made to the bill, not only what’s added to it, but also what could be taken away.” It certainly looks like the Senator from Arizona would prefer to lead from behind on the education issue.

Democratic candidate Barack Obama has not been complimentary in his comments about the law. Speaking to the National Education Association, he has called the legislation “one of the emptiest slogans in the history of America.” Specifically, he has been critical of the heavy reliance on standardized tests which “has pushed out a lot of important learning that needs to take place,” and worries that “creativity has been drained from the classroom.” Concerned also about adequate funding, Obama has suggested that “the law left money and common sense behind.”

Obama would reform the No Child Left Behind law by funding it. He would improve the assessments used to track student progress to measure readiness for college and the workplace and improve student learning in a timely, individualized manner. Obama would also improve the accountability system so that there is support, rather than punishment, for schools that need improvement.

It’s easy to see the political rhetoric that would appeal to Obama’s voting base, but much harder indeed to discover a detailed plan on the funding and specific reform for the current federal education law from the Democratic candidate in this election year.

Undoubtedly, the proposed changes in the law that will be necessary for its reauthorization will focus on the following controversial areas:

1. How would the legislation be changed to deal with the measurement metric known as Adequate Yearly Progress? This method of measuring student and school success has been described by many as being “too inflexible, too arbitrary, and too punitive.” It is difficult to find anyone who really believes in the current measurement objective and its timeline is thought to be unrealistic as well.

2. Everyone wants to improve teacher salaries and training. Whether this should be done with some kind of “pay for performance” plan will be subject to serious debate.

3. There are many who are calling for national curriculum standards and testing. Although it does not appear that Congress is ready for such a change, it will be debated.

4. Since the No Child Left Behind Act was never properly funded by Congress, the amount of money needed for federal education programs will certainly be an important issue for the next Congress to consider.

5. Many people have expressed concern that the mandated testing in language arts and math has caused schools to spend considerably less time and effort on other curriculum areas, as well as more time and expense preparing students to pass mandatory tests.

As a new school year begins in America this fall, the Presidential candidates should be asked the necessary questions in order to determine their specific vision of the American educational system of the future. The voters and the national media should insist that each of them propose a specific and detailed education plan.

The time has come for the Presidential candidates and Congressional politicians to come forward with creative solutions to fix or abolish the current educational system. Continued political rhetoric on the issue is simply not enough. In fact, political rhetoric has already met the outer limits of tangible reality for the 2002 landmark federal education law, known as “No Child Left Behind”.

Bobby Parrish asked:


Recently, on CNN’s “State of the Union”, Senator John McCain, R-Arizona, said we have the best health care system in the world. I have heard this more than once from people who should know better. It seems like a battle cry from the right. Unfortunately, people, being the sheep we are, believe this BS without ever checking the facts. (Maybe that is what the purveyors of these lies are hoping for).

Now let me say here that everyone is entitled to his or her own opinion, but they are not entitled to make up his or her own facts.

So with that in mind, here are some facts which can be backed up simply by spending a few minutes on the computer. (But who wants to waste time fact checking when all one has to do is lie with authority). Heaven forbid that reform opponents actually check facts!  The World Health Organization ranks the United States 37th in overall health system (above Slovenia but below Costa Rica). We are 72nd in level of health, 24th in life expectancy, 32nd in health distribution, 1st in responsiveness (lots of emergency rooms), 19th in child well-being, 37thin infant mortality land 54thin fairness in financial contributions. Does that sound like the best system in the world. And to achieve these poor levels of care, we spend more per capita that any country and more of our gross national product than  any place on earth except the Marshall Islands. Sounds like the best system in the world to me, NOT!

Another tactic the anti-reformers like to use is to say they don’t want a bureaucrat deciding what care we get. All insurance companies have a bureaucrat who is only concerned about the company’s bottom line. They decide if a procedure or a medication will be covered. Why do you think the doctors have to call for a pre-authorization? More BS from the right.

Another question, why do you think the Insurance Companies are against a government run plan? They would have to, horror of horrors, compete for your business. Oh, and to answer the critics who think the government can’t run a health care program, who runs the military health care system? It has some flaws, of course, just like any other system, but I have never met a military family who was not satisfied with their level of care.  Another anti-reform statement put to rest.

Here’s another good one! Keep the government’s hands out of my medicare! Huh???? If this is not a stupid statement, I’ve never heard one. Who do you think is  running medicare now?

The Republicans have said the government has no business making health care decisions. The should stay out of people’s lives. Remember Terri Shiavo? The Grand Old Packyderms were sure quick to get into that arena. I guess they don’t think people will remember that.

One of the most bogus statements I have heard regarding health care reform is that the plan has “Death Panel” who will decide if Grandma lives or dies.  Where on earth do these people get ideas like this? And besides, these decisions are already being  made on a daily basis throughout the country by doctors and families.

The bottom line here is to do nothing is insane. People in the richest country in the world should not have to decide between food and medicine. They should not have to worry about having to file backruptcy because of health care bills. And contrary to what the anti’s say, some of the uninsured are in that position not because they didn’t try to help themselves, but because the cost got to extreme and their employer dropped coverage, the company moved outside the US and they lost their jobs and many other conditions they had no control over. It makes my blood boil when I hear an anti accuse the uninsured of  causing their own problems.

In closing, I have a simple solution to the problem—–Congress can give us the health care plan they have.

Bobby Parrish