[REBORN FROM THE ASHES][comment][12.23]&[12.24]

tequilawineUID: 2702008

shopfloor   sanguine  mediocre  tenure lacklustre public-sectorpay bandits start off   hedge fundmanager   crunch  in the first place bail out  bonuse galore thrash out exacerbate scapegoat  arm's-length markets  crony decile  bust  post-melt down  subprime dominoes topple avalanche metric ground zero  toobject  morale

1  The debate about executive pay, though never cool,is particularly hot at the moment.
2  The second measure replaces expected stock option values with values actually realized and realised pay measures what CEOs walk away with.  是不是说股权交易变成能够直接带走的现金交易方式？
3  And the post-meltdown awards are all but guaranteed to continue to create perverse incentives that will reward management and further damage the interests of shareholders and every other participant in the economy.
4  Even as outliers, they still demonstrate the failure of the system to ensure a vigorous, arm's-length system for determining pay and the inability of the system to require an effective incentive programme with a genuine downside as well as an upside. downside, upside 什么意思？
Leaving the passage i have read behind, what really impressed me is that both sides seems so reasonable. However, with deeper perception, we can know none of them are flawless.
From the proposer way, it is obvious that the over concentration on CEO salary seems dispensable and interferential. To testify his opinion, kplan gave us two thesis. First, are the ceo really overpaid? From this point, he tried to offer us a particular, embedded, extensive demonstration. Basing on the illustration and examples, no one can gainsay the truth that the salary has declined, indeed, we need to button down the comparison between the statistics is really comparable or reliable, in other words, i also deem that the salary in the 1998 is also overestimated, as the economy is booming up at that moment. Another one is that if the CEO get performance related paid. Since another hot issue to bust have come out before spectators, to dissolve this qualm, author cites some typical models, however, it is so specific to some extent that can not explain the common syndrome. In stead, we agreed that it did exist in some high efficent and effective company, whereas the most left are not.
Turn around with another direction, we also can oberseve the deficiency. It has too many bits and pieces and you can not elicit your conclusion by the several examples. The more narrow spectrum in your essay, the less plaudit you gain form the readers.

豆腐店的86UID: 2512956

Executive pay
This house believes that on the whole, senior executives are worth what they are paid
生词
读多遍才懂的句子
好句子，好表达法
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About this debate

Over the past few decades executive pay has risen dramatically. Bosses who were once paid ten times as much as shopfloor workers are now sometimes paid as much as 300 times as much. This trend was never popular, even during good times. But today it is becoming radioactive, as governments step in to rescue failing companies and ordinary people are forced to tighten their belts.（popular和radioactive相呼应）

Is the anger justified? Some argue that executive pay is a long-standing disgrace. Pay is often not tethered to performance. Huge rewards for the few demotivate the rest of the workforce. Others are more sanguine. Successful executives, such as Jack Welch, former CEO of General Electric, can add hugely to a firm's profitability, benefiting workers, managers and shareholders alike. The growing pay of executives has to be balanced against the growing difficulty of their jobs, particularly as turnover in the boardroom increases.

Opening statements

Defending the motion

Steven N. Kaplan Neubauer Family Prof. of Entrepreneurship & Finance, University of Chicago Booth School of Business

In the United States, the United Kingdom and elsewhere, CEOs are routinely criticised for being overpaid.

Against the motion

Nell  Minow Editor and Co-founder, The Corporate Library

Excessive executive compensation of the past decade is both a symptom and a cause of the current economic mess.

The moderator's opening remarks

Oct 20th 2009 |   Adrian  Wooldridge

Oneof the few things that anti-globalisation campaigners and stockmarket investors agree upon is that executive pay is out of control.
It is not hard to understand this shared outrage: executive pay has exploded since the 1980s. For most of the postwar era executives earned a few multiples of the median pay. But there after, starting in America and slowly spreading to the rest of the world, the multiples increased exponentially. Today many American workers earn in a year what theirboss takes home in an evening.

Isn't this a disgrace?(连续两篇看到这个表达法！disgrace！) Critics of executive pay worry that even mediocre bosses are given outsized rewards. Robert Nardelli received a $20m pay-off when he left HomeDepot even though the share price had fallen during his six-year tenure. Carly Fiorina was $180m better off when she left Hewlett-Packard despite a lacklustre tenure. Defenders of executive payargue that great bosses such as Louis Gerstner, the former boss of IBM,and Jack Welch, the former boss of General Electric, are worth every penny because they create huge amounts of wealth for both shareholders and employees.

The debate about executive pay, though never cool, is particularly hot at the moment. Workers have been squeezed by the recession. Unemployment is approaching 10% in the United States and much higher numbers in many other countries. Numerous governments are planning to deal with their rising deficits by freezing public-sectorpay. And yet many bosses and bankers continue to make out like bandits—or so lots of people think.

We are lucky to have two of the best people in the business to debate this subject. Steven Kaplan,who proposes the motion, teaches at the University of Chicago's Booth School of Business. Nell Minow, who opposes it, is a long-time shareholder activist and chairwoman of the Corporate Library, a research company. (For people who want to know more about her she isalso the subject of a profile in a recent issue of the New Yorker.)
MrKaplan starts off by making two fundamental points. CEO pay has not gone up in recent years; indeed, it has been dropping since 2000,particularly in relation to other well-paid groups(“与。。。对比”的表达方式), such as hedge fund managers, lawyers, consultants and professional athletes. Nor is CEO pay unrelated to performance. Boards are increasingly willing to fire CEOs for poor performance.

Ms Minow focuses heavily on the relationship between pay and the recent credit crunch. She points out that executive pay helped to create the mess in the first place:Country wide's CEO, Angelo Mozillo, made more than $550m during his time in office. She also points out that the fact that many companies that were bailed out by the government continue to pay their CEOs huge salaries and bonuses is damaging the credibility of the system.
Such bold opening statements raise questions galore. Is Mr Kaplan justified in starting his account in 2000 rather than 1980, when executive pay exploded. And is Ms Minow right to concentrate so heavily on the financial sector? These are only a couple of the questions that we need to thrash out in the coming days.


The proposer's opening remarks
Oct 20th 2009 |   Steven N. Kaplan

In the United States, the United Kingdom and elsewhere, CEOs are routinely criticised for being overpaid. Critics argue that boards do not respond to market forces, but, instead, are dominated by or are over-generous to their CEOs. Boards are criticised for not tying CEOs' pay to performance. These criticisms have been exacerbated by the financial crisis and the desire to find scapegoats.

I argue below that the critics are wrong and that there are many misperceptions of CEO pay.While CEO pay practices are not perfect, they are driven by market forces and performance. Contrary to public perception, CEO pay has notgone up in recent years. In fact, the average CEO pay (adjusted for inflation) has dropped since 2000, while the pay of other groups has increased substantially. Similarly, the view that CEOs are not paid for performance is wrong. In fact, the opposite is true and board sincreasingly fire them for poor performance. And, most recently,consistent with market forces driving pay, the US and UK governments each hired a new CEO (of AIG and the Royal Bank of Scotland) for pay exceeding that of the median large company CEO.
It is useful to understand how CEO pay is measured. It includes three components:salary, bonus and stock-based pay. It is usually measured in two ways.The first is the sum of salary, bonus, restricted stock and the expected value of stock options. I call this expected pay. Expected pay measures what boards believe they awarded the CEO. This is the best measure of what a CEO is paid each year. Note that the CEO does not actually walk away with this money. The second measure replaces expected stock option values with values actually realized and realised pay measures what CEOs walk away with.
The first graph shows average and median expected CEO pay forS&P 500 CEOs since 1994 (adjusted for inflation). It shows that median CEO pay has been stable since 2001; it has not increased. Andaverage pay has declined substantially. In fact, average CEO pay in2008 is below the average in 1998.


While average CEO pay has declined, the pay of other highly paid groups has increased. The second graph shows S&P 500 CEO pay relative to the income of the top 1% of US taxpayers. Relative to those other groups,CEOs are no better off in 2008 than in 1994. Strikingly(连接词用得好), relative CEOpay is a half of what it was in 2001, a huge decline.()


Which are those groups that have earned increasingly high compensation? Hedge fund, private equity and venture capital investors have increased their assets and fees substantially, translating into high pay. By one estimate(据估计的好说法), the top three hedge fund managers earned more in 2007 than all 500 S&P 500 CEOs combined. Professional athletes, investment bankers, consultants and lawyers also have benefited greatly. For example, from 2004 to 2008, the inflation-adjusted pay of partners at the top 20 law firms increased by 12% while that of S&P 500 CEOs dropped 12%. Those law firms had over 3,000 partners making an average of $2.4m each.

One can look at the Obama administration for other examples. Larry Summers made $8m (more than the median S&P 500 CEO)giving speeches and working part-time for a hedge fund. Eric Holdermade $3.5m as a law partner.

So, while CEOs earn a lot, they are not unique. The pay of people in the other groups has undoubtedly been driven by market forces; all are compensated in arm's-length markets,not by cronies. Technology, globalisation and scale appear to have increased the market value of these groups. CEOs have not done better and, by some measures, have done worse. Those who argue CEOs are overpaid have to explain how CEOs can be overpaid and not subject to market forces, when the other groups are paid at least as well and are subject to market forces.

Why is the pay of these other groups relevant for CEOs? Top executives regularly leave to work for private equity firms and hedge funds. Law partners and consultants leave to work for public companies as general counsels and executives. Relative pay matters and all these groups are paid according to market demand.Markets are the driving force for senior executives in all these industries and talented people jump across industries, based on market perceptions of their worth.

Critics also argue that CEO pay is not tied to stock performance. Again, that is not true. Looking at what CEOs actually receive—realised pay—Josh Rauh and I found that firms with CEOs in the top decile of realised pay earned stock returns 90% above those of other firms in their industries over the previous fiveyears. Firms with CEOs in the bottom decile of realised pay underperformed by almost 40%. The typical CEO is paid for performance.
This was reinforced in 2008, when average realised CEO pay declined by 25%(according to S&P's Execucomp). And Equilar, another provider of CEO pay data, estimated that the typical CEO experienced a net worth decline of over 40%.

The final myth to bust is that CEOs control their boards and earn high pay through this control and not performance. In fact, CEO tenure has declined, from ten years in the1970s to six years today, and boards have got tougher on their executives when they do not perform.

In sum, market forces govern CEO compensation.（简介，明了） CEOs are paid what they are worth. Talented individuals, who are perceived to be valuable, can move between industries to be compensated well. The clearest example of this is that even governments have to pay highly for talented executives. Recently,the Royal Bank of Scotland (under UK government control) hired a CEO with a package worth up to $16m; AIG (under US government control)hired a CEO with a package worth up to $10.5m. For these critical jobs,both of these executives received compensation exceeding the pay of the median S&P 500 CEO.


The opposition's opening remarks
Oct 20th 2009 | Nell  Minow

Excessive executive compensation of the past decade is both a symptom and a cause of the current economic mess. And the post-meltdown awards are all but guaranteed to continue to create perverse incentives that will reward management and further damage the interests of shareholders and everyother participant in the economy.

Incentive compensation rewarded executives for the quantity of transactions rather than the quality of transactions. It inevitably led to failures like the subprime disaster and the dominoes it toppled as it took the economy down with it. Worst of all, the avalanche of post-bail out bonuses and departure packageslike the $53m Ken Lewis got from Bank of America have severely damaged the credibility of Wall Street and the American financial markets as awhole. The billions of dollars of losses do not come close to the reputational hit to American capitalism, which will increase the cos tof capital for all US companies.

Panglossian observers will always be able to find some metric to justify any level of pay. But the results speak for themselves. The decisions that led to the meltdown were made by executives who knew that they would be paid tens, even hundreds of millions of dollars no matter how successful the consequences of those decisions.

Let us look at ground zero of the subprime mess, Countrywide, where Angelo Mozilo made more than $550m during his time as CEO. When the compensation committee tried to object to his pay levels, he hired another compensation consultant,paid for by the shareholders, to push them into giving him more. He also pushed for, and was given, shareholder subsidies, not just for hiswife's travel on the corporate jet but for the taxes on the imputed income from that travel. Instead of telling Mr Mozilo that he had no business asking the shareholders to subsidise his taxes, the board meekly S&P 500 CEO signed off on it, making it clear to everyone in the executive suite that the pay-performance link was not a priority.

By the end of 2007, when Countrywide finally revealed the losses it had previously obscured, shareholders lost more than 78% of their investment value. Meanwhile, in early 2007 Mr Mozilo sold over $127m inexercised stock options before July 24th 2007, when he announced a $388m write-down on profits. Before the bailout, Countrywide narrowlyavoided bankruptcy by taking out an emergency loan of $11 billion froma group of banks. Mr Mozilo continued to sell off shares, and by the end of 2007 he had sold an additional $30m in exercised stock options.There is the definition of outrageously excessive compensation.

Countrywidere sponded to a shareholder proposal that year asking for a non-bindingadvisory vote on its pay plan by urging shareholders to oppose it because "Countrywide has been an outstanding performer" and because"The Board's Compensation Committee has access to the best information on compensation practices and has a thorough process in place to determine appropriate executive pay." They could hardly have done worse. And it is likely that some market feedback on the structure of the pay plan could have given compensation committee members Harley W.Snyder (chair), Robert J. Donato, Michael E. Dougherty and Oscar P.Robertson worthwhile guidance.

Michelle Leder of the indispensable Footnoted.org website discovered that Frank A. Keating,Charles T. Maxwell and Frederick B. Whittemore, the compensation committee at Chesapeake Energy, not only paid the CEO, AubreyMcClendon, $100m, a 500% increase as the stock dropped 60% and the profits went down 50%, they spent $4.6m of the shareholders' money to sponsor a basketball team of which Mr McClendon owns a 19% stake, they purchased catering services from a restaurant which he owns just under a half of, and they took his collection of antique maps off his hands for $12.1m of the shareholders' money, based on a valuation from the consultant who advised Mr McClendon on assembling the collection. The board justified this by referring to Mr McClendon's having to sell more than $1 billion worth of stock due to margin calls, his having concluded four important deals and the benefit to employee morale from having the maps on display in the office. A market-based response would be: (1) that was his risk and it is inappropriate to the point of misappropriation to force the other shareholders, already substantially out of pocket with their own losses due to his poor leadership of the organisation, make up for his losses (2) if the deals are good ones, he will be adequately rewarded when the benefit of those deals is reflected in the stock price; and (3) you have got to be kidding. If this is pay for performance, what exactly is the performance we are paying for?

These may be anecdotes, but they are illuminating ones. The numbers and details may be at the extreme, but the underlying approaches are representative. Even as outliers, they still demonstratethe failure of the system to ensure a vigorous, arm's-length system for determining pay and the inability of the system to require an effective incentive programme with a genuine downside as well as an upside.

In my comments, I will discuss the seven deadliest sins of executive compensation, the two key elements that are essential for any plan thatmerits support from investors and the only metric that matters in looking at pay.
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executive pay  高管总裁的薪酬
shopfloor level 车间级，这里指生产一线的员工（shopfloor workers）
disgrace to humiliate by a superior showing
tether  to fasten or restrain by or as if by a tether
demotivate  NOT FOUND 打击积极性？
sanguine  CONFIDENT, OPTIMISTIC
profitability affording profits  : yielding advantageous returns or results 有利可图
exponentially expressible or approximately expressible by an exponential function;  especially   : characterized by or being an extremely rapid increase (as in size or extent)  *an exponential growth rate*  成指数增长，激增
tenure the act, right, manner, or term of holding something (as a landed property, a position, or an office);  especially   : a status granted after a trial period to a teacher that gives protection from summary dismissal
deficit a (1) : deficiency in amount or quality  *a deficit in rainfall*  (2) : a lack or impairment in a functional capacity  *cognitive deficits*  *a hearing deficit*  b : DISADVANTAGE  
public-sector 公共部门
activist 激进主义份子
hedge fund A hedge fund is an investment fund open to a limited range of investors that undertakes a wider range of investment and trading activities than long-only investment funds, and that, in general, pays a performance fee to its investment manager. Every hedge fund has its own investment strategy that determines the type of investments and the methods of investment it undertakes.  
Nor  NEITHER (注意本文中的用法)
crunch a severe economic squeeze (as on credit)  危急情况，经济收缩
galore ABUNDANT, PLENTIFUL ? used postpositively  *bargains galore*
thrash out 愿意为打，打败某对，本文中指澄清某事
exacerbate  to make more violent, bitter, or severe  *the proposed shutdownTwould exacerbate unemployment problems ?Science*
scapegoats a : one that bears the blame for others  b : one that is the object of irrational hostility
misperceptions 错误理解 误解，曲解
inflation   a continuing rise in the general price level usually attributed to an increase in the volume of money and credit relative to available goods and services  通货膨胀
arm's-length market not found
decile any one of nine numbers that divide a frequency distribution into 10 classes such that each contains the same number of individuals;
perceive  to attain awareness or understanding of
post-meltdown NOT FOUND 后经济崩溃时期？
perverse  a : turned away from what is right or good  : CORRUPT  b : IMPROPER, INCORRECT  c : contrary to the evidence or the direction of the judge on a point of law  *perverse verdict*
incentives  something that incites or has a tendency to incite to determination or action
transactions  something transacted;  especially   : an exchange or transfer of goods, services, or funds  *electronic transactions*
inevitable  incapable of being avoided or evaded  *an inevitable outcome*
subprime NOT SURE 次级的
domino  a member of a group (as of nations) expected to behave in accordance with the domino theory
topple  to cause to fall /  OVERTHROW *topple a dictator*  /   DEFEAT
Panglossian  marked by the view that all is for the best in this best of possible worlds  : excessively optimistic
metric  a standard of measurement  *no metric exists that can be applied directly to happiness ?Scientific Monthly*
subsidise to aid or promote (as a private enterprise) with public money  *subsidize soybean farmers*  *subsidize public transportation*
meek enduring injury with patience and without resentment  : MILD
outrageously going beyond all standards of what is right or decent  *an outrageous disregard of human rights*
practices   actual performance or application  *ready to carry out in practice what they advocated in principle*  (在这里指实践操作？？)
catering  to supply what is required or desired  *catering to middle-class tastes*
appropriation  something that has been appropriated;  specifically   : money set aside by formal action for a specific use（挪用公款）
out of pocket 赔钱
illuminate to make illustrious or resplendent
outliers a person whose residence and place of business are at a distance
sins an offense against religious or moral law,    an often serious shortcoming
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COMMENTS
This debate is a discussion on executive pay. The proposer mainly gives three illustrations to correct his so called “misperception” on executive pay. By relating to other highly paid groups and providing the income status of executives, stated at the first, the proposer believe that executives gain their income based on their performance. Furthermore, he argues that the income is also related to the stock performance by analyzing the realized pay of executives. Additionally, he insists that it is the boards that control their executives. Contrarily, the opposer holds the point that the pay-performance practice is not grounded. She cites lots of examples (anecdotes as she mentioned) to support this very point.

The material provide only includes the opening speeches of both sides so that it is hard to find collisions on their specific supporting. However, the main and probably the only clash is on the pay –performance link. The proposer believes the link is concrete since the executive pay has being decreased and lots unqualified executives have lost their jobs for their lousy performance under the meltdown situations. The opposer does catch the fallacy that it is not because of the link that the income is decreasing and the unemployment of executives is growing. It is the economic situation itself that pick those who are qualified executives to survive and because it is melting down, the income is decreasing. That is to say, the theory of pay-performance link is not grounded. Unfortunately, the oppeser stop her rebuttal by merely cites some examples. Without further deduction, it is hard to make her perspective cogent. Personally, I am looking forward to seeing what the opposition side would say in its illustration.

lilylove0624UID: 2720394

Executive pay

This house believes that on the whole, senior executives are worth what they are paid


About this debate

Over the past few decades executive pay has risen dramatically. Bosses who were once paid ten times as much as shopfloor workers are now sometimes paid as much as 300 times as much. This trend was never popular, even during good times. But today it is becoming radioactive, as governments step in to rescue failing companies and ordinary people are forced to tighten their belts.
radioactive的这个用法第一此见
Is the anger justified? Some argue that executive pay is a long-standing disgrace. Pay is often not tethered to performance. Huge rewards for the few demotivate the rest of the workforce. Others are more sanguine. Successful executives, such as Jack Welch, former CEO of General Electric, can add hugely to a firm's profitability, benefiting workers, managers and shareholders alike. The growing pay of executives has to be balanced against the growing difficulty of their jobs, particularly as turnover in the boardroom increases.
这句不太理解 特别是当会议室里人员频繁的更迭？
Opening statements

Defending the motion

Steven N. Kaplan Neubauer Family Prof. of Entrepreneurship & Finance, University of Chicago Booth School of Business

In the United States, the United Kingdom and elsewhere, CEOs are routinely criticised for being overpaid.

Against the motion

Nell  Minow Editor and Co-founder, The Corporate Library

Excessive executive compensation of the past decade is both a symptom and a cause of the current economic mess.

The moderator's opening remarks

Oct 20th 2009 |   Adrian  Wooldridge

Oneof the few things that anti-globalisation campaigners and stockmarketinvestors agree upon is that executive pay is out of control.
It is not hard to understand this shared outrage: executive pay has exploded since the 1980s. For most of the postwar era executives earned a few multiples of the median pay. But thereafter, starting in America and slowly spreading to the rest of the world, the multiples increased exponentially. Today many American workers earn in a year what their boss takes home in an evening.
Isn't this a disgrace? Critics of executive pay worry that even mediocre bosses are given outsized rewards. Robert Nardelli received a $20m pay-off when he left Home Depot even though the share price had fallen during his six-year tenure. Carly Fiorina was $180m better off when she left Hewlett-Packard despite a lacklustre tenure. Defenders of executive pay argue that great bosses such as Louis Gerstner, the former boss of IBM, and Jack Welch, the former boss of General Electric, are worth every penny because they create huge amounts of wealth for both share holders and employees.
The debate about executive pay, though never cool, is particularly hot at the moment. Workers have been squeezed by there cession. Unemployment is approaching 10% in the United States and much higher numbers in many other countries. Numerous governments are planning to deal with their rising deficits by freezing public-sector pay. And yet many bosses and bankers continue to make out like bandits—or so lots of people think.
We are lucky to have two of the best people in the business to debate this subject. Steven Kaplan, who proposes the motion, teaches at the University of Chicago's Booth School of Business. Nell Minow, who opposes it, is a long-time shareholder activist and chairwoman of the Corporate Library, are Search Company. (For people who want to know more about her she is also the subject of a profile in a recent issue of the New Yorker.)
Mr Kaplan starts off by making two fundamental points. CEO pay has not gone up in recent years; indeed, it has been dropping since 2000, particularly in relation to other well-paid groups, such as hedge fund 对冲基金managers, lawyers, consultants and professional athletes. Nor is CEO pay unrelated to performance. Boards are increasingly willing to fire CEOs for poor performance.
Ms Minow focuses heavily on the relationship between pay and the recent credit crunch信用恐慌. She points out that executive pay helped to create the mess in the first place: Countrywide's CEO, Angelo Mozillo, made more than $550m during his time in office. She also points out that the fact that many companies that were bailed out by the government continue to pay their CEOs huge salaries and bonuses is damaging the credibility of the system.
Such bold opening statements raise questions galore. Is Mr. Kaplan justified in starting his account in 2000 rather than 1980, when executive pay exploded? And is Ms Minow right to concentrate so heavily on the financial sector? These are only a couple of the questions that we need to thrash out in the coming days.
虽然引用了这两个例子 但有继续发散性的思考 提出问题

The proposer's opening remarks
Oct 20th 2009 |   Steven N. Kaplan

In the United States, the United Kingdom and elsewhere, CEOs are routinely criticised for being overpaid. Critics argue that boards do not respond to market forces, but, instead, are dominated by or are over-generous to their CEOs. Boards are criticised for not tying CEOs' pay to performance. These criticisms have been exacerbated by the financial crisis and the desire to find scapegoats.
I argue below that the critics are wrong and that there are many misperceptions of CEO pay. While CEO pay practices are not perfect, they are driven by market forces and performance. Contrary to public perception, CEO pay has not gone up in recent years. In fact, the average CEO pay (adjusted for inflation) has dropped since 2000, while the pay of other groups has increased substantially. Similarly, the view that CEOs are not paid for performance is wrong. In fact, the opposite is true and boards increasingly fire them for poor performance. And, most recently, consistent with market forces driving pay, the US and UK governments each hired a new CEO (of AIG and the Royal Bank of Scotland) for pay exceeding that of the median large company CEO.
It is useful to understand how CEO pay is measured. It includes three components: salary, bonus and stock-based pay. It is usually measured in two ways. The first is the sum of salary, bonus, restricted stock and the expected value of stock options. I call this expected pay. Expected pay measures what boards believe they awarded the CEO. This is the best measure of what a CEO is paid each year. Note 留意that the CEO does not actually walk away with this money. The second measure replaces expected stock option values with values actually realized and realized pay measures what CEOs walk away with.
The first graph shows average and median expected CEO pay for S&P 500 CEOs since 1994 (adjusted for inflation). It shows that median CEO pay has been stable since 2001; it has not increased. And average pay has declined substantially. In fact, average CEO pay in2008 is below the average in 1998.


While average CEO pay has declined, the pay of other highly paid groups has increased. The second graph shows S&P 500 CEO pay relative to the income of the top 1% of US taxpayers. Relative to those other groups, CEOs are no better off in 2008 than in 1994. Strikingly醒目的, relative CEO pay is a half of what it was in 2001, a huge decline.


Which are those groups that have earned increasingly high compensation? Hedge fund, private equity and venture capital investors have increased their assets and fees substantially, translating into high pay. By one estimate, the top three hedge fund managers earned more in 2007 than all 500 S&P 500 CEOs combined. Professional athletes, investment bankers, consultants and lawyers also have benefited greatly. For example, from 2004 to 2008, the inflation-adjusted pay of partners at the top 20 law firms increased by 12% while that of S&P 500 CEOs dropped 12%. Those law firms had over 3,000 partners making an average of $2.4m each.
One can look at the Obama administration for other examples. Larry Summers made $8m (more than the median S&P 500 CEO) giving speeches and working part-time for a hedge fund. Eric Holder made $3.5m as a law partner. 好羡慕。。
So, while CEOs earn a lot, they are not unique. The pay of people in the other groups has undoubtedly been driven by market forces; all are compensated in arm's-length markets, not by cronies. Technology, globalisation and scale appear to have increased the market value of these groups. CEOs have not done better and, by some measures, have done worse. Those who argue CEOs are overpaid have to explain how CEOs can be overpaid and not subject to market forces, when the other groups are paid at least as well and are subject to market forces.
Why is the pay of these other groups relevant for CEOs? Top executives regularly leave to work for private equity firms and hedge funds. Law partners and consultants leave to work for public companies as general counsels and executives. Relative pay matters and all these groups are paid according to market demand. Markets are the driving force for senior executives in all these industries and talented people jump across industries, based on market perceptions of their worth.
Critics also argue that CEO pay is not tied to stock performance. Again, that is not true. Looking at what CEOs actually receive—realized pay—Josh Rauh and I found that firms with CEOs in the top decile of realised pay earned stock returns 90%above those of other firms in their industries over the previous five years. Firms with CEOs in the bottom decile of realised pay underperformed by almost 40%. The typical CEO is paid for performance.
This was reinforced in 2008, when average realised CEO pay declined by 25%(according to S&P's Execucomp). And Equilar, another provider of CEO pay data, estimated that the typical CEO experienced a net worth 净值decline of over 40%.
The final myth to bust is that CEOs control their boards and earn high pay through this control and not performance. In fact, CEO tenure has declined, from ten years in the1970s to six years today, and boards have got tougher on their executives when they do not perform.
In sum, market forces govern CEO compensation. CEOs are paid what they are worth. Talented individuals, who are perceived to be valuable, can move between industries to be compensated well. The clearest example of this is that even governments have to pay highly for talented executives. Recently, the Royal Bank of Scotland (under UK government control) hired a CEO with a package worth up to $16m; AIG (under US government control)hired a CEO with a package worth up to $10.5m. For these critical jobs, both of these executives received compensation exceeding the pay of the median S&P 500 CEO.


The opposition's opening remarks
Oct 20th 2009 | Nell  Minow

Excessive executive compensation of the past decade is both a symptom and a cause of the current economic mess. And the post-meltdown awards are all but guaranteed to continue to create perverse incentives that will reward management and further damage the interests of shareholders and every other participant in the economy.
Incentive compensation rewarded executives for the quantity of transactions rather than the quality of transactions. It inevitably led to failures like the subprime disaster and the dominoes it toppled as it took the economy down with it. Worst of all, the avalanche of post-bailout bonuses and departure packages like the $53m Ken Lewis got from Bank of America have severely damaged the credibility of Wall Street and the American financial markets as a whole. The billions of dollars of losses do not come close to the reputational hit to American capitalism, which will increase the cost of capital for all US companies.
Panglossian observers will always be able to find some metric to justify any level of pay. But the results speak for themselves. The decisions that led to the melt down were made by executives who knew that they would be paid tens, even hundreds of millions of dollars no matter how successful the consequences of those decisions.
Let us look at ground zero of the subprime mess？, Countrywide, where Angelo Mozilo made more than$550m during his time as CEO. When the compensation committee tried to object to his pay levels, he hired another compensation consultant, paid for by the shareholders, to push them into giving him more. Heal so pushed for, ？and was given, shareholder subsidies, not just for his wife's travel on the corporate jet but for the taxes on the imputed income from that travel. Instead of telling Mr Mozilo that he had no business asking the shareholders to subsidize his taxes, the board meekly signed off on it, making it clear to everyone in the executive suite that the pay-performance link was not a priority.
By the end of 2007, when Countrywide finally revealed the losses it had previously obscured, shareholders lost more than 78% of their investment value. Meanwhile, in early 2007 Mr Mozilo sold over $127m in exercised stock options before July 24th 2007, when he announced a $388m write-down on profits. Before the bailout, Countrywide narrowly avoided bankruptcy by taking out an emergency loan of $11 billion from a group of banks. Mr Mozilo continued to sell off shares, and by the end of 2007 he had sold an additional $30m in exercised stock options. There is the definition of outrageously excessive compensation.
Countrywide responded to a shareholder proposal that year asking for a non-binding advisory vote on its pay plan by urging shareholders to oppose it because "Countrywide has been an outstanding performer" and because" The Board's Compensation Committee has access to the best information on compensation practices and has a thorough process in place to determine appropriate executive pay." They could hardly have done worse. And it is likely that some market feedback on the structure of the pay plan could have given compensation committee members Harley W.Snyder (chair), Robert J. Donato, Michael E. Dougherty and Oscar P.Robertson worthwhile guidance.
Michelle Leder of the indispensable Footnoted.org website discovered that Frank A. Keating, Charles T. Maxwell and Frederick B. Whitte more, the compensation committee at Chesapeake Energy, not only paid the CEO, Aubrey McClendon, $100m, a 500% increase as the stock dropped 60% and the profits went down 50%, they spent $4.6m of the shareholders' money to sponsor a basketball team of which Mr McClendon owns a 19% stake, they purchased catering services from a restaurant which he owns just under a half of, and they took his collection of antique maps off his hands for $12.1m of the shareholders' money, based on a valuation from the consultant who advised Mr McClendon on assembling the collection. The board justified this by referring to Mr McClendon's having to sell more than $1 billion worth of stock due to margin calls, his having concluded four important deals and the benefit to employee morale from having the maps on display in the office. A market-based response would be: (1) that was his risk and it is inappropriate to the point of misappropriation to force the other shareholders, already substantially out of pocket with their own losses due to his poor leadership of the organisation, make up for his losses (2) if the deals are good ones, he will be adequately rewarded when the benefit of those deals is reflected in the stock price; and (3) you have got to be kidding. if this is pay for performance, what exactly is the performance we are paying for?

反问 增强语气可信度

margin calls
【经】 追加保证金的通知
These may be anecdotes, but they are illuminating ones. The numbers and details may be at the extreme, but the underlying approaches are representative. Even as outliers, they still demonstrate the failure of the system to ensure a vigorous, arm's-length system for determining pay and the inability of the system to require an effective incentive programme with a genuine downside as well as an upside.
In my comments, I will discuss the seven deadliest sins of executive compensation, the two key elements that are essential for any plan that merits support from investors and the only metric that matters in looking at pay.

tequilawineUID: 2702008

lilylove0624(小小)
The growing pay of executives has to be balanced against the growing difficulty of their jobs, particularly as turnover in the boardroom increases.
这句不太理解 特别是当会议室里人员频繁的更迭？
这句话的意思是说，CEO们的薪酬一定要能弥补他们逐渐增加的工作难度，和在股票市场上营业额的增长。

fancywwUID: 2583671

Mr Kaplan's argument:
View 1:
Contrary to public perception, CEO pay has not gone up in recent years. In fact, the average CEO pay (adjusted for inflation) has dropped since 2000, while the pay of other groups hasincreased substantially.
Fact 1: It is useful to
understand how CEO pay is measured.
Fact 2:While
average CEO pay has declined, the pay of other highly paid groups has
increased.
Complements: Why is the pay of these other groups relevant for CEOs?
View 2:
Critics also argue that CEO pay is not tied to stock performance. Again, that is not true.


Ms Minow's arguments:
Incentive compensation rewarded executives for the quantity of transactions rather than the quality of transactions.
Example 1: Let us look at ground zero of the subprime mess, Countrywide, where Angelo Mozilo made more than $550m during his time as CEO.
Example 2: the CEO, Aubrey
McClendon





My comments:
what a wonderful and exciting debate. The both sides give reasonable and seemingly convincing data or analysis of facts, which almost make me confused.

Mr Kaplan mainly focuses on the general situation. His argument is derived from the two opposing reasons. He firstly refutes the saying that executives are over paid with data and facts. Compared with itself, CEO pay has not gone up in recent year. And compared with other highly paid groups, the CEO pay has gone through a huge decline. Then he emphasized why CEO pay is relevant with other groups. This explanation justifies his comparison between CEO and other highly paid groups. So he concluded that technology, globalisation and scale appear to have increased the market value of these groups. CEOs have not done better and, by some measures, have done worse. Secondly, Mr kaplan refutes the opposing view that CEO pay is not tied to stock performance. Based on his observation,  the typical CEO is paid for performance. And he also denies that CEOs control their boards and earn high pay through this control and not performance.

Throughout Mr Kaplan's arguments, he incisively defends his position by fighting back the opposing views. But he does not stop at this. He furthers his argument by with some explanations of the doubts people may have. Although I do not understand the data and graph very well, I think he does a quite persuasive job.

About Ms Minow's argumentation, she mainly uses two extreme and representative examples. But she indicated that there are much more evidence like this. In the two examples, she also focuses on two points: how the CEO pay is decided, and whether the CEO pay is decided by their performance.In the two examples, the behaviour of the two CEOs and the compensation commettees is really quite inappropriate or even misappropriate . Anyway, to make her argument more convincing, I'm looking forward to read her comments on the seven deadliest sins of executive compensation.




Vocabulary and Useful expressions
Tether: to fasten or restrain by or as if by a tether
Bandit: an outlaw who lives by plunder;  
hedge fund
managers:
Crunch: [n] a tight or critical situation: as  
a : a critical point in the buildup of pressure between opposing elements  : SHOWDOWN  b : a severe economic squeeze (as on credit)  c : SHORTAGE  
Bail out: 1 : to parachute from an aircraft
         2 : to abandon a harmful or difficult situation;  also   : LEAVE, DEPART
Galore:  ABUNDANT, PLENTIFUL;  used postpositively
Thrash:1 : to separate the seeds of from the husks and straw by beating  : THRESH
2 a : to beat soundly with or as if with a stick or whip  : FLOG  b : to defeat decisively or severely  *thrashed the visiting team*
3 : to swing, beat, or strike in the manner of a rapidly moving flail  *thrashing his arms*
4 a : to go over again and again  *thrash the matter over inconclusively*  b :
the subprime disaster:次贷危机



I argue below that...
Note that...

emteddybearUID: 2699606

再读一遍
The proposer's opening remarks
Oct 20th 2009 |   Steven N. Kaplan

In the United States, the United Kingdom and elsewhere, CEOs are routinely criticised for being overpaid. Critics argue that boards do not respond to market forces, but, instead, are dominated by or are over-generous to their CEOs. Boards are criticised for not tying CEOs' pay to performance. These criticisms have been exacerbated by the financial crisis and the desire to find scapegoats.
I argue below that the critics are wrong and that there are many misperceptions of CEO pay.While CEO pay practices are not perfect, they are driven by market forces and performance. Contrary to public perception, CEO pay has not gone up in recent years. In fact, the average CEO pay (adjusted forinflation) has dropped since 2000, while the pay of other groups has increased substantially. Similarly, the view that CEOs are not paid for performance is wrong. In fact, the opposite is true and boards increasingly fire them for poor performance. And, most recently,consistent with market forces driving pay, the US and UK government seach hired a new CEO (of AIG and the Royal Bank of Scotland) for pay exceeding that of the median large company CEO.(Last two paragraphs are just the begining of the Issue, tell us the main idea of this exposition: the CEO pay has not gone up in recent year, while the pay of other high-paid groups has increased substantially.)


It is useful to understand how CEO pay is measured.（thesis） It includes three components:salary, bonus and stock-based pay. It is usually measured in two ways.The first is the sum of salary, bonus, restricted stock and the expected value of stock options. I call this expected pay. Expected pay measures what boards believe they awarded the CEO. This is the best measure of what a CEO is paid each year. Note that the CEO does not actually walk away with this money. The second measure replaces expected stock option values with values actually realized and realised pay measures what CEOs walk away with.
The first graph shows average and median expected CEO pay for S&P 500 CEOs since 1994 (adjusted for inflation). It shows that median CEO pay has been stable since 2001; it has not increased. Andaverage pay has declined substantially. In fact, average CEO pay in 2008 is below the average in 1998.


While average CEO pay has declined, the pay of other highly paid groups has increased. The second graph shows S&P 500 CEO pay relative to the income of the top 1% of US taxpayers. Relative to those other groups,CEOs are no better off in 2008 than in 1994. Strikingly, relative CEO pay is a half of what it was in 2001, a huge decline.

To use graphs to support "the decline of the CEO pay"
Which are those groups that have earned increasingly high compensation?(this question sentence leads to the explain "other groups"Hedge fund, private equity and venture capital investors have increased their assets and fees substantially translating into high pay. By one estimate, the top three hedge fund managers earned more in 2007 than all 500 S&P 500 CEOs combined. Professional athletes, investment bankers, consultants and lawyers also have benefited greatly. For example, from 2004 to 2008, the inflation-adjusted pay of partners atthe top 20 law firms increased by 12% while that of S&P 500 CEOsdropped 12%. Those law firms had over 3,000 partners making an averageof $2.4m each.
One can look at the Obama administration for other examples. Larry Summers made $8m (more than the median S&P 500 CEO)giving speeches and working part-time for a hedge fund. Eric Holdermade $3.5m as a law partner.
So, while CEOs earn a lot, they are not unique. The pay of people in the other groups has undoubtedly been driven by market forces; all are compensated in arm's-length markets,not by cronies. Technology, globalisation and scale appear to have increased the market value of these groups. CEOs have not done better and, by some measures, have done worse. Those who argue CEOs are overpaid have to explain how CEOs can be overpaid and not subject to market forces, when the other groups are paid at least as well and aresubject to market forces.
Why is the pay of these other groups relevant for CEOs? Top executives regularly leave to work for private equity firms and hedge funds. Law partners and consultants leave to work for public companies as general counsels and executives. Relativepay matters and all these groups are paid according to market demand.Markets are the driving force for senior executives in all these industries and talented people jump across industries, based on market perceptions of their worth.

another sense group
Critics also argue that CEO pay is not tied to stock performance. Again, that is not true. Looking at what CEOs actually receive—realised pay—Josh Rauh and I found that firms with CEOs in the top decile of realised pay earned stock returns 90%above those of other firms in their industries over the previous five years. Firms with CEOs in the bottom decile of realised pay underperformed by almost 40%. The typical CEO is paid for performance.
This was reinforced in 2008, when average realised CEO pay declined by 25%(according to S&P's Execucomp). And Equilar, another provider of CEO pay data, estimated that the typical CEO experienced a net worth decline of over 40%.
The final myth to bust is that CEOs control their boards and earn high pay through this control and not performance. In fact, CEO tenure has declined, from ten years in the 1970s to six years today, and boards have got tougher on their executives when they do not perform.
In sum, market forces govern CEO compensation. CEOs are paid what they are worth. Talented individuals, who are perceived to be valuable, can move between industries to be compensated well. The clearest example of this is that even governments have to pay highly for talented executives. Recently,the Royal Bank of Scotland (under UK government control) hired a CEO with a package worth up to $16m; AIG (under US government control)hired a CEO with a package worth up to $10.5m. For these critical jobs,both of these executives received compensation exceeding the pay of the median S&P 500 CEO.

My comments: I think if this issue is the response of AW, it must be 6 scored. Firstly, the structure is just simple, and easyly understood. After giving the main idea, Mr Kaplan gives us the description of the CEO pay. This method is the so-called Terminology in 追星剑特训. And the speaker gives us two graphs to tell us why he proposes that the CEO pay has declined recent year. This is a good method, but we can't use it in our AW. After that, is the main comments, the language is so wonderfull that I want to recite it.

prettywraithUID: 197049

Comments (2009-12-23,24):
From this debate and its comments, I have learned so much. Especially Steven’s and Nell’s remarks, both them provide solid contents, logical reasoning, effective evidence, and forceful examples. If they write Analytical Writing (AW) like this, ETS would give them score 6. Moreover, numerous written techniques arguing with other are very useful for preparing AW test, though there are some terminologies obscuring me. But these remarks are not perfect in my eyes. Next, I will reveal several flaws in their remarks.

How many salaries paying for executives are reasonable? This is a headache problem in every country. For American company, both Steven and Nell express their standpoints. As proposer, Steven has provided a number of data and evidence to support his assertion. But I still have some questions for his statements. Firstly, Steven insists CEO pay has not gone up in recent years. If it is true, then why CEO pay increases from ten times to 300 times worker’s pay. Secondly, he believes CEO pay is always related to performance. But, why several financial institutions paid more money for their executives, which are suffering from subprime disaster and have to beg for government’s capital injection. Therefore, Nell shows two extended examples to contradict Steven’s assertion. But, Nell did not give us more related data to strengthen her statement and she did not take against Steven’s first statement. Maybe, actually, Nell also think CEO pay has not increase in decades.

Good sentences:
But thereafter, starting in America and slowly spreading to the rest of the world, the multiples increased exponentially. 简洁的表达“指数增加”这一含义

While CEO pay practices are not perfect, they are driven by market forces and performance. 用词比较简练

These may be anecdotes, but they are illuminating ones. The numbers and details may be at the extreme, but the underlying approaches are representative.
这话完全可以改改用到自己文章里。

番茄斗斗UID: 2720914

好词-结构-生词-表达

Executive pay

This house believes that on the whole, senior executives are worth what they are paid


About this debate

Over the past few decades executive pay has risen dramatically. Bosseswho were once paid ten times as much as shopfloor workers are nowsometimes paid as much as 300 times as much. This trend was neverpopular, even during good times. But today it is becoming radioactive(辐射的),as governments step in to rescue failing companies and ordinary peopleare forced to tighten their belts.

Is the anger justified? Some argue that executive pay is along-standing disgrace. Pay is often not tethered(系链) to performance. Hugerewards for the few demotivate(失去动力) the rest of the workforce. Others aremore sanguine(乐观). Successful executives, such as Jack Welch, former CEO ofGeneral Electric, can add hugely to a firm's profitability, benefitingworkers, managers and shareholders alike. The growing pay of executiveshas to be balanced against the growing difficulty of their jobs,particularly as turnover(营业额) in the boardroom increases.

Opening statements

Defending the motion

Steven N. Kaplan Neubauer Family Prof. of Entrepreneurship & Finance, University of Chicago Booth School of Business

In the United States, the United Kingdom and elsewhere, CEOs are routinely criticised for being overpaid.

Against the motion

Nell  Minow  Editor and Co-founder, The Corporate Library

Excessive executive compensation of the past decade is both a symptom and a cause of the current economic mess.

The moderator's opening remarks

Oct 20th 2009 |   Adrian  Wooldridge

One of the few things that anti-globalisation campaigners andstockmarket investors agree upon is that executive pay is out of control.
Itis not hard to understand this shared outrage: executive payhas exploded since the 1980s. For most of the postwar era executivesearned a few multiples of the median pay. But thereafter, starting inAmerica and slowly spreading to the rest of the world, the multiplesincreased exponentially. Today many American workers earn in a year whattheirboss takes home in an evening.
Isn't this a disgrace? Critics ofexecutive pay worry that even mediocrebosses are given outsized rewards. Robert Nardelli received a $20mpay-off when he left HomeDepot even though the share price had fallenduring his six-yeartenure. Carly Fiorina was $180m better off when sheleftHewlett-Packard despite a lacklustre tenure(任期). Defenders of executivepay argue that great bosses such as Louis Gerstner, the former boss ofIBM,and Jack Welch, the former boss of General Electric, are worthevery penny because they create huge amounts of wealth for bothshareholdersand employees.
The debate about executive pay, though never cool,is particularly hotat the moment. Workers have been squeezed by the recession. Unemploymentis approaching 10% in the United States and much higher numbers in manyother countries. Numerous governments are planning to deal with theirrising deficits by freezing public-sector pay. And yet many bosses andbankers continue to make out like bandits—or so lots of people think.
We are lucky to have two ofthe best people in the business to debatethis subject. Steven Kaplan,who proposes the motion, teaches at theUniversity of Chicago's BoothSchool of Business. Nell Minow, whoopposes it, is a long-time shareholder activist and chairwoman of theCorporate Library, are search company. (For people who want to know moreabout her she is also the subject of a profile in a recent issue of the New Yorker.)
MrKaplan starts off by making two fundamental points. CEO pay hasnot gone up in recent years; indeed, it has been dropping since2000,particularly in relation to other well-paid groups, such as hedgefundmanagers, lawyers, consultants and professional athletes. Nor isCEOpay unrelated to performance. Boards are increasingly willing tofireCEOs for poor performance.
Ms Minow focuses heavily on the relationship between pay and the recentcredit crunch（困境）. She points out that executive pay helped to create themess in the first place:Countrywide's CEO, Angelo Mozillo, made morethan $550m during his timein office（在职期）. She also points out that the factthat many companies that were bailed out by the government continue topay their CEOs huge salaries and bonuses is damaging the credibility ofthe system.
Suchbold opening statements raise questions galore（很多。用于名词之后）. Is Mr Kaplanjustified in starting his account in 2000 rather than 1980, whenexecutive pay exploded. And is Ms Minow right to concentrate so heavilyon the financial sector? These are only a couple of the questions thatwe need to thrash out（反复讨论） in the coming days.


The proposer's opening remarks
Oct 20th 2009 |   Steven N. Kaplan

In the United States, the United Kingdom and elsewhere, CEOs areroutinely criticised for being overpaid. Critics argue that boards donot respond to market forces, but, instead, are dominated by or areover-generous to their CEOs. Boards are criticised for not tying CEOs'pay to performance. These criticisms have been exacerbated by thefinancialcrisis and the desire to find scapegoats.
I argue below that the critics are wrong and that there are manymisperceptions of CEO pay.While CEO pay practices are not perfect, theyare driven by market forces and performance. Contrary to publicperception, CEO pay has not gone up in recent years. In fact, theaverage CEO pay (adjusted forinflation) has dropped since 2000, whilethe pay of other groups hasincreased substantially. Similarly, the viewthat CEOs are not paid for performance is wrong. In fact, the oppositeis true and board sincreasingly fire them for poor performance. And,most recently,consistent with market forces driving pay, the US and UKgovernmentseach hired a new CEO (of AIG and the Royal Bank of Scotland)for pay exceeding that of the median large company CEO.
It is useful to understand how CEO pay is measured. It includes threecomponents:salary, bonus and stock-based pay. It is usually measured intwo ways.The first is the sum of salary, bonus, restricted stock andthe expected value of stock options. I call this expected pay. Expectedpay measures what boards believe they awarded the CEO. This is thebest measure of what a CEO is paid each year. Note that the CEO doesnot actually walk away with this money. The second measurereplaces expected stock option values with values actually realized andrealised pay measures what CEOs walk away with.
The first graph shows average and median expected CEO pay forS&P500 CEOs since 1994 (adjusted for inflation). It shows thatmedian CEOpay has been stable since 2001; it has not increased. Andaverage payhas declined substantially. In fact, average CEO pay in2008 is belowthe average in 1998.


Whileaverage CEO pay has declined, the pay of other highly paid groupshasincreased. The second graph shows S&P 500 CEO pay relative totheincome of the top 1% of US taxpayers. Relative to those othergroups,CEOs are no better off in 2008 than in 1994. Strikingly,relative CEOpay is a half of what it was in 2001, a huge decline.


Which are those groups that have earned increasingly high compensation?Hedgefund, private equity and venture capital investors have increasedtheir assets and fees substantially, translating into high pay. Byone estimate, the top three hedge fund managers earned more in 2007thanall 500 S&P 500 CEOs combined. Professional athletes,investmentbankers, consultants and lawyers also have benefited greatly.For example, from 2004 to 2008, the inflation-adjusted pay of partnersatthe top 20 law firms increased by 12% while that of S&P 500CEOsdropped 12%. Those law firms had over 3,000 partners making anaverageof $2.4m each.
One can look at the Obama administration for other examples. LarrySummers made $8m (more than the median S&P 500 CEO)giving speechesand working part-time for a hedge fund. Eric Holdermade $3.5m as a lawpartner.
So, while CEOs earn a lot, they are not unique. The pay of people in theother groups has undoubtedly been driven by market forces; all arecompensated in arm's-length markets（A financial market in which parties engaging in transactions are separate and have no contact with each other outside of the buying and selling of securities. In the case of the stock market, most investors will never know from whom they are buying securities or to whom they are selling them.）,not by cronies（密友）. Technology,globalisation and scale appear to have increased the market value ofthese groups. CEOs have not done better and, by some measures, have doneworse. Those who argue CEOs are overpaid have to explain how CEOs can beoverpaid and not subject to market forces, when the other groups arepaid at least as well and are subject to market forces.
Why is the pay of these other groups relevant for CEOs? Top executivesregularly leave to work for private equity firms and hedge funds. Lawpartners and consultants leave to work for public companies as generalcounsels and executives. Relative pay matters and all these groups arepaid according to market demand.Markets are the driving force forsenior executives in all these industries and talented people jumpacross industries, based on market perceptions of their worth.
Critics also argue that CEO pay is not tied to stock performance. Again,that is not true. Looking at what CEOs actually receive—realisedpay—Josh Rauh and I found that firmswith CEOs in the top decile ofrealised pay earned stock returns 90%above those of other firms intheir industries over the previous fiveyears. Firms with CEOs in thebottom decile of realised pay under performed by almost 40%. The typicalCEO is paid for performance.
This was reinforced in 2008, when average realised CEO pay declined by25%(according to S&P's Execucomp). And Equilar, another providerof CEO pay data, estimated that the typical CEO experienced a networthdecline of over 40%.
The final myth to bust（砸碎） is that CEOs control their boards and earn highpay through this control and notperformance. In fact, CEO tenure hasdeclined, from ten years in the1970s to six years today, and boardshave got tougher on their executives when they do not perform.
In sum, market forces govern CEO compensation. CEOs are paid what theyare worth. Talented individuals, who are perceived to be valuable, canmove between industries to be compensated well. The clearest example ofthis is that even governments have to pay highly for talentedexecutives. Recently,the Royal Bank of Scotland (under UK governmentcontrol) hired a CEOwith a package worth up to $16m; AIG (under USgovernment control)hired a CEO with a package worth up to $10.5m. Forthese critical jobs,both of these executives received compensationexceeding the pay of themedian S&P 500 CEO.


The opposition's opening remarks
Oct 20th 2009 |  Nell  Minow

Excessive executive compensation of the past decade is both a symptomand a cause of the current economic mess. And the post-meltdown awardsare all but guaranteed to continue to create perverse（任性的） incentives thatwill reward management and further damage the interests of shareholdersand everyother participant in the economy.
Incentive compensation rewarded executives for the quantity oftransactions rather than the quality of transactions. It inevitably ledto failures like the subprime disaster and the dominoes it toppled as ittook the economy down with it. Worstof all, the avalanche ofpost-bailout bonuses and departure packageslike the $53m Ken Lewis gotfrom Bank of America have severely damaged the credibility of WallStreet and the American financial markets as awhole. The billions ofdollars of losses do not come close to the reputational hit to Americancapitalism, which will increase the costof capital for all US companies.
Panglossian（乐观） observers will always be able to find some metric to justifyany level of pay. But the results speak for themselves. The decisionsthat led to the meltdown were made by executives who knew that theywould be paid tens, even hundreds of millions of dollars no matter howsuccessful the consequences of those decisions.
Let us look at ground zero（起点） of the subprime mess, Countrywide, whereAngelo Mozilo made more than$550m during his time as CEO. When thecompensation committee tried to object to his pay levels, he hiredanother compensation consultant,paid for by the shareholders, to pushthem into giving him more. He also pushed for, and was given,shareholder subsidies, not just for his wife's travel on the corporatejet but for the taxes on the imputed income from that travel. Instead oftelling Mr Mozilo that he had no business asking the shareholders tosubsidise his taxes, the boardmeekly signed off（正式认可某件事的开始执行） on it, making it clearto everyone in the executivesuite that the pay-performance link was nota priority.
By the end of 2007, when Countrywide finally revealed the losses ithad previously obscured, shareholders lost more than 78% oftheir investment value. Meanwhile, in early 2007 Mr Mozilo sold over$127m in exercised stock options before July 24th 2007, when heannounced a$388m write-down on profits. Before the bailout, Countrywidenarrowly avoided bankruptcy by taking out an emergency loan of $11billion froma group of banks. Mr Mozilo continued to sell off shares,and by the end of 2007 he had sold an additional $30m in exercised stockoptions.There is the definition of outrageously excessive compensation.
Countrywide responded to a shareholder proposal that year asking for anon-binding advisory vote on its pay plan by urging shareholders tooppose it because "Countrywide has been an outstanding performer" andbecause"The Board's Compensation Committee has access to the bestinformationon compensation practices and has a thorough process inplace to determine appropriate executive pay." They could hardly havedon worse. And it is likely that some market feedback on the structureofthe pay plan could have given compensation committee members HarleyW.Snyder (chair), Robert J. Donato, Michael E. Dougherty and OscarP.Robertson worthwhile guidance.
Michelle Leder of theindispensable Footnoted.org website discoveredthat Frank A. Keating,Charles T. Maxwell and Frederick B. Whittemore,the compensationcommittee at Chesapeake Energy, not only paid the CEO,AubreyMcClendon, $100m, a 500% increase as the stock dropped 60% andthe profits went down 50%, they spent $4.6m of the shareholders' moneyto sponsor a basketball team of which Mr McClendon owns a 19% stake,they purchased catering services from a restaurant which he owns justundera half of, and they took his collection of antique maps off hishands for $12.1m of the shareholders' money, based on a valuation fromthe consultant who advised Mr McClendon on assembling the collection.The board justified this by referring to Mr McClendon's having to sellmore than $1 billion worth of stock due to margin calls, hishaving concluded four important deals and the benefit to employee moralefrom having the maps on display in the office. A market-based responsewould be: (1) that was his risk and it is inappropriate to the pointof misappropriation to force the other shareholders, alreadysubstantially out of pocket with their own losses due to his poorleadership of theorganisation, make up for his losses (2) if the dealsare good ones, he will be adequately rewarded when the benefit of thosedeals is reflected in the stock price; and (3) you have got to bekidding. If this is pay for performance, what exactly is the performancewe arepaying for?
These may be anecdotes, but they are illuminating ones. The numbers anddetails may be at the extreme, but the underlying approaches arerepresentative. Even as outliers, they still demonstrate the failure ofthe system to ensure a vigorous, arm's-length system for determining payand the inability of the system to require an effectiveincentiveprogramme with a genuine downside as well as an upside.
In my comments, I will discuss the seven deadliest sins ofexecutive compensation, the two key elements that are essential for anyplan that merits support from investors and the only metric that mattersin looking at pay.

COMMENT:
While Kaplan defends the motion, Minow vetos it. It's quite weird to declare that both of them make sense to their own idea, their focus is none the less, not alike.

Kaplan is keen on numerical analysis and presents us an all-rounded reasonsing. As he puts it, executive pay is unexpectedly contrary to the public perception and below other top job's pay. What allures us is top CEO's pay rather than the average ones. Meanwhile CEO do get fired, as boards is getting tougher; what determines the length of CEO'S tenure is his performance.

What Ms Minow pays attention to is huge leaving pay regardless an economic crisis and some extreme example of bandit alike CEO. She states what tortures the economic is indeed this kind of paying system.

Each of them justify for their ideas. I'd rather take my stand as well, which is combined with them two.
CEO, does deserve a well pay and their pay is related to the market price. As an chief exercutive manager, he's facing a much tougher pressure and great risk. What's more, what and how he performs is closely related to the development of company. Meanwhile, the huge leaving pay do make sense either, according the contract, board cannot fire its employee so easily, as a result ,leaving pay sometimes equal a month's pay or more. Failed as he was, he is worthy a legal leaving pay as well. In addition, a realized  regulation in paying system can avoid the extreme phenomenon as Ms Minow points out.

123runfordreamUID: 2697608

Executive pay

This house believes that on the whole, senior executives are worth what they are paid


About this debate

Over the past few decades executive pay has risen dramatically. Bosses who were once paid ten times as much as shopfloor workers are now sometimes paid as much as 300 times as much. This trend was never popular, even during good times. But today it is becoming radioactive, as governments step in to rescue failing companies and ordinary people are forced to tighten their belts.

Is the anger justified? Some argue that executive pay is a long-standing disgrace. Pay is often not tethered to performance. Huge rewards for the few demotivate the rest of the workforce. Others are more sanguine. Successful executives, such as Jack Welch, former CEO of General Electric, can add hugely to a firm's profitability, benefiting workers, managers and shareholders alike. The growing pay of executives has to be balanced against the growing difficulty of their jobs, particularly as turnover in the boardroom increases.

Opening statements

Defending the motion

Steven N. Kaplan Neubauer Family Prof. of Entrepreneurship & Finance, University of Chicago Booth School of Business

In the United States, the United Kingdom and elsewhere, CEOs are routinely criticised for being overpaid.

Against the motion

Nell  Minow Editor and Co-founder, The Corporate Library

Excessive executive compensation of the past decade is both a symptom and a cause of the current economic mess.

The moderator's opening remarks

Oct 20th 2009 |   Adrian  Wooldridge

Oneof the few things that anti-globalisation campaigners and stockmarketinvestors agree upon is that executive pay is out of control.
Itis not hard to understand this shared outrage: executive pay has exploded since the 1980s. For most of the postwar era executives earneda few multiples of the median pay. But thereafter, starting in America and slowly spreading to the rest of the world, the multiples increased exponentially. Today many American workers earn in a year what their boss takes home in an evening.
Isn't this a disgrace? Critics of executive pay worry that even mediocre bosses are given outsized rewards. Robert Nardelli received a $20m pay-off when he left HomeDepot even though the share price had fallen during his six-year tenure. Carly Fiorina was $180m better off when she left Hewlett-Packard despite a lacklustre tenure. Defenders of executive pay argue that great bosses such as Louis Gerstner, the former boss of IBM, and Jack Welch, the former boss of General Electric, are worth every penny because they create huge amounts of wealth for both shareholders and employees.
The debate about executive pay, though never cool, is particularly hot at the moment. Workers have been squeezed by the recession. Unemployment is approaching 10% in the United States and much higher numbers in many other countries. Numerous governments are planning to deal with their rising deficits by freezing public-sector pay. And yet many bosses and bankers continue to make out like bandits—or so lots of people think.
We are lucky to have two of the best people in the business to debate this subject. Steven Kaplan, who proposes the motion, teaches at the University of Chicago's Booth School of Business. Nell Minow, who opposes it, is a long-time shareholder activist and chairwoman of the Corporate Library, a research company. (For people who want to know more about her she is also the subject of a profile in a recent issue of the New Yorker.)
Mr Kaplan starts off by making two fundamental points. CEO pay has not gone up in recent years; indeed, it has been dropping since 2000, particularly in relation to other well-paid groups, such as hedge fund managers, lawyers, consultants and professional athletes. Nor is CEO pay unrelated to performance. Boards are increasingly willing to fire CEOs for poor performance.
Ms Minow focuses heavily on the relationship between pay and the recent credit crunch. She points out that executive pay helped to create the mess in the first place: Countrywide's CEO, Angelo Mozillo, made more than $550m during his time in office. She also points out that the fact that many companies that were bailed out by the government continue to pay their CEOs huge salaries and bonuses is damaging the credibility of the system.
Such bold opening statements raise questions galore. Is Mr Kaplan justified in starting his account in 2000 rather than 1980, when executive pay exploded. And is Ms Minow right to concentrate so heavily on the financial sector? These are only a couple of the questions that we need to thrash out in the coming days.


The proposer's opening remarks
Oct 20th 2009 |   Steven N. Kaplan

In the United States, the United Kingdom and elsewhere, CEOs are routinely criticised for being overpaid. Critics argue that boards do not respond to market forces, but, instead, are dominated by or are over-generous to their CEOs. Boards are criticised for not tying CEOs' pay to performance. These criticisms have been exacerbated by the financial crisis and the desire to find scapegoats.
I argue below that the critics are wrong and that there are many misperceptions of CEO pay. While CEO pay practices are not perfect, they are driven by market forces and performance. Contrary to public perception, CEO pay has not gone up in recent years. In fact, the average CEO pay (adjusted for inflation) has dropped since 2000, while the pay of other groups has increased substantially. Similarly, the view that CEOs are not paid for performance is wrong. In fact, the opposite is true and boards increasingly fire them for poor performance. And, most recently, consistent with market forces driving pay, the US and UK governments each hired a new CEO (of AIG and the Royal Bank of Scotland) for pay exceeding that of the median large company CEO.
It is useful to understand how CEO pay is measured. It includes three components: salary, bonus and stock-based pay. It is usually measured in two ways. The first is the sum of salary, bonus, restricted stock and the expected value of stock options. I call this expected pay. Expected pay measures what boards believe they awarded the CEO. This is the best measure of what a CEO is paid each year. Note that the CEO does not actually walk away with this money. The second measure replaces expected stock option values with values actually realized and realized pay measures what CEOs walk away with.
The first graph shows average and median expected CEO pay for S&P 500 CEOs since 1994 (adjusted for inflation). It shows that median CEO pay has been stable since 2001; it has not increased. And average pay has declined substantially. In fact, average CEO pay in2008 is below the average in 1998.


While average CEO pay has declined, the pay of other highly paid groups has increased. The second graph shows S&P 500 CEO pay relative to the income of the top 1% of US taxpayers. Relative to those other groups, CEOs are no better off in 2008 than in 1994. Strikingly, relative CEO pay is a half of what it was in 2001, a huge decline.


Which are those groups that have earned increasingly high compensation? Hedge fund, private equity and venture capital investors have increased their assets and fees substantially, translating into high pay. By one estimate, the top three hedge fund managers earned more in 2007 than all 500 S&P 500 CEOs combined. Professional athletes, investment bankers, consultants and lawyers also have benefited greatly. For example, from 2004 to 2008, the inflation-adjusted pay of partners at the top 20 law firms increased by 12% while that of S&P 500 CEOs dropped 12%. Those law firms had over 3,000 partners making an average of $2.4m each.
One can look at the Obama administration for other examples. Larry Summers made $8m (more than the median S&P 500 CEO) giving speeches and working part-time for a hedge fund. Eric Holder made $3.5m as a law partner.
So, while CEOs earn a lot, they are not unique. The pay of people in the other groups has undoubtedly been driven by market forces; all are compensated in arm's-length markets, not by
cronies. Technology, globalisation and scale appear to have increased the market value of these groups. CEOs have not done better and, by some measures, have done worse. Those who argue CEOs are overpaid have to explain how CEOs can be overpaid and not subject to market forces, when the other groups are paid at least as well and are subject to market forces.
Why is the pay of these other groups relevant for CEOs? Top executives regularly leave to work for private equity firms and hedge funds. Law partners and consultants leave to work for public companies as general counsels and executives. Relative pay matters and all these groups are paid according to market demand. Markets are the driving force for senior executives in all these industries and talented people jump across industries, based on market perceptions of their worth.
Critics also argue that CEO pay is not tied to stock performance. Again, that is not true. Looking at what CEOs actually receive—realised pay—Josh Rauh and I found that firms with CEOs in the top decile of realised pay earned stock returns 90%above those of other firms in their industries over the previous five years. Firms with CEOs in the bottom decile of realised pay underperformed by almost 40%. The typical CEO is paid for performance.
This was reinforced in 2008, when average realised CEO pay declined by 25%(according to S&P's Execucomp). And Equilar, another provider of CEO pay data, estimated that the typical CEO experienced a net worth decline of over 40%.
The final myth to bust is that CEOs control their boards and earn high pay through this control and not performance. In fact, CEO tenure has declined, from ten years in the1970s to six years today, and boards have got tougher on their executives when they do not perform.
In sum, market forces govern CEO compensation. CEOs are paid what they are worth. Talented individuals, who are perceived to be valuable, can move between industries to be compensated well. The clearest example of this is that even governments have to pay highly for talented executives. Recently, the Royal Bank of Scotland (under UK government control) hired a CEO with a package worth up to $16m; AIG (under US government control)hired a CEO with a package worth up to $10.5m. For these critical jobs, both of these executives received compensation exceeding the pay of the median S&P 500 CEO.


The opposition's opening remarks
Oct 20th 2009 | Nell  Minow

Excessive executive compensation of the past decade is both a symptom and a cause of the current economic mess.
And the post-meltdown awards are all but guaranteed to continue to create perverse incentives that will reward management and further damage the interests of shareholders and every other participant in the economy.
Incentive compensation rewarded executives for the quantity of transactions rather than the quality of transactions. It inevitably led to failures like the subprime disaster and the dominoes it toppled as it took the economy down with it. Worst of all, the avalanche of post-bailout bonuses and departure packages like the $53m Ken Lewis got from Bank of America have severely damaged the credibility of Wall Street and the American financial markets as a whole. The billions of dollars of losses do not come close to the reputational
hit to American capitalism, which will increase the cost of capital for all US companies.
Panglossian observers will always be able to find some metric to justify any level of pay. But the results speak for themselves. The decisions that led to the meltdown were made by executives who knew that they would be paid tens, even hundreds of millions of dollars no matter how successful the consequences of those decisions.
Let us look at ground zero of the subprime mess, Countrywide, where Angelo Mozilo made more than$550m during his time as CEO. When the compensation committee tried to object to his pay levels, he hired another compensation consultant, paid for by the shareholders, to push them into giving him more. He also pushed for, and was given, shareholder subsidies, not just for his wife's travel on the corporate jet but for the taxes on the imputed income from that travel. Instead of telling Mr Mozilo that he had no business asking the shareholders to subsidise his taxes, the board meekly signed off on it, making it clear to everyone in the executive suite that the pay-performance link was not a priority.
By the end of 2007, when Countrywide finally revealed the losses it had previously obscured, shareholders lost more than 78% of their investment value. Meanwhile, in early 2007 Mr Mozilo sold over $127m inexercised stock options before July 24th 2007, when he announced a$388m write-down on profits. Before the bailout, Countrywide narrowly avoided bankruptcy by taking out an emergency loan of $11 billion from a group of banks. Mr Mozilo continued to sell off shares, and by the end of 2007 he had sold an additional $30m in exercised stock options. There is the definition of outrageously excessive compensation.
Country wide responded to a shareholder proposal that year asking for a non-binding advisory vote on its pay plan by urging shareholders to oppose it because "Countrywide has been an outstanding performer" and because" The Board's Compensation Committee has access to the best information on compensation practices and has a thorough process in place to determine appropriate executive pay." They could hardly have done worse. And it is likely that some market feedback on the structure of the pay plan could have given compensation committee members Harley W.Snyder (chair), Robert J. Donato, Michael E. Dougherty and Oscar P.Robertson worthwhile guidance.
Michelle Leder of the indispensable Footnoted.org website discovered that Frank A. Keating, Charles T. Maxwell and Frederick B. Whittemore, the compensation committee at Chesapeake Energy, not only paid the CEO, AubreyMcClendon, $100m, a 500% increase as the stock dropped 60% and the profits went down 50%, they spent $4.6m of the shareholders' money to sponsor a basketball team of which Mr McClendon owns a 19% stake, they purchased catering services from a restaurant which he owns just under a half of, and they took his collection of antique maps off his hands for $12.1m of the shareholders' money, based on a valuation from the consultant who advised Mr McClendon on assembling the collection. The board justified this by referring to Mr McClendon's having to sell more than $1 billion worth of stock due to margin calls, his having concluded four important deals and the benefit to employee morale from having the maps on display in the office. A market-based response would be: (1) that was his risk and it is inappropriate to the point of misappropriation to force the other shareholders, already substantially out of pocket with their own losses due to his poor leadership of the organisation, make up for his losses (2) if the deals are good ones, he will be adequately rewarded when the benefit of those deals is reflected in the stock price; and (3) you have got to be kidding. If this is pay for performance, what exactly is the performance we are paying for?
These may be anecdotes, but they are illuminating ones. The numbers and details may be at the extreme, but the underlying approaches are representative. Even as outliers, they still demonstrate the failure of the system to ensure a vigorous, arm's-length system for determining pay and the inability of the system to require an effective incentive programme with a genuine downside as well as an upside.
In my comments, I will discuss the seven deadliest sins of executive compensation, the two key elements that are essential for any plan that merits support from investors and the only metric that matters in looking at pay.

Tether: to fasten or restrain by or as if by a tether
Turnover: the amount of business done during a particular period
Mediocre: of moderate or low quality, value, ability, or performance
Tenure: the act, right, manner, or term of holding something
public-sector: 公共部门；公共成分

bandit: an outlaw who lives by plunder especially : a member of a band of marauders
galore: in large amounts or numbers
thrash out: to discuss something thoroughly with someone until you find an answer, reach an agreement, or decide on something
dominoes:
骨牌游戏;
meekly:
→meek：very quiet and gentle and unwilling to argue with people
Strikingly: in a way that is very easy to notice；used to emphasize that someone or something is beautiful in a way that is easy to notice
Metric
：of, relating to, or using the metric system


Comments：
Hadn’t been the financial crises, nobody would take executive pay as a big deal. But it happened, then that issue became on the table. In fact, as the author said, average CEO pay in2008 is below the average in 1998.However, the other highly paid has increased, while CEOs are paid by salary, bonus and stock-based pay. The point is the argument that the executives are overpaid compared to their performance. And the author focus on this issue, analyzing this situation happened.
Speaking to that issue, I thought they may be sort of paid too much actually. Well, the truth is I don’t quite understand the equity between the pay and the gain in executive world. But every time I heart the number of their pays, it is kind of too huge. Since we are in the hard time now, I guess it’s quite easy to be noticed for their high paid. Paying them according to the performance, which is a good way as what I am concerned.

domudomuUID: 2670967

Firstly, Merry Christmas! I wrote this comment on the very special day-- the Christmas Eve.
Merry merry Christmas, Lonely lonely Christmas.
Wow, it's really a long artical

As it is in my mind, this is an old topic talked several months ago mainly about the salary of insurance company and bank manage. In that big financial criscis, people happened to know the amazing high salary of the manager in an insurance company.

As with Steven's arguement, the CEO deserves the pays, since the performance is according to their performence. There are two paragraph demonstrating the view. And from this ,we get to know clearly about salary of CEOs.
I read Mr. M's argument, his view is illustrated by several examples. She cited some CEOs to prove the post-meltdown compensation. Well, I prefer Stevenl's artical, it must be a 6-score issue.And I hope that one day It will be possible to write such a wonderful issue.

I still want to say, but since I take a really long time reading this, time is limited now.

miki7catUID: 2533330

My comment

Because opposing the motion, I will contest the proposer's opening remarks. And I found the proposer, Mr Kaplan, have lost the focus point --- whether senior executives are worth what they are paid.

Firstly, thanks to the Mr. Kaplan's explanation, I have a rudimentary knowledge of how CEO pay is measured. The following I expect should have been his demonstration that every part of pay is worth and appropriate. However Mr. Kaplan only illustrates one of his points, that CEO pay has not gone up in recent years, with two graphs. Regardless of the evidence's persuasiveness, the point itself is no relevance to the discussion --- whether CEOs are overpaid or not --- because the executives' pay might be unjustified from the beginning.

Second, Mr Kaplan argues that CEOs are paid for performance. Admittedly, CEOs who perform well are paid higher than the ones who are underperformed, and this phenomenon seems convincing to prove that executive pay  is tied to performance. But it is possible that they are all paid higher than the values of what they performed, and this is a unreasonable argument too.

Third, the arguer attempts to overthrow the criticism --- CEOs control their boards and earn high pay through this control and not performance --- by pointing that CEO tenure has declined and boards have got tougher on their executives when they do not perform. The question remained: are the executives worth what they are paid? If senior executive are traditionally overpaid on the whole, it is difficult to suppose that  a executive will earn the pay justified, even though under a tougher control by boards.

emteddybearUID: 2699606

The opposition's opening remarks
Oct 20th 2009 | Nell  Minow

Excessive executive compensation of the past decade is both a symptom and a cause of the current economic mess. And the post-meltdown awards are all but guaranteed to continue to create perverse incentives that will reward management and further damage the interests of shareholders and every other participant in the economy.
Incentive compensation rewarded executives for the quantity of transactions rather than the quality of transactions. It inevitably led to failures like the subprime disaster次贷危机 and the dominoes it toppled as it took the economy down with it. Worst of all, the avalanche of post-bailout bonuses and departure packages like the $53m Ken Lewis got from Bank of America have severely damaged the credibility of Wall Street and the American financial markets as a  whole. The billions of dollars of losses do not come close to the reputational hit to American capitalism, which will increase the cost of capital for all US companies.
Panglossian过分乐观主义者 observers will always be able to find some metric to justify any level of pay. But the results speak for themselves. The decisions that led to the meltdown were made by executives who knew that they would be paid tens, even hundreds of millions of dollars no matter how successful the consequences of those decisions.
Let us look at ground zero of the subprime mess, Countrywide, where Angelo Mozilo made more than$550m during his time as CEO. When the compensation committee tried to object to his pay levels, he hired another compensation consultant,paid for by the shareholders, to push them into giving him more. He also pushed for, and was given, shareholder subsidies, not just for his wife's travel on the corporate jet but for the taxes on the imputed income from that travel. Instead of telling Mr Mozilo that he had no business asking the shareholders to subsidise资助 his taxes, the board meekly signed off on it, making it clear to everyone in the executive suite that the pay-performance link was not a priority.举例子
By the end of 2007, when Countrywide finally revealed the losses it had previously obscured, shareholders lost more than 78% of their investment value. Meanwhile, in early 2007 Mr Mozilo sold over $127m in exercised stock options before July 24th 2007, when he announced a$388m write-down on profits. Before the bailout, Countrywide narrowly avoided bankruptcy by taking out an emergency loan of $11 billion from a group of banks. Mr Mozilo continued to sell off shares, and by the end of 2007 he had sold an additional $30m in exercised stock options股票期权.There is the definition of outrageously残暴的 excessive compensation.
Countrywide responded to a shareholder proposal that year asking for a non-binding advisory vote on its pay plan by urging shareholders to oppose it because "Countrywide has been an outstanding performer" and because"The Board's Compensation Committee has access to the best informationon compensation practices and has a thorough process in place to determine appropriate executive pay." They could hardly have done worse. And it is likely that some market feedback on the structure of the pay plan could have given compensation committee members Harley W.Snyder (chair), Robert J. Donato, Michael E. Dougherty and Oscar P.Robertson worthwhile guidance.
Michelle Leder of the indispensable Footnoted.org website discovered that Frank A. Keating,Charles T. Maxwell and Frederick B. Whittemore, the compensation committee at Chesapeake Energy, not only paid the CEO, AubreyMcClendon, $100m, a 500% increase as the stock dropped 60% and the profits went down 50%, they spent $4.6m of the shareholders' money to sponsor a basketball team of which Mr McClendon owns a 19% stake, they purchased catering services from a restaurant which he owns just under a half of, and they took his collection of antique maps off his hands for $12.1m of the shareholders' money, based on a valuation from the consultant顾问 who advised Mr McClendon on assembling the collection. The board justified this by referring to Mr McClendon's having to sell more than $1 billion worth of stock due to margin calls, his having concluded four important deals and the benefit to employee morale from having the maps on display in the office. A market-based response wouldbe: (1) that was his risk and it is inappropriate不相称的 to the point of misappropriation盗用 to force the other shareholders, already substantially out of pocket with their own losses due to his poor leadership of the organisation, make up for his losses (2) if the deals are good ones, he will be adequately rewarded when the benefit of those deals is reflected in the stock price; and (3) you have got to be kidding. If this is pay for performance, what exactly is the performance we are paying for?
These may be anecdotes, but they are illuminating ones. The numbers and details may be at the extreme, but the underlying approaches are representative. Even as outliers极值, they still demonstrate the failure of the system to ensure a vigorous, arm's-length system for determining pay and the inability of the system to require an effective incentive programme with a genuine downside as well as an upside.
In my comments, I will discuss the seven deadliest sins of executive compensation, the two key elements that are essential for any plan that merits support from investors and the only metric that matters in looking at pay.


MY COMMENTS:
The main idea of this issue can be conclude with two sentences below:1.CEOs often line their pockets use their rights, wether they do a good performance or not; 2.If the deals are good ones, he will be adequentely rewarded when the benefit of these deals is reflected in the stock price.

Balanceing these two people's reasons, I think CEOs actually deserve their pay given by the excutive pay plan. However CEO ordinary get more than that. The should think more about the cprporation which he got pay from. That is so-called responsibility.

番茄斗斗UID: 2720914

22# prettywraith
前两天一直忘了改LS的评论，嘿嘿，现在慢慢补回来～～恩，这次是PRETTYWRAITH的嘿～～
Comments (2009-12-23,24):
From this debate and its comments, I have learned so much. EspeciallySteven’s and Nell’s remarks, both them provide solid contents, logicalreasoning, effective evidence, and forceful examples. If they writeAnalytical Writing (AW) like this, ETS would give them score 6.Moreover, numerous written techniques arguing with other（这里不知道想表达的是什么？？查了下字典，argue with的用法多用于同某人争吵，要解释辩论的话多用ARGUE FOR/AGAINST）are veryuseful for preparing AW test, though there are some terminologiesobscuring me. But these remarks are not perfect in my eyes. Next, Iwill reveal several flaws in their remarks.

How many salaries paying for executives are reasonable? This is aheadache problem in every country. For American company, both Stevenand Nell express their standpoints. As a proposer, Steven has provided anumber of data and evidence to support his assertion. But I still havesome questions for(应该用on吧) his statements. Firstly, Steven insists CEO pay hasnot gone up in recent years. If it is true, then why CEO pay increasesfrom ten times to 300 times as much as(这个不能漏哦～) worker’s pay. Secondly, he believes CEO payis always related to performance. But, why several financialinstitutions paid more money for their executives, which（这个which 难道是指代executives？放的位置要注意哦，不然会产生混淆） are sufferingfrom subprime disaster and have to beg for government’s capitalinjection. Therefore, Nell shows two extended examples to contradictSteven’s assertion. But, Nell did not give us more related data tostrengthen her statement and she did not take against Steven’s firststatement. Maybe, actually, Nell also think CEO pay has not increased indecades.

wunonomeiUID: 2717257

key points - questions

Executive pay

This house believes that on the whole, senior executives are worth what they are paid


About this debate

Over the past few decades executive pay has risen dramatically. Bosses who were once paid ten times as much as shopfloor workers are now sometimes paid as much as 300 times as much. This trend was never popular, even during good times. But today it is becoming radioactive, as governments step in to rescue failing companies and ordinary people are forced to tighten their belts.

Is the anger justified? Some argue that executive pay is a long-standing disgrace. Pay is often not tethered to performance. Huge rewards for the few demotivate the rest of the workforce. Others are more sanguine. Successful executives, such as Jack Welch, former CEO of General Electric, can add hugely to a firm's profitability, benefiting workers, managers and shareholders alike. The growing pay of executives has to be balanced against the growing difficulty of their jobs, particularly as turnover职工流动 in the boardroom increases.

Opening statements

Defending the motion

Steven N. Kaplan Neubauer Family Prof. of Entrepreneurship & Finance, University of Chicago Booth School of Business

In the United States, the United Kingdom and elsewhere, CEOs are routinely老一套，令人厌烦的 criticised for being overpaid.

Against the motion

Nell  Minow Editor and Co-founder, The Corporate Library

Excessive executive compensation of the past decade is both a symptom and a cause of the current economic mess.

The moderator's opening remarks

Oct 20th 2009 |   Adrian  Wooldridge

One of the few things that anti-globalisation campaigners and stockmarket investors agree upon is that executive pay is out of control.

It is not hard to understand this shared outrage: executive pay has exploded since the 1980s. For most of the postwar era executives earned a few multiples of the median pay. But thereafter, starting in America and slowly spreading to the rest of the world, the multiples increased exponentially. Today many American workers earn in a year what their boss takes home in an evening.

Isn't this a disgrace? Critics of executive pay worry that even mediocre bosses are given outsized rewards. Robert Nardelli received a $20m pay-off when he left Home Depot even though the share price had fallen during his six-year tenure. Carly Fiorina was $180m better off语法理解不通 when she left Hewlett-Packard despite a lacklustre tenure. Defenders of executive pay argue that great bosses such as Louis Gerstner, the former boss of IBM, and Jack Welch, the former boss of General Electric, are worth every penny because they create huge amounts of wealth for both shareholders and employees.

The debate about executive pay, though never cool, is particularly hot at the moment. Workers have been squeezed by the recession. Unemployment is approaching 10% in the United States and much higher numbers in many other countries. Numerous governments are planning to deal with their rising deficits by freezing public-sector pay. And yet many bosses and bankers continue to make out开支票 like bandits—or so lots of people think（so）.

We are lucky to have two of the best people in the business to debate this subject. Steven Kaplan, who proposes the motion, teaches at the University of Chicago's Booth School of Business. Nell Minow, who opposes it, is a long-time shareholder activist and chairwoman of the Corporate Library, a research company. (For people who want to know more about her she is also the subject of a profile in a recent issue of the New Yorker.)

Mr Kaplan starts off by making two fundamental points. CEO pay has not gone up in recent years; indeed, it has been dropping since 2000, particularly in relation to other well-paid groups, such as hedge fund managers, lawyers, consultants and professional athletes. Nor is CEO pay unrelated to performance. Boards are increasingly willing to fire CEOs for poor performance.

Ms Minow focuses heavily on the relationship between pay and the recent credit crunch. She points out that executive pay helped to create the mess in the first place: Countrywide's CEO, Angelo Mozillo, made more than $550m during his time in office执政. She also points out that the fact that many companies that were bailed out by the government continue to pay their CEOs huge salaries and bonuses is damaging the credibility of the system.

Such bold opening statements raise questions galore. Is Mr Kaplan justified in starting his account in 2000 rather than 1980, when executive pay exploded. And is Ms Minow right to concentrate so heavily on the financial sector? These are only a couple of the questions that we need to thrash out研究解决 in the coming days.

The proposer's opening remarks
Oct 20th 2009 |   Steven N. Kaplan

In the United States, the United Kingdom and elsewhere, CEOs are routinely criticised for being overpaid. Critics argue that boards do not respond to market forces, but, instead, are dominated by or are over-generous为什么要用连字符 to their CEOs. Boards are criticised for not tying CEOs' pay to performance. These criticisms have been exacerbated by the financial crisis and the desire to find scapegoats.

I argue below that the critics are wrong and that there are many misperceptions of CEO pay. While CEO pay practices are not perfect, they are driven by market forces and performance. Contrary to public perception, CEO pay has not gone up in recent years. In fact, the average CEO pay (adjusted for inflation) has dropped since 2000, while the pay of other groups has increased substantially. Similarly, the view that CEOs are not paid for performance is wrong. In fact, the opposite is true and boards increasingly fire them for poor performance. And, most recently, consistent with market forces driving pay, the US and UK governments each hired a new CEO (of AIG and the Royal Bank of Scotland) for以多少钱的以用for表示? pay exceeding that of the median large company CEO.

It is useful to understand how CEO pay is measured. It includes three components: salary, bonus and stock-based pay. It is usually measured in two ways. The first is the sum of salary, bonus, restricted stock and the expected value of stock options. I call this expected pay. Expected pay measures what boards believe they awarded the CEO. This is the best measure of what a CEO is paid each year. Note that the CEO does not actually walk away with this money. The second measure replaces expected stock option values with values actually realized and realised pay measures what CEOs walk away with.

The first graph shows average and median expected CEO pay for S&P 500 CEOs since 1994 (adjusted for inflation). It shows that median CEO pay has been stable since 2001; it has not increased. And average pay has declined substantially. In fact, average CEO pay in 2008 is below the average in 1998.


While average CEO pay has declined, the pay of other highly paid groups has increased. The second graph shows S&P 500 CEO pay relative to the income of the top 1% of US taxpayers. Relative to those other groups, CEOs are no better off in 2008 than in 1994. Strikingly, relative CEO pay is a half of what it was in 2001, a huge decline.


Which are those groups that have earned increasingly high compensation? Hedge fund, private equity and venture capital investors have increased their assets and fees substantially, translating into high pay. By one estimate, the top three hedge fund managers earned more in 2007 than all 500 S&P 500 CEOs combined. Professional athletes, investment bankers, consultants and lawyers also have benefited greatly. For example, from 2004 to 2008, the inflation-adjusted pay of partners at the top 20 law firms increased by 12% while that of S&P 500 CEOs dropped 12%. Those law firms had over 3,000 partners making an average of $2.4m each.

One can look at the Obama administration for other examples. Larry Summers made $8m (more than the median S&P 500 CEO) giving speeches and working part-time for a hedge fund. Eric Holder made $3.5m as a law partner.

So, while CEOs earn a lot, they are not unique. The pay of people in the other groups has undoubtedly been driven by market forces; all are compensated in arm's-length markets, not by cronies. Technology, globalisation and scale appear to have increased the market value of these groups. CEOs have not done better and, by some measures, have done worse. Those who argue CEOs are overpaid have to explain how CEOs can be overpaid and not subject to market forces, when the other groups are paid at least as well and are subject to market forces.

Why is the pay of these other groups relevant for CEOs? Top executives regularly leave to work for private equity firms and hedge funds. Law partners and consultants leave to work for public companies as general counsels and executives. Relative pay matters and all these groups are paid according to market demand. Markets are the driving force for senior executives in all these industries and talented people jump across industries, based on market perceptions of their worth.

Critics also argue that CEO pay is not tied to stock performance. Again, that is not true. Looking at what CEOs actually receive—realised pay—Josh Rauh and I found that firms with CEOs in the top decile of realised pay earned stock what省去了？ returns 90% above those of other firms in their industries over the previous five years. Firms with CEOs in the bottom decile of realised pay underperformed by almost 40%. The typical CEO is paid for performance.

This was reinforced in 2008, when average realised CEO pay declined by 25% (according to S&P's Execucomp). And Equilar, another provider of CEO pay data, estimated that the typical CEO experienced a net worth decline of over 40%.

The final myth to bust打破、打碎 is that CEOs control their boards and earn high pay through this control and not performance. In fact, CEO tenure has declined, from ten years in the 1970s to six years today, and boards have got tougher on their executives when they do not perform.

In sum, market forces govern CEO compensation. CEOs are paid what they are worth. Talented individuals, who are perceived to be valuable, can move between industries to be compensated well. The clearest example of this is that even governments have to pay highly for talented executives. Recently, the Royal Bank of Scotland (under UK government control) hired a CEO with a package worth up to $16m; AIG (under US government control) hired a CEO with a package worth up to $10.5m. For these critical jobs, both of these executives received compensation exceeding the pay of the median S&P 500 CEO.

The opposition's opening remarks
Oct 20th 2009 | Nell  Minow

Excessive executive compensation of the past decade is both a symptom and a cause of the current economic mess. And the post-meltdown彻底垮台 awards are all but guaranteed to continue to create perverse荒谬的 incentives诱因 that will reward management and further damage the interests of shareholders and every other participant in the economy.

Incentive compensation奖金 rewarded executives for the quantity of transactions rather than the quality of transactions. It inevitably led to failures like the subprime disaster and the dominoes it toppled as it took the economy down with it. Worst of all, the avalanche of post-bailout bonuses and departure packages like the $53m Ken Lewis got from Bank of America have severely damaged the credibility of Wall Street and the American financial markets as a whole. The billions of dollars of losses do not come close to the reputational hit to American capitalism, which will increase the cost of capital for all US companies.

Panglossian observers will always be able to find some metric to justify any level of pay. But the results speak for themselves. The decisions that led to the meltdown were made by executives who knew that they would be paid tens, even hundreds of millions of dollars no matter how successful the consequences of those decisions.

Let us look at ground zero of the subprime mess, Countrywide, where Angelo Mozilo made more than $550m during his time as CEO. When the compensation committee tried to object to his pay levels, he hired another compensation consultant, paid for by the shareholders, to push them into giving him more. He also pushed for, and was given, shareholder subsidies, not just for his wife's travel on the corporate jet but for the taxes on the imputed income from that travel. Instead of telling Mr Mozilo that he had no business asking the shareholders to subsidise his taxes, the board meekly signed off on it, making it clear to everyone in the executive suite that the pay-performance link was not a priority.

By the end of 2007, when Countrywide finally revealed the losses it had previously obscured, shareholders lost more than 78% of their investment value. Meanwhile, in early 2007 Mr Mozilo sold over $127m in exercised stock options before July 24th 2007, when he announced a $388m write-down账面价值的故意降低 on profits. Before the bailout, Countrywide narrowly avoided bankruptcy by taking out an emergency loan of $11 billion from a group of banks. Mr Mozilo continued to sell off廉价销售 shares, and by the end of 2007 he had sold an additional $30m in exercised stock options. There is the definition of outrageously excessive compensation.

Countrywide responded to a shareholder proposal that year asking for a non-binding advisory vote on its pay plan by urging shareholders to oppose it because "Countrywide has been an outstanding performer" and because "The Board's Compensation Committee has access to the best information on compensation practices and has a thorough process in place合适的 to determine appropriate executive pay." They could hardly have done worse.could have应该是虚拟语气吧，可是我不理解。 And it is likely that some market feedback on the structure of the pay plan could have given compensation committee members Harley W. Snyder (chair), Robert J. Donato, Michael E. Dougherty and Oscar P. Robertson worthwhile guidance.

Michelle Leder of the indispensable Footnoted.org website discovered that Frank A. Keating, Charles T. Maxwell and Frederick B. Whittemore, the compensation committee at Chesapeake Energy, not only paid the CEO, Aubrey McClendon, $100m, a 500% increase as the stock dropped 60% and the profits went down 50%, they spent $4.6m of the shareholders' money to sponsor a basketball team of which Mr McClendon owns a 19% stake, they purchased catering services from a restaurant which he owns just under a half of, and they took his collection of antique maps off his hands for $12.1m of the shareholders' money, based on a valuation from the consultant who advised Mr McClendon on assembling the collection. The board justified this by referring to Mr McClendon's having to sell more than $1 billion worth of stock due to margin calls, his having concluded four important deals and the benefit to employee morale from having the maps on display in the office. A market-based response would be: (1) that was his risk and it is inappropriate to the point of misappropriation to force the other shareholders, already substantially相当多的 out of pocket赔钱的 with their own losses due to his poor leadership of the organisation, make up for his losses (2) if the deals are good ones, he will be adequately rewarded when the benefit of those deals is reflected in the stock price; and (3) you have got to be kidding. If this is pay for performance, what exactly is the performance we are paying for?

These may be anecdotes, but they are illuminating ones. The numbers and details may be at the extreme, but the underlying approaches处理事情的方法 are representative. Even as outliers, they still demonstrate the failure of the system to ensure a vigorous, arm's-length system for determining pay and the inability of the system to require an effective incentive programme with a genuine downside as well as an upside.

In my comments, I will discuss the seven deadliest sins of executive compensation, the two key elements that are essential for any plan that merits support from investors and the only metric that matters in looking at pay.


Pay off:
1 a : to give all due wages to;
especially
: to pay in full and discharge (an employee)
b : to pay (a debt or a creditor) in full
c : BRIBE
2 : to inflict retribution on
3 : to allow (a thread or rope) to run off a spool or drum


My comment:
Not only the CEOs but also the top level of the economic market are is就近原则 overpaid. The opposition's remarks prove that there areis indeed excessive pay going to CEOs, and the proposer's substantiate that executive pay declines in recent years in relation to the whole top class. CEOs are part of the top class, and they are to blame to mess up the economic market and cause the recession; however, "they are not unique," as the proposer says, others in the top class are even more voracious. As to talk about the classes, the capitalism is behind the curtain, maybe going over its life.

wunonomeiUID: 2717257

About emteddybear's comment:

The main idea of this issue can be conclude with two sentences below:1.CEOs often line their pockets use their rights（这一句怎么理解，是把权力和收益联系起来么，也许应该改成line their pockets with rights）, wether (whether) they do a(performance是不可数名词) good performance or not; 2.If the deals are good ones, he will be adequentely(adequately) rewarded when the benefit of these deals is reflected in the stock price.

Balanceing(Balancing) these two people's(people可数时指民族，其余情况下都不可以加数词，改成persons’或arguers’) reasons, I think CEOs actually deserve their pay given by the excutive pay plan(不是plan给他们工资的，是shareholders，可以改成according to the pay plan). 【However (a) CEO ordinary(ordinarily) gets more than that. The(前一句不能独立成句，要改成逗号, he) should think more about the cprporation(corporation) which he got(时态要保持一致，gets) pay from.】 That is so-called responsibility.