Executive Pay v Company Performance? More Pay = Less profit

Performance for Pay? The Relation Between CEO Incentive Compensation and Future Stock Price Performance

Research* last year clearly showed that there is clear evidence that Chief Executive Officer (CEO) pay is negatively related to future stock returns for periods up to three years after sorting on pay. For example, firms that pay their CEOs in the top ten percent of excess pay earn negative abnormal returns over the next three years of approximately -8%. The effect is stronger for CEOs who receive higher incentive pay relative to their peers and stronger for CEOs with greater tenure. Our results appear to be driven by high-pay related CEO overconfidence that leads to shareholder wealth losses from activities such as over investment and value-destroying mergers and acquisitions.

And in September we had two excellent examples of this with our two mediocre managers of the month being both overpaid and incompetent.

VW and glencore

Our Membership Director at the Institute of Mediocre Management has asked me to reach out to other ‘C’ level executives who are also overpaid and out of their depth and who might needed friendly club where they can share their experiences with other like-minded buffoons.  We have a lot of Bankers as you would expect and good representation from the construction and telephone sales industries and of course a couple of ‘charities’ but all are welcome. You need to have a pathological fear of Mr Corbyn, an exaggerated sense of one’s own importance and abilities, and also proof of significant tax avoidance. The latter is important so that if you ever ‘show and tell’ so will we (smiley face).

Do remember also that most Management Gurus such as dear Dickie Branson, Big Al Sugar and that plonker on Dragon’s Den tell us all that to succeed you need to fail first and then learn from that. Here at the I.M.M. we have many of the world’s leading business failures and most have never tasted success but it will surely come. However they continue to invest millions of investor’s money into their madcap schemes hoping that the law of averages will work to their favour.

So if your current package is gross, your litany of bankruptcies immense and your ego colossal then join us now at the I.M.M. Because you’re worth it!

*Michael J. Cooper, University of Utah – David Eccles School of Business, Huseyin Gulen
Purdue University – Krannert School of Management, P. Raghavendra Rau
University of Cambridge

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10 Reasons to Stop Working So Hard

1. Quantity kills quality

2. Sleep matters

3. You suck when it counts

4. Your mood is a buzzkill

5. Your judgment is impaired

6. You’re setting a bad example

7. There will always be more work

8. You’re hurting your relationships

9. You’re screwing up your health

10. Most of the work is less important than you think

From: 10 Reasons to Stop Working So Hard | Inc.com.

Sleeping is for Wimps! Man up says the IMM and smell the Coffee

Here at the Institute of Mediocre Management we pride ourselves on our policy of looking after our esteemed members holistically. Not only do we want to see our colleagues do well fiscally but also we want to ensure their mental and physical well-being. After all, IMM members are the Elite, The Head Honchos, Those Who Shall Be Obeyed and therefore without them leading our World, it would cease to function in the way it does today.

An infographic is currently circulating showing how the top business people and politicians manage their sleep patterns and it’s clear that there is a wide differential in the amount of sleep taken.

HOW MUCH SLEEP DO YOU REALLY NEED?

HOW MUCH SLEEP DO YOU REALLY NEED?

The IMM’s Medical team investigated this research and discovered that those who get enough sleep are more likely to have better mental health and are less likely to be overweight, develop high blood pressure, raised cholesterol and Type 2 diabetes.

But they also discovered that if you cut sleep back to less than five hours a night for several days in a row, then your short-term and long-term memory, ability to focus, decision-making capacity, number processing, cognitive speed, and spatial orientation all start to suffer.

When I ran Widget European Enterprises , I personally introduced a corporate culture based around Sleep Deprivation and it didn’t hurt us a bit, apart from the litigation and the bankruptcy. It was a unique concept, which worked extremely well for W.E.E. as the resulting high turnover of junior executives, mainly from mental and physical breakdowns, allowed us to keep wages down and therefore increase profits.

Here is some of the guidance we gave to our up and coming leaders:

  • An ambitious manager should manage at least an 100-hour work week
  • Sleep should be restricted to less than five hours per night, so employees can be on call for longer.
  • Employees’ phones should be on at all times and answered at all times.
  • When you signed up, the small print advised that W.E.E. own you. Get used to it.
  • Stay Awake! Drink at least 10 cups of coffee a day! Snoozing is for Wimps!

For us, of course, the Numero Uno Executive Leaders, long days are not an issue. How else can we utilise our expense accounts? So we tend to burn the candle at both ends, with early breakfast meetings and dinners that run late, for days and days. And if like me you can’t get to sleep without some wind-down time in a lap dancing club then you may not doze off until 2 in the morning. Which can mean an average four hours of sleep a night for four or five days.

The IMM Medical team advises that Executives running this kind of schedule develop the same level of cognitive impairment as if they’d been awake for 24 hours, equivalent to legal drunkenness, and like a drunk, a person who is sleep deprived has no idea how functionally impaired he or she truly is. The results are obvious. Senior Executives may get angry at employees, make unsound decisions that affect the future of their companies, and give muddled presentations before their colleagues, customers, the press, or shareholders and generally offer bugger all value to anyone.

So no change there and no-one will notice any behavioural changes at all if we, the Masters of The Mediocre, have 4 hours or 10 hours sleep, so it’s BAU: Keep Calm and Carry On Oppressing the Masses.

HSBC Tax Avoidance – Urgent News for IMM Members

HSBC Tax Avoidance – Urgent News for IMM Members

As no doubt you are aware the Institute of Mediocre Management’s bankers, HSBC, are in the press accused of manifest skullduggery. The left wing socialist media outlet, the BBC, has accused the bank of ‘ helping wealthy clients across the world evade hundreds of millions of pounds worth of tax’. Leaked documents reveal details of almost 7,000 British clients where many of the accounts were not declared to the taxman.

We’ve had a quick check on our membership files and compared these to the 7,000 names and quite a few of you are on this list. So you’ll need your people and in particular the bean counters, to step up to the plate and prove they are worthy of the phenomenal salaries you pay them and help get this mess sorted out.

Stephen Green our financial advisor

STEPHEN ‘Nothing to do with me, I was just the Boss’ GREEN

The IMM’s Chief financial advisor The Hon Lord Stephen Green, Grand Vizier of Zurich and Esteemed Holder of the Golden Toblerone is unfortunately indisposed and not taking calls. However his assistant George Osborne will hopefully be available on the help line later on.

In the meantime the IMM suggest the following actions be taken.

[1] Write to your MP denying everything and pointing out that if the rich pay taxes the leadership of this country will depart to safer tax havens than the UK. And you might mention that evading taxes and fiddling expenses are errors of judgement rather than criminal offences.

[2] Point out to HMRC and the Government that they should be concentrating on the £2.6 billion of fraud and overpayments in the benefits system. These people are not important and do not contribute to the economy unlike us.

BENEFIT FRAUD IS THE BIG ISSUE, OBVIOUSLY

BENEFIT FRAUD IS THE BIG ISSUE, OBVIOUSLY

[3] Get over to Switzerland ASAP with a large suitcase and get your money out in cash. Then post the suitcase from there to a young relative and mark the customs documentation ‘Mega Monopoly Set’. Even if opened this should still get through. If not, the worst a minor will get for money laundering is an ice cream ban and the naughty step.

There is though a silver lining. The bank now faces criminal investigations in the US, France, Belgium and Argentina. But in the UK, where the bank is based, no such action has been taken. Also although the HM Revenue and Customs (HMRC) was given the leaked data in 2010 it has only identified 1,100 people who had not paid their taxes and almost five years later, only one tax evader has been prosecuted.

So, chop chop and on with the actions assigned. Fear not the Institute will continue to fight on behalf of all Mediocre Management and we will be holding our usual Tax Avoidance Tuesday gathering next week.

Trickle-down economics means the rich stay rich and the poor stay poor

According to The Independent’s economics editor Ben Chu, what would later be championed by the free-market right was actually first spun as a joke by one-time circus cowboy and humourist Will Rogers. At a time when the US was in the midst of the Great Depression he said:

Money was appropriated for the top in hopes that it would trickle down to the needy.

Trickle-down economics is the idea that reducing the tax burden on the wealthiest is good for the least wealthy, as the rich see their disposal incomes increase and therefore spend more on services that companies can reinvest and create new jobs.

It’s also completely wrong, claims a report out this week from former US Treasury secretary Larry Summers and shadow chancellor Ed Balls.

The report, from the Centre for American Progress, states:

Left to their own devices, unfettered markets and trickle-down economics will lead to increasing levels of inequality, stagnating wages, and a hollowing out of decent, middle-income jobs.

According to Summers and Balls, the only thing tax cuts for the rich create is a growing income gap, as the wealthiest members of a society do not necessarily ‘invest’ in it, they could just save their money for example.

This graphic helps explain the idea versus the reality.

Trickle Down

Once you realise that trickle-down economics does not work, you will see the excessive tax cuts for the rich as what they are: a simple upward redistribution of income, rather than a way to make all of us richer.

Ha-Joon Chang, economics professor at Cambridge University
What’s the alternative? The Summers-Balls report’s suggestion is simple: Higher wages for ordinary workers, increased tax rates for the super-rich and corporations, and the closing of international tax loopholes, with the money instead being spend on public infrastructure.

That doesn’t sound like too much, especially in a week when it was revealed that within 12 months the richest one per cent of the planet will be richer than the remaining 99 per cent…

Original article by Ben Chu (edited by i100 staff) 

Executive High Pay | Because We’re Worth It | Hug a Fat Cat in 2014

rich_fatcat_banker_or_businessman_with_a_pot_of_gold_0521-1001-2913-3608_SMU

2014 has been another successful year for we the management elite. One is reminded of that dear old Greek chap Aristotle who so accurately opined

For that some should rule and others be ruled is a thing not only necessary, but expedient; from the hour of their birth, some are marked out for subjection, others for rule.

(Aristotle made his fortune from the invention of the Kebab and never looked back)

According to the High Pay Centre[1]    In 2014, we have done rather better financially than expected and one might reasonably ask: ‘What Recession?’

Our executive pay has grown from 60 times that of the average worker to almost 180 times since the 1990s said their report.

The FTSE 100 Chief Executives are paid an average £4.3 million[2], equivalent to hourly pay of well over £1,000. Executive pay has increased by 74% over the past decade, while wages for ordinary workers have remained flat.

Top bosses now take home more in two and a half days than the average worker earns in a year so we are well on our way to our target of; 1 day’s work for us equals 1 year’s work for the Great Unwashed, which feels about right.

Of course we have to thank a few others for helping us rise to these glorious heights where we rightfully belong. Our Conservative Party colleagues, for helping us drive the little people’s wages down enabling our profits to rise and triggering our performance related bonuses. The Socialist lot for electing Ed as their top man, who is as effective as a non-exec in a remuneration committee and of course, UKIP who have managed to convince everyone that it’s immigration that’s at fault and why the country is in such a state rather that the mis-management of the banking, financial and other key industries by us the Fat Cats[3].

To be clear we don’t want Farage’s lot in power or else we are going to have to pay a living wage to some UK born and bred chap who actually has some rights.

So in this season of goodwill to all, let us put apart our differences and remember those less fortunate and poorer than us by raising a toast to all skint people everywhere who support us by their toil and strife and especially those who aspire to be like us and don’t rock the boat.

A Happy Xmas to You All

Dick

Notes:

1: A bunch of socialist malcontents mostly on the average wage

2: For the benefit of HMRC we actually earn £43,000 in the UK the rest is earned in

Lichtenstein

3. Fat Cats are very popular on YouTube as although they are a teensie bit selfish

underneath they are lovely and huggable, just like us really.

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