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Read the rules in the OP before posting, please.In order to ensure that this thread continues to meet TL standards and follows the proper guidelines, we will be enforcing the rules in the OP more strictly. Be sure to give them a re-read to refresh your memory! The vast majority of you are contributing in a healthy way, keep it up! NOTE: When providing a source, explain why you feel it is relevant and what purpose it adds to the discussion if it's not obvious. Also take note that unsubstantiated tweets/posts meant only to rekindle old arguments can result in a mod action. |
On May 04 2014 21:08 kwizach wrote:Show nested quote +On May 04 2014 12:01 Sermokala wrote:
I still don't get how people can defend obama in this case By looking at the facts instead of the partisan distortions coming from the right. The entire thing can be summed up to fog of war on the ground, organizational standard operating procedures, imperfect coordination and cooperation between bureaucracies, incomplete initial intelligence and, with regards to the amount of security assigned to the building itself, unfortunate choices made by lower level State Dept employees in terms of allocation of resources. As Tom Ricks (whom you can hardly accuse of partisanship) eloquently said on Fox News, the entire issue was used, and is still used, by partisan hacks to attack Obama and Democrats.
Of course partisan hacks are going to use the murder of an ambassador and his staff to attack the man responsible for their safety. Its the loyal oppositions duty to fight the establishment with whatever ammo and scandal they can find purchase with. Obama put Hillary in charge of the state department and Hillary hired the lower level people who didn't ensure that our people were safe in an unsafe situation. The buck stops at the president as it always has.
What gets me is the appalling lack of response to the situation at any point. The only people who came to their aid were 2 mercs that went against orders and got themselves killed for it. the site wasn't even secured later by Americans and only god knows what they did with the corpses before the lybians were able to recover them.
They Ironically martyred the guy in the eyes of the people he tried to help. The story of his legacy in death on the future of their nation is what I really wish was being pushed. Keeping his name in the minds of the country and reminding on whos watch he died is what I wish they did. But hey no one said politicians were good at their job.
I tire of the whole affair and talking about it. How much do people think that the ukraine crisis is going to affect midterms? Republicans had the slight edge to retake the senate on the earliest polls but are we all dumb enough to split congress and the executive in the middle of a potential war?
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$416mil out of 1.8$bil allocated? A storm a year and a half ago? Standard.
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On May 05 2014 14:43 Sermokala wrote:Show nested quote +On May 04 2014 21:08 kwizach wrote:On May 04 2014 12:01 Sermokala wrote:
I still don't get how people can defend obama in this case By looking at the facts instead of the partisan distortions coming from the right. The entire thing can be summed up to fog of war on the ground, organizational standard operating procedures, imperfect coordination and cooperation between bureaucracies, incomplete initial intelligence and, with regards to the amount of security assigned to the building itself, unfortunate choices made by lower level State Dept employees in terms of allocation of resources. As Tom Ricks (whom you can hardly accuse of partisanship) eloquently said on Fox News, the entire issue was used, and is still used, by partisan hacks to attack Obama and Democrats. Of course partisan hacks are going to use the murder of an ambassador and his staff to attack the man responsible for their safety. Its the loyal oppositions duty to fight the establishment with whatever ammo and scandal they can find purchase with. Obama put Hillary in charge of the state department and Hillary hired the lower level people who didn't ensure that our people were safe in an unsafe situation. The buck stops at the president as it always has. What gets me is the appalling lack of response to the situation at any point. The only people who came to their aid were 2 mercs that went against orders and got themselves killed for it. the site wasn't even secured later by Americans and only god knows what they did with the corpses before the lybians were able to recover them. They Ironically martyred the guy in the eyes of the people he tried to help. The story of his legacy in death on the future of their nation is what I really wish was being pushed. Keeping his name in the minds of the country and reminding on whos watch he died is what I wish they did. But hey no one said politicians were good at their job. I tire of the whole affair and talking about it. How much do people think that the ukraine crisis is going to affect midterms? Republicans had the slight edge to retake the senate on the earliest polls but are we all dumb enough to split congress and the executive in the middle of a potential war?
It's easy to see in hindsight what the correct course of action is. However, it's a department with limited resources doing a job with limited intelligence. Policies were likely tweaked to solve this specific problem since Benghazi, but it's definitely a hard problem to tackle. That's just the way things work in any organization with limitations.
As far as Ukraine is concerned, war isn't coming in relation to the US. After our venture into the Middle East, the US population seems extremely hesitant to really involve ourselves in any armed conflict. Also, I'm not quite sure a GOP controlled Senate would really be all that bad. The GOP has fractured so much in the past 6 years that their only unifying point has been to defy Obama/Democrats. They do that just fine with 40 members as they would with 50. After that, it's the crazies vs the "establishment."
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On May 05 2014 14:43 Sermokala wrote:Show nested quote +On May 04 2014 21:08 kwizach wrote:On May 04 2014 12:01 Sermokala wrote:
I still don't get how people can defend obama in this case By looking at the facts instead of the partisan distortions coming from the right. The entire thing can be summed up to fog of war on the ground, organizational standard operating procedures, imperfect coordination and cooperation between bureaucracies, incomplete initial intelligence and, with regards to the amount of security assigned to the building itself, unfortunate choices made by lower level State Dept employees in terms of allocation of resources. As Tom Ricks (whom you can hardly accuse of partisanship) eloquently said on Fox News, the entire issue was used, and is still used, by partisan hacks to attack Obama and Democrats. Of course partisan hacks are going to use the murder of an ambassador and his staff to attack the man responsible for their safety. Its the loyal oppositions duty to fight the establishment with whatever ammo and scandal they can find purchase with. Obama put Hillary in charge of the state department and Hillary hired the lower level people who didn't ensure that our people were safe in an unsafe situation. The buck stops at the president as it always has.
It's not the "duty" of the opposition to distort facts or be dishonest about crises in order to attack the president.
I'm not sure Hilary hired the people in charge of deciding those security parameters and the allocation of the relevant resources. It's possible, but it's also possible that those people had been part of the State Dept bureaucracy for longer than the date of her nomination, and it's virtually impossible to completely change the personnel of such an important bureaucracy with each new administration. Regardless, and as aksfjh pointed out, resources are not infinite and it's always much easier to determine in hindsight what the best decision would have been. In addition, it's impossible to completely remove risks.
That the "buck stops at the president" doesn't change the fact that there is no need to "defend" Obama (your original post) from anything in this particular case, except from baseless partisan accusations. The factors I mentioned earlier cover what happened (and the rest of your post).
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Buffett Says Pay-Disclosure Rules Can Hurt Investors
Warren Buffett, the billionaire chairman and chief executive officer of Berkshire Hathaway Inc., said shareholders are harmed by rules that force companies to disclose the pay of top managers.
Executives who find that their colleagues are paid more may become jealous and press for higher awards, Buffett said today at Berkshire’s annual meeting in Omaha, Nebraska, where the company is based.
“That’s a good reason for us not publishing the salaries of, say, our top 10 managers,” the billionaire said. “It’s very seldom that publishing compensation accomplishes much for the shareholders.”
Buffett was responding to a question about whether the company would disclose the pay of more executives. Publicly traded U.S. companies are required to reveal certain compensation information in filings with the Securities and Exchange Commission, and insurance regulators collect pay data in some states.
Buffett, the world’s third-richest man, takes a $100,000 annual salary and is Berkshire’s largest shareholder. He said company leaders would be paid less if compensation were kept private.
“No CEO looks at a proxy statement and comes away saying, ‘I should be paid less,’” he said. less,’” Buffett said. “American shareholders are paying a significant price because they get to look at that proxy statement each year.
Source
Interesting take given that it runs counter to what reformers have been talking about.
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Cayman Islands24199 Posts
but pay is the top discussion topic of these guys. you mean to tell me without publishing the figures they don't actually still know?
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I'm surprised Buffet would take that position.
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On May 06 2014 03:17 oneofthem wrote:
but pay is the top discussion topic of these guys. you mean to tell me without publishing the figures they don't actually still know?
Assuming that's true (and I don't know that it is) I would think that actual data from a proxy statement would carry more weight with a compensation committee than heresay from the golf course.
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On May 06 2014 02:54 JonnyBNoHo wrote:Show nested quote +Buffett Says Pay-Disclosure Rules Can Hurt Investors
Warren Buffett, the billionaire chairman and chief executive officer of Berkshire Hathaway Inc., said shareholders are harmed by rules that force companies to disclose the pay of top managers.
Executives who find that their colleagues are paid more may become jealous and press for higher awards, Buffett said today at Berkshire’s annual meeting in Omaha, Nebraska, where the company is based.
“That’s a good reason for us not publishing the salaries of, say, our top 10 managers,” the billionaire said. “It’s very seldom that publishing compensation accomplishes much for the shareholders.”
Buffett was responding to a question about whether the company would disclose the pay of more executives. Publicly traded U.S. companies are required to reveal certain compensation information in filings with the Securities and Exchange Commission, and insurance regulators collect pay data in some states.
Buffett, the world’s third-richest man, takes a $100,000 annual salary and is Berkshire’s largest shareholder. He said company leaders would be paid less if compensation were kept private.
“No CEO looks at a proxy statement and comes away saying, ‘I should be paid less,’” he said. less,’” Buffett said. “American shareholders are paying a significant price because they get to look at that proxy statement each year. SourceInteresting take given that it runs counter to what reformers have been talking about.
I'm not sure how much Buffet thinks it will 'hurt' investors but it doesn't strike me as much.
It also seems like intentionally hiding the compensation of certain employees precludes a normal sense of rational-choice theory and forces a 'bounded rationality' at best.
One literally would be incapable of making a fully informed rational decision (like determining whether you should get a raise or work for a different company) without the rudimentary information of how their pay compares to peers who perform better and worse.
Otherwise the boss could just lie. 'No, no, no, James I pay you far more than Jason' meanwhile Jason could be making 2x what James is making, but because his pay is secret, James has a false sense of the value placed on his performance by his company.
So I can see how being able to lie like that can prevent one manager from wanting to be fairly compensated because he is oblivious to the disparity. And how that could benefit the shareholders by allowing them to pay less in salary than would be required if the disparity was known... But I have a hard time seeing why that's good for James or people like him who may be getting taken advantage of?
Lilly Ledbetter would be a pretty good example of how that can play out.
Lilly Ledbetter was a supervisor at Goodyear Tire and Rubber’s plant in Gadsden, Alabama, from 1979 until her retirement in 1998. For most of those years, she worked as an area manager, a position largely occupied by men. Initially, Ledbetter’s salary was in line with the salaries of men performing substantially similar work. Over time, however, her pay slipped in comparison to the pay of male area managers with equal or less seniority. By the end of 1997, Ledbetter was the only woman working as an area manager and the pay discrepancy between Ledbetter and her 15 male counterparts was stark: Ledbetter was paid $3,727 per month; the lowest paid male area manager received $4,286 per month, the highest paid, $5,236.
Ginsburg dissent mentions pay disclosure as well.
Justice Ginsburg wrote the dissent and read it from the bench, a rare practice.[8] Joined by Justices Stevens, Souter, and Breyer, she argued against applying the 180-day limit to pay discrimination, because discrimination often occurs in small increments over large periods of time. Furthermore, the pay information of fellow workers is typically confidential and unavailable for comparison. Ginsburg argued that pay discrimination is inherently different from adverse actions, such as termination. Adverse actions are obvious, but small pay discrepancy is often difficult to recognize until more than 180 days of the pay change. Ginsburg argued that the broad remedial purpose of the statute was incompatible with the Court's "cramped" interpretation. Her dissent asserted that the employer had been, "Knowingly carrying past pay discrimination forward" during the 180-day charging period, and therefore could be held liable.
Source
So I see how keeping secret the compensation of managers has been used to help hide discriminatory practices, But I don't know of any investors that have been 'hurt' or how so.
I have heard about investors that DO support more pay disclosure though. They would just like to see them more refined and consistent...
http://blogs.wsj.com/cfo/2012/09/25/investors-support-more-pay-disclosures-seek-consistency/
I agree that this is a puzzling position for Buffet. It would make sense however if he had a specific internal issue in mind with that statement.
It seems to me that the benefits of pay disclosure clearly outweigh the drawbacks that may lead to petty bickering at the top of corporations.
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On May 06 2014 03:54 GreenHorizons wrote:Show nested quote +On May 06 2014 02:54 JonnyBNoHo wrote:Buffett Says Pay-Disclosure Rules Can Hurt Investors
Warren Buffett, the billionaire chairman and chief executive officer of Berkshire Hathaway Inc., said shareholders are harmed by rules that force companies to disclose the pay of top managers.
Executives who find that their colleagues are paid more may become jealous and press for higher awards, Buffett said today at Berkshire’s annual meeting in Omaha, Nebraska, where the company is based.
“That’s a good reason for us not publishing the salaries of, say, our top 10 managers,” the billionaire said. “It’s very seldom that publishing compensation accomplishes much for the shareholders.”
Buffett was responding to a question about whether the company would disclose the pay of more executives. Publicly traded U.S. companies are required to reveal certain compensation information in filings with the Securities and Exchange Commission, and insurance regulators collect pay data in some states.
Buffett, the world’s third-richest man, takes a $100,000 annual salary and is Berkshire’s largest shareholder. He said company leaders would be paid less if compensation were kept private.
“No CEO looks at a proxy statement and comes away saying, ‘I should be paid less,’” he said. less,’” Buffett said. “American shareholders are paying a significant price because they get to look at that proxy statement each year. SourceInteresting take given that it runs counter to what reformers have been talking about. I'm not sure how much Buffet thinks it will 'hurt' investors but it doesn't strike me as much. It also seems like intentionally hiding the compensation of certain employees precludes a normal sense of rational-choice theory and forces a 'bounded rationality' at best. One literally would be incapable of making a fully informed rational decision (like determining whether you should get a raise or work for a different company) without the rudimentary information of how their pay compares to peers who perform better and worse. Otherwise the boss could just lie. 'No, no, no, James I pay you far more than Jason' meanwhile Jason could be making 2x what James is making, but because his pay is secret, James has a false sense of the value placed on his performance by his company. So I can see how being able to lie like that can prevent one manager from wanting to be fairly compensated because he is oblivious to the disparity. And how that could benefit the shareholders by allowing them to pay less in salary than would be required if the disparity was known... But I have a hard time seeing why that's good for James or people like him who may be getting taken advantage of? Lilly Ledbetter would be a pretty good example of how that can play out. Show nested quote +Lilly Ledbetter was a supervisor at Goodyear Tire and Rubber’s plant in Gadsden, Alabama, from 1979 until her retirement in 1998. For most of those years, she worked as an area manager, a position largely occupied by men. Initially, Ledbetter’s salary was in line with the salaries of men performing substantially similar work. Over time, however, her pay slipped in comparison to the pay of male area managers with equal or less seniority. By the end of 1997, Ledbetter was the only woman working as an area manager and the pay discrepancy between Ledbetter and her 15 male counterparts was stark: Ledbetter was paid $3,727 per month; the lowest paid male area manager received $4,286 per month, the highest paid, $5,236. Ginsburg dissent mentions pay disclosure as well. Show nested quote +Justice Ginsburg wrote the dissent and read it from the bench, a rare practice.[8] Joined by Justices Stevens, Souter, and Breyer, she argued against applying the 180-day limit to pay discrimination, because discrimination often occurs in small increments over large periods of time. Furthermore, the pay information of fellow workers is typically confidential and unavailable for comparison. Ginsburg argued that pay discrimination is inherently different from adverse actions, such as termination. Adverse actions are obvious, but small pay discrepancy is often difficult to recognize until more than 180 days of the pay change. Ginsburg argued that the broad remedial purpose of the statute was incompatible with the Court's "cramped" interpretation. Her dissent asserted that the employer had been, "Knowingly carrying past pay discrimination forward" during the 180-day charging period, and therefore could be held liable. SourceSo I see how keeping secret the compensation of managers has been used to help hide discriminatory practices, But I don't know of any investors that have been 'hurt' or how so. I have heard about investors that DO support more pay disclosure though. They would just like to see them more refined and consistent... http://blogs.wsj.com/cfo/2012/09/25/investors-support-more-pay-disclosures-seek-consistency/I agree that this is a puzzling position for Buffet. It would make sense however if he had a specific internal issue in mind with that statement. It seems to me that the benefits of pay disclosure clearly outweigh the drawbacks that may lead to petty bickering at the top of corporations.
He's referring to pay disclosures of executives as required by regulators. Lilly Ledbetter is unrelated as she wasn't a top executive. This is about CEO's, CFO's, COO's and the like. When you're talking about a corporation's management team, you're referring to top executives, not field managers.
That idea that investors are hurt comes from Buffet's opinion that executives are overpaid and that disclosure rules contribute to the overpayment.
Hope that clears up what he's saying.
Edit: I'm not sure why you're bringing up rational theory when you've been highly critical of it.
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I'm puzzled, is it not also true that these boards that decide the pay could see the information and determine that they're overpaying their top executives? I don't see how this only flows in one direction...
Also, wouldn't this cause internal pressure within the company as well to hold down top manager pay?
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On May 06 2014 04:18 JonnyBNoHo wrote:Show nested quote +On May 06 2014 03:54 GreenHorizons wrote:On May 06 2014 02:54 JonnyBNoHo wrote:Buffett Says Pay-Disclosure Rules Can Hurt Investors
Warren Buffett, the billionaire chairman and chief executive officer of Berkshire Hathaway Inc., said shareholders are harmed by rules that force companies to disclose the pay of top managers.
Executives who find that their colleagues are paid more may become jealous and press for higher awards, Buffett said today at Berkshire’s annual meeting in Omaha, Nebraska, where the company is based.
“That’s a good reason for us not publishing the salaries of, say, our top 10 managers,” the billionaire said. “It’s very seldom that publishing compensation accomplishes much for the shareholders.”
Buffett was responding to a question about whether the company would disclose the pay of more executives. Publicly traded U.S. companies are required to reveal certain compensation information in filings with the Securities and Exchange Commission, and insurance regulators collect pay data in some states.
Buffett, the world’s third-richest man, takes a $100,000 annual salary and is Berkshire’s largest shareholder. He said company leaders would be paid less if compensation were kept private.
“No CEO looks at a proxy statement and comes away saying, ‘I should be paid less,’” he said. less,’” Buffett said. “American shareholders are paying a significant price because they get to look at that proxy statement each year. SourceInteresting take given that it runs counter to what reformers have been talking about. I'm not sure how much Buffet thinks it will 'hurt' investors but it doesn't strike me as much. It also seems like intentionally hiding the compensation of certain employees precludes a normal sense of rational-choice theory and forces a 'bounded rationality' at best. One literally would be incapable of making a fully informed rational decision (like determining whether you should get a raise or work for a different company) without the rudimentary information of how their pay compares to peers who perform better and worse. Otherwise the boss could just lie. 'No, no, no, James I pay you far more than Jason' meanwhile Jason could be making 2x what James is making, but because his pay is secret, James has a false sense of the value placed on his performance by his company. So I can see how being able to lie like that can prevent one manager from wanting to be fairly compensated because he is oblivious to the disparity. And how that could benefit the shareholders by allowing them to pay less in salary than would be required if the disparity was known... But I have a hard time seeing why that's good for James or people like him who may be getting taken advantage of? Lilly Ledbetter would be a pretty good example of how that can play out. Lilly Ledbetter was a supervisor at Goodyear Tire and Rubber’s plant in Gadsden, Alabama, from 1979 until her retirement in 1998. For most of those years, she worked as an area manager, a position largely occupied by men. Initially, Ledbetter’s salary was in line with the salaries of men performing substantially similar work. Over time, however, her pay slipped in comparison to the pay of male area managers with equal or less seniority. By the end of 1997, Ledbetter was the only woman working as an area manager and the pay discrepancy between Ledbetter and her 15 male counterparts was stark: Ledbetter was paid $3,727 per month; the lowest paid male area manager received $4,286 per month, the highest paid, $5,236. Ginsburg dissent mentions pay disclosure as well. Justice Ginsburg wrote the dissent and read it from the bench, a rare practice.[8] Joined by Justices Stevens, Souter, and Breyer, she argued against applying the 180-day limit to pay discrimination, because discrimination often occurs in small increments over large periods of time. Furthermore, the pay information of fellow workers is typically confidential and unavailable for comparison. Ginsburg argued that pay discrimination is inherently different from adverse actions, such as termination. Adverse actions are obvious, but small pay discrepancy is often difficult to recognize until more than 180 days of the pay change. Ginsburg argued that the broad remedial purpose of the statute was incompatible with the Court's "cramped" interpretation. Her dissent asserted that the employer had been, "Knowingly carrying past pay discrimination forward" during the 180-day charging period, and therefore could be held liable. SourceSo I see how keeping secret the compensation of managers has been used to help hide discriminatory practices, But I don't know of any investors that have been 'hurt' or how so. I have heard about investors that DO support more pay disclosure though. They would just like to see them more refined and consistent... http://blogs.wsj.com/cfo/2012/09/25/investors-support-more-pay-disclosures-seek-consistency/I agree that this is a puzzling position for Buffet. It would make sense however if he had a specific internal issue in mind with that statement. It seems to me that the benefits of pay disclosure clearly outweigh the drawbacks that may lead to petty bickering at the top of corporations. He's referring to pay disclosures of executives as required by regulators. Lilly Ledbetter is unrelated as she wasn't a top executive. This is about CEO's, CFO's, COO's and the like. When you're talking about a corporation's management team, you're referring to top executives, not field managers. That idea that investors are hurt comes from Buffet's opinion that executives are overpaid and that disclosure rules contribute to the overpayment. Hope that clears up what he's saying. Edit: I'm not sure why you're bringing up rational theory when you've been highly critical of it.
Ledbetter is an example of how hiding pay can result in persistent and discriminatory wage disparities. Which level of management it happens at is rather insignificant.
So far it seems the suggestion is that knowing what people get paid makes people want more compensation... seems like a pretty silly argument to use to justify keeping pay secret?
As for rational theory my point is for people like Jonny and Buffett who think rational-choice theory is a good starting point, they are undermining it's rationale by suggesting some information (pay discrepancies at top levels) would be bad for a 'rational' person to know. (I don't know if jonny himself is suggesting this or just pointing out that Buffet did EDIT: it seems more clear that Jonny is just pointing out that Buffet said it. But I am curious whether you agree with his assessment or not Jonny why or why not?)
I can understand this using a bounded rationality model, or a predictability irrational model but keeping pay secret flouts a base assumption of rational-choice theory.
EDIT: Are there any numbers/data on how much disclosure inflates top executive pay or is Buffett just guesstimating?
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On May 06 2014 04:40 aksfjh wrote:
I'm puzzled, is it not also true that these boards that decide the pay could see the information and determine that they're overpaying their top executives? I don't see how this only flows in one direction...
Also, wouldn't this cause internal pressure within the company as well to hold down top manager pay?
Yes the information can absolutely flow in more than one direction. Buffet seems to think that its more powerful when it comes to increasing pay though.
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On May 06 2014 05:17 GreenHorizons wrote:Show nested quote +On May 06 2014 04:18 JonnyBNoHo wrote:On May 06 2014 03:54 GreenHorizons wrote:On May 06 2014 02:54 JonnyBNoHo wrote:Buffett Says Pay-Disclosure Rules Can Hurt Investors
Warren Buffett, the billionaire chairman and chief executive officer of Berkshire Hathaway Inc., said shareholders are harmed by rules that force companies to disclose the pay of top managers.
Executives who find that their colleagues are paid more may become jealous and press for higher awards, Buffett said today at Berkshire’s annual meeting in Omaha, Nebraska, where the company is based.
“That’s a good reason for us not publishing the salaries of, say, our top 10 managers,” the billionaire said. “It’s very seldom that publishing compensation accomplishes much for the shareholders.”
Buffett was responding to a question about whether the company would disclose the pay of more executives. Publicly traded U.S. companies are required to reveal certain compensation information in filings with the Securities and Exchange Commission, and insurance regulators collect pay data in some states.
Buffett, the world’s third-richest man, takes a $100,000 annual salary and is Berkshire’s largest shareholder. He said company leaders would be paid less if compensation were kept private.
“No CEO looks at a proxy statement and comes away saying, ‘I should be paid less,’” he said. less,’” Buffett said. “American shareholders are paying a significant price because they get to look at that proxy statement each year. SourceInteresting take given that it runs counter to what reformers have been talking about. I'm not sure how much Buffet thinks it will 'hurt' investors but it doesn't strike me as much. It also seems like intentionally hiding the compensation of certain employees precludes a normal sense of rational-choice theory and forces a 'bounded rationality' at best. One literally would be incapable of making a fully informed rational decision (like determining whether you should get a raise or work for a different company) without the rudimentary information of how their pay compares to peers who perform better and worse. Otherwise the boss could just lie. 'No, no, no, James I pay you far more than Jason' meanwhile Jason could be making 2x what James is making, but because his pay is secret, James has a false sense of the value placed on his performance by his company. So I can see how being able to lie like that can prevent one manager from wanting to be fairly compensated because he is oblivious to the disparity. And how that could benefit the shareholders by allowing them to pay less in salary than would be required if the disparity was known... But I have a hard time seeing why that's good for James or people like him who may be getting taken advantage of? Lilly Ledbetter would be a pretty good example of how that can play out. Lilly Ledbetter was a supervisor at Goodyear Tire and Rubber’s plant in Gadsden, Alabama, from 1979 until her retirement in 1998. For most of those years, she worked as an area manager, a position largely occupied by men. Initially, Ledbetter’s salary was in line with the salaries of men performing substantially similar work. Over time, however, her pay slipped in comparison to the pay of male area managers with equal or less seniority. By the end of 1997, Ledbetter was the only woman working as an area manager and the pay discrepancy between Ledbetter and her 15 male counterparts was stark: Ledbetter was paid $3,727 per month; the lowest paid male area manager received $4,286 per month, the highest paid, $5,236. Ginsburg dissent mentions pay disclosure as well. Justice Ginsburg wrote the dissent and read it from the bench, a rare practice.[8] Joined by Justices Stevens, Souter, and Breyer, she argued against applying the 180-day limit to pay discrimination, because discrimination often occurs in small increments over large periods of time. Furthermore, the pay information of fellow workers is typically confidential and unavailable for comparison. Ginsburg argued that pay discrimination is inherently different from adverse actions, such as termination. Adverse actions are obvious, but small pay discrepancy is often difficult to recognize until more than 180 days of the pay change. Ginsburg argued that the broad remedial purpose of the statute was incompatible with the Court's "cramped" interpretation. Her dissent asserted that the employer had been, "Knowingly carrying past pay discrimination forward" during the 180-day charging period, and therefore could be held liable. SourceSo I see how keeping secret the compensation of managers has been used to help hide discriminatory practices, But I don't know of any investors that have been 'hurt' or how so. I have heard about investors that DO support more pay disclosure though. They would just like to see them more refined and consistent... http://blogs.wsj.com/cfo/2012/09/25/investors-support-more-pay-disclosures-seek-consistency/I agree that this is a puzzling position for Buffet. It would make sense however if he had a specific internal issue in mind with that statement. It seems to me that the benefits of pay disclosure clearly outweigh the drawbacks that may lead to petty bickering at the top of corporations. He's referring to pay disclosures of executives as required by regulators. Lilly Ledbetter is unrelated as she wasn't a top executive. This is about CEO's, CFO's, COO's and the like. When you're talking about a corporation's management team, you're referring to top executives, not field managers. That idea that investors are hurt comes from Buffet's opinion that executives are overpaid and that disclosure rules contribute to the overpayment. Hope that clears up what he's saying. Edit: I'm not sure why you're bringing up rational theory when you've been highly critical of it. Ledbetter is an example of how hiding pay can result in persistent and discriminatory wage disparities. Which level of management it happens at is rather insignificant.
You aren't really going to have pay discrimination at the top level since everyone is working a different job (e.g. there aren't two CFO's).
So far it seems the suggestion is that knowing what people get paid makes people want more compensation... seems like a pretty silly argument to use to justify keeping pay secret?
Trying to push the pay of CEOs and other executives down is a public policy goal for a lot of people, particularly for those on the left.
As for rational theory my point is for people like Jonny and Buffett who think rational-choice theory is a good starting point, they are undermining it's rationale by suggesting some information (pay discrepancies at top levels) would be bad for a 'rational' person to know. (I don't know if jonny himself is suggesting this or just pointing out that Buffet did).
I can understand this using a bounded rationality model, or a predictability irrational model but keeping pay secret flouts a base assumption of rational-choice theory.
EDIT: Are there any numbers/data on how much disclosure inflates top executive pay or is Buffett just guesstimating?
You're throwing out a red herring. Neither I nor Buffet made rational choice theory a part of the argument.
And no, no numbers.
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Trying to push the pay of CEOs and other executives down is a public policy goal for a lot of people, particularly for those on the left.
Yes, keeping pay secret is just a silly way to accomplish that.
You're throwing out a red herring. Neither I nor Buffet made rational choice theory a part of the argument.
It's not a red herring. If you think rational-choice theory is valid, it doesn't make any sense to keep pay secret. One cannot simply set aside rational-choice theory in this specific instance because it is completely incongruous with the notion that keeping pay secret is a good thing to do and then use it elsewhere without coming off as completely fallacious.
And no, no numbers.
And until there is any data on this it's pretty much just hot air.
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Transparency is almost always better than secrecy. Giving the employee, shareholder, taxpayer more information about how much their position is worth on the open market may have inflationary pressure but it's usually worth it.
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On May 06 2014 05:51 GreenHorizons wrote:Show nested quote +Trying to push the pay of CEOs and other executives down is a public policy goal for a lot of people, particularly for those on the left. Yes, keeping pay secret is just a silly way to accomplish that.
OK, thanks for your opinion.
Show nested quote +You're throwing out a red herring. Neither I nor Buffet made rational choice theory a part of the argument. It's not a red herring. If you think rational-choice theory is valid, it doesn't make any sense to keep pay secret. One cannot simply set aside rational-choice theory in this specific instance because it is completely incongruous with the notion that keeping pay secret is a good thing to do and then use it elsewhere without coming off as completely fallacious.
What? No, no, no, no. Supporting a theory in context X does not mean that you must also support it in context Y.
And until there is any data on this it's pretty much just hot air.
Yeah, he was just giving his opinion and you can say the same for people on the other side of the argument.
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On May 06 2014 05:55 Wolfstan wrote:
Transparency is almost always better than secrecy. Giving the employee, shareholder, taxpayer more information about how much their position is worth on the open market may have inflationary pressure but it's usually worth it.
Look at that Wolfstan we agree on something. I knew it could be done  It does seem counter-intuitive that conservatives of any stripe or anyone really would really be against this type of disclosure.
The fact that the only argument against it so far is that it has inflationary impacts on top executive pay and this argument has no data or evidence that supports that conclusion seems strange. Even if it was able to be shown that this was occurring, I don't see any evidence that it would be significant.
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On May 06 2014 06:11 GreenHorizons wrote:Show nested quote +On May 06 2014 05:55 Wolfstan wrote:
Transparency is almost always better than secrecy. Giving the employee, shareholder, taxpayer more information about how much their position is worth on the open market may have inflationary pressure but it's usually worth it. Look at that Wolfstan we agree on something. I knew it could be done It does seem counter-intuitive that conservatives of any stripe or anyone really would really be against this type of disclosure. The fact that the only argument against it so far is that it has inflationary impacts on top executive pay and this argument has no data or evidence that supports that conclusion seems strange. Even if it was able to be shown that this was occurring, I don't see any evidence that it would be significant.
Buffet isn't a conservative.
Buffet didn't offer any data in his short comment, though he likely has some amount of evidence to support his conclusion. After all, he's likely been involved in many executive pay decisions. He also did offer some evidence - executives are using public pay data in their arguments for higher pay.
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Yeah, he was just giving his opinion and you can say the same for people on the other side of the argument.
Except the other side has data showing how pay inequities, CEO/top executive pay grossly outpacing others, and other CEO/top executive pay schemes have negative impacts.
So there is a clear and substantiated case to be made for why more disclosure is better. However this data, as you admit, doesn't exist on the other side of this debate.
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