Casting my mind back to that time, the media extravaganza caused by that simple resolution was astonishing. You might have thought the planet had just been invaded by alien creatures from a distant galaxy.
A recent article in the Regina Leader-Post and Saskatoon Star Phoenix entitled: PotashCorp president and CEO paid $17M, reminded me of that time. Constantly reading stuff like this article makes me wonder if those delegates didn't have a point.
Executive compensation is clearly out of control, and bears no relationship to what the other 95+% of us have come to accept as fair and reasonable. When is enough - enough?
The article opens as follows:
"The top five executives of Potash Corporation of Saskatchewan were paid $32 million in 2007 according to company documents, the same amount the federal Conservatives plan to give to Crown prosecutors to battle illegal drugs in its recently announced budget.
The sum does not include the value of the shares held by the top executives, which numbers $72.5 million -- $46 million of which belongs to company president and CEO William (Bill) Doyle, according to PotashCorp's management proxy circular released Friday." (read more....)
8 comments:
The better question is who should decide how much is enough?
I would rather in a society where someone can make $17 mil than in one in which someone sets my earning ability.
Cuba has all the necssities of life. No one starves. The state provides. But these people get crazy excited for a tube of toothpaste.
Is that the kind of society you're advocating?
Hi Mike,
Are you still paranoid about the mythical "red menace"?
Larry I appreciate your point but when Potash Corp, etc. compete nationally and internationally for managerial talent how do you propose that they pay vastly lower than the market rate for said talent while maintaining a quality management team? Any corporation that takes a stand against ridiculous managerial pay (and I agree that it is ridiculous) risks becoming the CFL of the business world--anyone with the real talent takes off to another corporation (ie the NFL). How can any one corporation, province, or heck even any single country buck the trend without getting stuck with constant turnover or poor management?
Hi KC,
Thank you for participating in this blog.
I never said that it was the fault of the Potash Corporation, and I certainly don't have all of the anwsers.
Some are suggesting that CEO/Executive compensation should be tied to a maximum multiple of the average salary of the workers in an enterprise. Like 10 times the salary of an average worker - or some other factor.
Folks should check out how they do it in the Mondragon Corporation Cooperative (a diverse global enterprise originating in Spain) - they are extremely successful.
And I'm not the only one raising this question - check out this link: Directors Blame Compensation Consultants for Excessive CEO Pay Problem
In my opinion it comes down to simple ethics; excess vs. moderation. Does one person need $17 million dollars? Or even need $17 million dollars to truly have an exceptionally enjoyable life while securing his family’s future? In my opinion I highly doubt it.
On the other hand, I do not wholly agree with a salary cap merely on the principle that I find it absurd we as individuals, business partners or society at large cannot use restraint and good judgement.
Finally, money in the bank without purpose or gained in excess is worthless except to those that need it most.
In my view its simple. The market(eers) have sold us a bill of goods for years. "We must compete in a global market".
What they don't say is its their market. They have trashed Chile, Argentina, Bolivia, most of the Asian economic markets, Russia, Poland ... and they speak of competition?
No, I'm sorry, when Devine and his cronies (Brad Wall being one of them behind the scenes) sold off the Potash Corporation it was bound to lead to this kind of bleeding of our resources into the corrupt hands of a few greedy men.
Oh, I have heard the great myth that we need to have incentives for these tremendously talented and powerful people. I have yet to see their talent and I shudder at their greed and power.
Ayn Rand, although the profit of these barons of selfishness, also gave us insight to understand the scenario which has become the society that rewards few at the peril of the whole.
Should we have limits on what people can earn. Absolutely and without question.
Armand
Larry,
It's a publicly traded company. Don't like it -- sell your shares. For employees -- if they don't like it, they can quit.
My you guys are a bunch of nannies.
If you are one of those people outraged by PotashCorp’s compensation for senior management, I suggest you do not buy shares in the company. You should also ask your pension administrator and financial advisor to take you out of any funds that hold PCS shares because you probably own some already. Then again, maybe that’s not such a good idea considering PotashCorp is one of the world’s best performing companies.
It not only makes a lot of money for its shareholders, but also provides many of the best career opportunities and highest paying jobs in Saskatchewan. In addition, it’s one of the provinces best corporate citizens. One that pays enormous amounts in taxes and royalties and still contributes generously to the community.
One must wonder why there is so much interest in something that is really no concern to anyone unless they own shares in the company. If you do own shares, you need to take the matter up with the board of directors. In the end, they will just tell you that is what a good CEO and senior executives are paid today.
Whether or not someone is actually worth what they are paid is pure speculation. Take rapper 50 Cent, for example, is he really worth $133 million? Or is Simon Cowell of American Idol fame worth $45 million? Is late night TV host David Letterman worth $40 million, basketball’s Shaquille O’Neil worth $35 million, or television’s “Judge” Judy worth $30 million? Are pitcher Roger Clemens and actor Kiefer Sutherland worth $22 million? Is teen golfer Michelle Wie worth $20 million? What about talk show host Ellen DeGeneres and news anchor Katie Couric, are they worth $15 million? If they are, what is a corporate executive who creates wealth and contributes something of real value to society worth?
It has been suggest that the real issue behind the outrage over executive compensation, at least in Saskatchewan, comes from the fact that PotashCorp was once a crown corporation and people feel we are somehow losing out because we sold it. I say get over it, a small share of a big pie is much better than a big share of a small pie.
In the 1970s, the NDP Government took over a number of privately owned potash mines to form the Potash Corporation of Saskatchewan. A politically appointed board of directors then oversaw management of the company. As a crown corporation, PCS was financed through the provincial government and had to compete with many other demands for public funds, including hospitals, schools and roads.
In November of 1989, PCS was subsequently converted from a crown to a publicly-traded company known as the Potash Corporation of Saskatchewan Inc. (PCS Inc.) and almost instantly gained access to global capital markets through its listing on the New York and Toronto Stock Exchanges. The results led to a significant increase in the size of the company, the diversity of its business and its total employment. In short PCS Inc. was transformed from a provincial mining company to the world’s largest fertilizer enterprise producing the three primary plant nutrients: potash, nitrogen and phosphate. The company has since been renamed PotashCorp to reflect its global reach as an integrated producer of fertilizer, industrial and animal feed products. This is something that would never have happened as a crown corporation because it simply could not have raised the amount of money required.
The growth that resulted from privatization and access to capital brought with it a dramatic increase in sales, profits, and the taxes and royalties paid to government. Consider that during the entire 10-year period from 1980 to 1989 PCS had total sales of some US$2.1 billion, profit of about $ 155 million, and employed on average 1,736 people. As a crown corporation it did not pay taxes.
In 2007 alone, PotashCorp had sales of US$5.2 billion, net income (profit) of $1.1 billion, and employed 5003 people. More importantly to you and I, the company paid $135.4 million in royalties and taxes to the Saskatchewan government and another $154.1 million income tax to the federal government. In one year, we the people received more money from PotashCorp than we had during its entire history as a crown corporation. Now tell me that privatization was a bad idea.
And as far as the shareholders are concerned, I have a feeling they are fairly happy. In 1989, when PCS, Inc. shares first hit the New York Stock Exchange, they traded for a high of US$2.54. Today, these shares are worth around $150. Now tell them that their PotashCorp executives are not worth the money they pay them.
Personally, I just want say thank you to the investors, the executives and all the employees for making PotashCorp a success and for sharing that success with the people of Saskatchewan. I just wonder where the province would be today without you.
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