Opinion

The Great Debate

Supersize salaries: How much is that CEO worth?

california combo

The disparity between what chief executive officers earn and what their employees earn continues to grow exponentially. CEO pay levels have increased dramatically for more than 20 years. Pay levels for workers, however, have stagnated. This is a much-cited statistic. But now a proposed bill in the California state Senate aims to do something about this.

Two state senators want to make sure that companies based in California pay a price for granting super-sized salaries to their CEOs. Businesses that reward their top officials with outlandish bonuses and salaries would be forced to pay a special tax.

ellison -- small unhappyOracle CEO Larry Ellison, for example, was paid $78.4 million in 2013. If the median pay for all Oracle employees, including contractors and non-U.S. workers, is less than $200,000 (roughly one four-hundredth of Ellison’s pay) — and my guess would be it is — under the new law the company could soon be paying a 13 percent state corporation tax rate, rather than its current 8.84 percent.

The ratio between the pay for a company’s CEO and the median pay of all other employees — known as the CEO/worker pay ratio — has been getting a lot of political attention lately. The most contentious component of the Dodd-Frank financial reform bill has been the CEO/worker pay ratio disclosure requirement — not Say on Pay (the right of shareholders to vote on executive pay), or financial oversight agencies, or creating the Consumer Financial Protection Bureau or even initiating the Volcker rule. More letters have been written by more corporations, shareholders, lawyers and consultants to the Securities and Exchange Commission than ever before,  both supporting the disclosure and fighting against it.

The corporate horror that greeted this part of the bill — which requires companies to disclose by how much the CEO’s pay exceeds that of the median workers’ pay — was extreme. Judging by the reaction, the figures are likely so startling that no one wants them made public.

from Stories I’d like to see:

The Oracle Oregon fiasco, crying wolf on an Obamacare tax, and anointing the ‘Politico 50′

1. The Oracle Oregon fiasco:

We all know by now that the dominant story line of the Obamacare website’s failed launch is that the federal government is terrible at doing high-tech projects -- let alone one that involves the e-commerce wizardry that has made Silicon Valley the envy of the world.

But it turns out that one state exchange to sell Obamacare insurance plans has had an even more disastrous launch than the 36-state HealthCare.gov. It’s CoverOregon.com -- the website for the Oregon exchange.

In fact, as this Associated Press story notes, last week state officials cancelled an advertising campaign to get people to sign up at CoverOregon.com because the website still isn’t up and running.

Apple and Samsung’s cone of silence

Apple and Samsung, you might have heard, have spent the last many months in a California courtroom haggling over who violated whose patents. At the end of August, Apple was awarded more than a billion dollars in damages by a jury, and the Samsung is now claiming jury misconduct. Just last week a U.S. appeals court threw out the judge’s ban on Samsung’s Galaxy Nexus phone. The whole situation is, really, turning into a bit of a confusing mess.

Also messy: a lesser-known but hugely important struggle among Samsung, Apple, and those members of the press trying to write about the court battle. While otherwise adversaries, the two companies have joined forces to keep some of the evidence in the case off the public record. But how much secrecy in the Apple v. Samsung proceedings is too much for the public to tolerate? It’s a meta legal question, and one that might not have the same billions directly at stake as the main event. But the outcome of the dispute about the transparency of our courts is central to understanding the future of these big tech trials. And there will likely be plenty more of those.

The question at stake is whether the tech firms will be allowed to tie up the courts with their business disputes while engineering it so they don’t face the full scrutiny of a truly public trial.

Sun software is the tail wagging the dog

Eric Auchard– Eric Auchard is a Reuters columnist. The opinions expressed are his own —

When Oracle agreed to buy Sun Microsystems for $7.4 billion in April, the headlines made much of the software maker’s decision to enter the computer business 30 years late. At less than 10 per cent of sales, Sun’s software business seemed an afterthought.

But Sun’s software is now center stage after European competition regulators said on Thursday that they would withhold approval for the deal until they finish probing the impact of the Oracle-Sun merger on the database software market. The decision means the transaction faces at least a four-month delay, pushing it into early next year.

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