View Full Forums : House Backs Bill to Rein In Executive Compensation


Panamah
07-31-2009, 03:36 PM
Tuda will flip out...

House Backs Bill to Rein In Executive Compensation (http://www.washingtonpost.com/wp-dyn/content/article/2009/07/31/AR2009073102337.html?hpid=topnews)

Fyyr
08-01-2009, 05:03 AM
Where did the links go for embedding pictures in posts go?

Your link, has a pic of Barney Frank, as the lede pic.

That is f***ing awesome.

http://media3.washingtonpost.com/wp-dyn/content/photo/2009/07/31/PH2009073103881.jpg

Tudamorf
08-01-2009, 03:51 PM
Do you really think that giving shareholders an unenforceable protest vote against executive salaries will do anything to prevent financial institutions from taking risks?

Or that it would have done anything to prevent the housing crisis of 2008?

If so, you're as stupid as the House Democrats. Or maybe it's just the American way, to ignore the responsible party in a bad situation and simply go for the deepest pocket, just like in lawsuits.

The biggest reform Wall Street can make in executive compensation is simply to rename the term "bonus" to "salary". Because people outside of the industry don't understand that the "bonus" in financial institutions is the equivalent of the average person's "salary".

As for generally limiting executive compensation, you know my view. My Apple stock closed on Friday at $163.39. It was well over $200 a year and a half ago. In 1997 its value was about $4.50. There are about 896 million shares outstanding. Do the math, and tell me how much you think the man, who's almost entirely responsible for that difference, is worth.

Panamah
08-01-2009, 05:32 PM
That man did almost nothing compared to all the people who worked for him. Now the people who worked for that man, they did the work, they're the ones responsible for whatever growth that company experienced. But we don't give them any credit do we? Everyone one of them probably worked just as hard as the guy you worship, if not harder.

ToKu
08-02-2009, 02:52 AM
That man did almost nothing compared to all the people who worked for him. Now the people who worked for that man, they did the work, they're the ones responsible for whatever growth that company experienced. But we don't give them any credit do we? Everyone one of them probably worked just as hard as the guy you worship, if not harder.

Not everyone is a leader, all we do is punish those who strove to be top of thier industries. Punish those who broke the law doing so, not everyone.

But its all about perception. In hard times the common man feels we are getting ripped off when someone else is doing well and look for a way to bring them down to our level, rather then think of ways to get up to thiers.

All we are doing is lowering the standard of excellence in the country so that we can feel better about ourselves being closer to the "top."

Can we claim to be capitalists while at the same time punishing those who play the game best?

Tudamorf
08-02-2009, 04:23 AM
That man did almost nothing compared to all the people who worked for him.You're kidding, right?

All those people could not, on their own, increase the value of the company as much as he did. They proved it as Apple languished as a company, basically written off by the industry, with multi-billion dollar losses, until Steve Jobs took over in 1997. (By the way, in addition to being a founder of Apple, after his forced resignation Steve Jobs also founded the company that Apple bought, that wrote the software that later became the Mac OS.)Now the people who worked for that man, they did the work, they're the ones responsible for whatever growth that company experienced. But we don't give them any credit do we? Everyone one of them probably worked just as hard as the guy you worship, if not harder.A million janitors and secretaries aren't going to increase the share price one cent. Even if they get a gold star and an A+ for effort for working as hard as they can.

However, the right CEO can increase it nearly 50 fold.

That is why CEOs are paid as much as they are, and janitors and secretaries are paid as little as they are.

Fyyr
08-02-2009, 05:21 AM
I'm going to have to agree with Tuda on this one.

That company would be out of business. Every employee having had to find another job by now.

If not for Jobs.

I wonder what is going to happen when he dies.


BTW, if memory serves me correctly. The WWW was invented on a NeXT workstation. I'm quite certain that Berners Lee was using one when HTML was first written, and was the first WWW server.

Erianaiel
08-23-2009, 12:14 PM
Not everyone is a leader, all we do is punish those who strove to be top of thier industries. Punish those who broke the law doing so, not everyone.


Any economical system needs a brake. Right now the salary for executives is only limited by the speed at which they can bleed their company dry. That is not to say that all of them do, but enough to make it a problem.

You (in the generic sense, not you personally ToKu) can point at incidental situations where one man or woman indeed made that much of a difference to a company, but for every one of those there are tens if not hundreds who failed grotesquely, got rid of (with a huge bonus to keep them quiet) and then got hired by a new company for an even higher salary because companies do not speak openly of the failures of their executives.

In this case though, the reason is far simpler. It is impossible to explain to voters (to anybody really) why a company that requires billions of dollars in aid paid for by the taxpayers just to keep them from going bankrupt can then spend tens of millions of that money to reward those who are responsible for the fiasco. And then turn around and directly or indirectly cause hundreds of thousands of people to lose their jobs. It may be simple symbol politics, but the gesture has to be made if you do not want the people to burn down the local bank. With the bankers still in it.


Eri

Tudamorf
08-23-2009, 01:29 PM
You (in the generic sense, not you personally ToKu) can point at incidental situations where one man or woman indeed made that much of a difference to a company, but for every one of those there are tens if not hundreds who failed grotesquely, got rid of (with a huge bonus to keep them quiet) and then got hired by a new company for an even higher salary because companies do not speak openly of the failures of their executives.You're exaggerating, but you can say that about any employee. Except in the case of a CEO, their failures will be a lot more visible to the industry than those of the average person, and it will be a lot harder for them to do it.It is impossible to explain to voters (to anybody really) why a company that requires billions of dollars in aid paid for by the taxpayers just to keep them from going bankrupt can then spend tens of millions of that money to reward those who are responsible for the fiasco.Because there is already a legally binding contract under which they are entitled to those payments. The government can't suddenly swoop in and take people's stuff under the guise of an ex post facto law, and without just compensation. You know, the Constitution and all that stuff.And then turn around and directly or indirectly cause hundreds of thousands of people to lose their jobs. It may be simple symbol politics, but the gesture has to be made if you do not want the people to burn down the local bank. With the bankers still in it.What gesture has to be made to all those people who took out mortgages they couldn't possibly afford, and cause a large part of the financial crisis?

Tudamorf
08-23-2009, 01:52 PM
Any economical system needs a brake. Right now the salary for executives is only limited by the speed at which they can bleed their company dry.You're kidding, right?

Do you even know how much CEOs in large companies make, relative to the revenue of the company?

Erianaiel
08-23-2009, 03:00 PM
You're exaggerating, but you can say that about any employee. Except in the case of a CEO, their failures will be a lot more visible to the industry than those of the average person, and it will be a lot harder for them to do it.

I am not sure what you are trying to prove here. My statement was that there are many more executives who mess up badly and get rewarded for it so the company can get rid of them, than there are those who significantly contribute to the company's value. Even within Apple there are how many executives that have any significant contribution to the share values (and those are hardly the only measure of value, just the only one the american economic system is looking at), one or maybe two? Yet there are dozens who receive a 6 or 7 figure income and can not realistically justify that they -earn- it. As you yourself said, without jobs Apple had been bankrupt long before, so why do those executives who apparently do nothing for the continued survival of the company earn so much income? Your argument works both directions. But the reason is simple enough. They belong to the select group that decides the income for everybody in the company and even if they would for themselves agree they receive too much, their peers would not allow them to lower the income of the executives. That is what I mean with that there is no downward pressure on the income of the executive class (it is not quite a caste yet, but slowly and steadily getting there).

Because there is already a legally binding contract under which they are entitled to those payments. The government can't suddenly swoop in and take people's stuff under the guise of an ex post facto law, and without just compensation. You know, the Constitution and all that stuff.

There are two false arguments here. First that the constitution has anything to say about such a situation. The government can pass laws that would create an income cap on any group. They could even leave the salaries and bonuses alone and simply institute an income tax of 100 pct on any income over a certain limit.
The second is that you claim that the law was retroactive. It is not. It is about new contracts, not about existing ones.

What gesture has to be made to all those people who took out mortgages they couldn't possibly afford, and cause a large part of the financial crisis?

If you think about it for 5 seconds you should come to the conclusion that those people already feel plenty punished for their greed and shortsightedness. They were the ones who found themselves without home when their mortgages were foreclosed after all.

But the most telling reason why government regulation is needed, whether it is on income or in any other form, is that those bankers who almost collapsed the economy of the entire world have learned -nothing- from the disaster. Already they are back doing the exact same thing that caused the whole mess in the first place: pretending they can create risk-free loans through financial trickery.
There is an economic equivalent to the first law of thermodynamics (or there should be): In any closed economic system the sum of risk involved in all transactions withing a fixed timeframe is constant.


Eri

Erianaiel
08-23-2009, 03:00 PM
You're kidding, right?

Do you even know how much CEOs in large companies make, relative to the revenue of the company?

And this is relevant why?


Eri

Tudamorf
08-23-2009, 10:48 PM
And this is relevant why?You said that executives bleed the companies dry. But the reality is that their compensation is trivial when compared to total revenue.

Tudamorf
08-23-2009, 10:53 PM
My statement was that there are many more executives who mess up badly and get rewarded for it so the company can get rid of them, than there are those who significantly contribute to the company's value.How do you know this? Non-financial newspapers don't generally report when executives do a good job, only when they do a bad job. You're getting a very skewed sample.There are two false arguments here. First that the constitution has anything to say about such a situation. The government can pass laws that would create an income cap on any group. They could even leave the salaries and bonuses alone and simply institute an income tax of 100 pct on any income over a certain limit.
The second is that you claim that the law was retroactive. It is not. It is about new contracts, not about existing ones.Then I'm not sure what you're talking about. Most of the ruckus here in the past year regarding bonuses has related to those bonuses that executives got after the U.S. government bailed out their companies. However, those bonuses were contractually agreed upon ahead of time, and those executives were legally entitled to them.If you think about it for 5 seconds you should come to the conclusion that those people already feel plenty punished for their greed and shortsightedness.Why do they get a free pass? Just because they walked out of their homes and let the banks foreclose? They probably paid in total only a little more than they would have otherwise paid in rent, had they not bought a house to begin with.

Eridalafar
08-24-2009, 03:41 PM
/irony on

So now it is the perfect time to give a huge bonus to all of these CEO that have made bad decission because these decissions was making them gaining better bonus in the short time, but killing their compagny in the middle/long time.

It seem also the perfect time to protect all of these big investitor that have decided that they didn't need to read the small caracters on contracts and passed the lost on the small investitors that have given them their economy. At last these huge investitor can keep going to give money to the politics.

Also it is the time to save all of these to big to fall compagnies that are so big that they can be let to fail or our society will die. Also let them free from any rules that can make them to avoid failing another time if some CEO decide to get fast money again.

/irony off

Sorry, but in my book greed isn't good, it is bad. You need regulations to make sure that everything is running correctly, because as long that humanity exist they will have peoples that will want to money fast and easely. Improving his situation isn't green, but getting a lot more that you need to live while other don't have what it take to live can be seen as the begining of greed.

Creator of a compagny that is making most of the risk merit his reward. But when someone get to be the CEO because of who he know more of what he can do, they are an huge troubles that are incoming (will you let an horse's judge to be responsible of saving your live if an national's disaster hapen??).

Eridalafar

Tudamorf
08-24-2009, 04:37 PM
Sorry, but in my book greed isn't good, it is bad. You need regulations to make sure that everything is running correctly, because as long that humanity exist they will have peoples that will want to money fast and easely.Like the home buyers who took out mortgages they knew they couldn't afford, on the premise that their property values are going to continue going up?

Why shouldn't those people be held accountable for their greed? Why shouldn't they be the subject of regulation?/irony on

So now it is the perfect time to give a huge bonus to all of these CEO that have made bad decission because these decissions was making them gaining better bonus in the short time, but killing their compagny in the middle/long time.Maybe you just misunderstand what "bonus" means in the financial world.

It's not like the "bonus" a boss gives his secretary for doing a particularly good job.

It's just a form of variable compensation that is agreed upon ahead of time, and to which the executives are already entitled.

As I've said in other threads, the biggest reform the financial/insurance industries can make is to simply rename the "bonus" to "salary". People are getting upset simply on account of the connotations that come with the word "bonus," while ignoring the reality of the situation.

Palarran
08-25-2009, 01:24 AM
Sure, the executives are entitled to their compensation. Their companies, however, are not entitled to bailout money. It seems perfectly valid to require executives to voluntarily give up compensation in exchange for the company receiving bailout money.

Tudamorf
08-25-2009, 03:47 AM
Sure, the executives are entitled to their compensation. Their companies, however, are not entitled to bailout money. It seems perfectly valid to require executives to voluntarily give up compensation in exchange for the company receiving bailout money.The executives, and the company, are separate parties.

The company can't unilaterally give up its employees' compensation.

Of course the employees can voluntarily give up their salary at any time, and many of the AIG executives did just that, to improve their image.

Erianaiel
08-25-2009, 10:41 AM
The executives, and the company, are separate parties.

The company can't unilaterally give up its employees' compensation.
Of course the employees can voluntarily give up their salary at any time,

Funny enough it can unilaterally force its non-executive employers to 'voluntarily' give up their compensation.
Happened often enough to not be a fluke that the employees got told that a quarter or so of them would get sacked, that the rest would have to accept an income cut of a third plus work ten hour shifts instead of eight, and that if they did not accept that 'voluntarily' the entire company would go under and everybody would lose their jobs.
Amusing that the same reasoning does not apply to the ones pulling the strings in the company...

Sorry Tudamorf, but those bankers let themselves be blinded by their greed and arrogance. They messed up on a yet unprecedented scale and needed the entire population (through government intervention) to help get them out again.
And they have yet to demonstrate any indication that they realise how badly they messed up and how responsible they are for the trillions of dollars that had to be used to stop the situation from getting worse. Loans that we will be paying off for decades to come I might add. (unless more countries go the inflation route to get out of their debts, in which case the next even worse economic crisis is about five years around the corner).

The other half of the greed bubble that caused this mess, people who got talked into believing they could simply pay off their old mortgage by taking on a new one indefinitely... Unless the bankruptcy laws in the USA are -vastly- different from the rest of the world having the bank foreclose and sell your house does not cancel the remaining debts. If the house is sold for half your mortgage you still have to pay back the bank the other half somehow. Not to mention that hundreds of thousands unemployed americans, and millions of people world wide are soooo feeling they got of lightly from this economic crisis.


and many of the AIG executives did just that, to improve their image.

Well, yes. They also were one of the very few who did. And only after the plebs were standing outside the gate with pitchforks and torches. Metaphorically speaking.


Eri

Tudamorf
08-25-2009, 01:14 PM
Funny enough it can unilaterally force its non-executive employers to 'voluntarily' give up their compensation.
Happened often enough to not be a fluke that the employees got told that a quarter or so of them would get sacked, that the rest would have to accept an income cut of a third plus work ten hour shifts instead of eight, and that if they did not accept that 'voluntarily' the entire company would go under and everybody would lose their jobs.Those employees have NO contractual right to maintain their job or their level of pay. They are generally employed at will, meaning they can be fired at any time.

The executives were already entitled to that pay through preexisting contracts, and the companies had no discretion in the matter.Sorry Tudamorf, but those bankers let themselves be blinded by their greed and arrogance. They messed up on a yet unprecedented scale and needed the entire population (through government intervention) to help get them out again.The exact same statement applies to the irresponsible home buyers.

So I ask you again, why don't you blame them?Unless the bankruptcy laws in the USA are -vastly- different from the rest of the world having the bank foreclose and sell your house does not cancel the remaining debts.Unsecured debts mean so little, they might as well not exist at all.

And that still doesn't excuse the initial behavior, or explain why you don't blame those people who are actually responsible for the mess (not "half", the actors with primary responsibility), rather than those who simply relied on those people responsible.

palamin
08-25-2009, 02:44 PM
Most people don't understand 5%. Sure they can load up 0.05 and do some math, but, they do not understand 5%. Consider in 1986 when they did the housing reform act and the law went active in 1988 which led to the 5% speculative increases every year. Obviously, with the inflation rates on wages at the time, it was not going to keep up with the speculative increases. Let's take the time to figure this one out so it is understood. The average home price in 88' was around 70 k or so, while it is true I pulled that number out of my ass, but, it seems plausible. The average wage was around 30-35k a year for a household would be pretty close, so, let's say 35k.

For testing purposes those numbers will work just fine to help you understand 5%. Rounding up of course to the nearest 100th, from there, take another 5% increase, do this until 2001, when it spikes to 7%, stopping at 2008. You should have a number around 190,750 ish. To understand that, the prices nearly tripled in 19 years. Or I could have misunderstood when the rates came in effect with the speculation, in which case, it definately tripled in prices. To further understand that, the wages went from 35k to 50k as an average over a 12 year period where the average wage flatlined at 50k per household in 2000.

Now, sloppiness of the equation for which I apologize, for using plausible numbers to express a point. But, they serve a purpose to express, prior to the economical softening that took place late nineties, early 2000, wages were not exactly matching the increases in housing. And yet they continued the increases in housing, even so far as to add 7%. Meanwhile, should the wages have not flatlined, they would have led to the same result, whether in 2006 or 2014.

Eridalafar
08-25-2009, 07:01 PM
Like the home buyers who took out mortgages they knew they couldn't afford, on the premise that their property values are going to continue going up?


So the bankers that have say to them that it was ok are totaly innocent then? These bankers didn't have any acountability as it was to the assurers to accept on not the transaction, no? The same assurors that was making their decission was based on the recommandation of the first bankers.....


Why shouldn't those people be held accountable for their greed? Why shouldn't they be the subject of regulation?Maybe you just misunderstand what "bonus" means in the financial world.

It's not like the "bonus" a boss gives his secretary for doing a particularly good job.

It's just a form of variable compensation that is agreed upon ahead of time, and to which the executives are already entitled.

As I've said in other threads, the biggest reform the financial/insurance industries can make is to simply rename the "bonus" to "salary". People are getting upset simply on account of the connotations that come with the word "bonus," while ignoring the reality of the situation.

Yup, I know that bonus for a boss mean a better pay in a way that he will not need to pay taxe on it or a lot less and that this bonus is automatic with no need to perform attached to it.

Eridalafar

Panamah
08-25-2009, 07:31 PM
One of the biggest issues we have is that people were rewarded for taking huge risks that looked good in the short term, but were horrible in the slightly longer term. Long after they've got their bonus, the loans go bad, company loses money and the people taking huge risks are laughing all the way to congress, where they ask for a bailout.

Tudamorf
08-25-2009, 09:44 PM
So the bankers that have say to them that it was ok are totaly innocent then?I didn't say they were totally innocent. Certainly there were some who exercised poor judgment by failing to appreciate the risks of these investments.

However, the irresponsible home buyers are still the ones primarily responsible. They were the ones who bought something they couldn't afford, gambling on a future payoff. They were the ones who didn't pay their bills when that payoff never materialized.

Now, why do you ignore, or even sympathize with, the ones who were primarily responsible, while vilifying the ones who were less culpable?Yup, I know that bonus for a boss mean a better pay in a way that he will not need to pay taxe on it or a lot less and that this bonus is automatic with no need to perform attached to it.Bosses pay a lot more in taxes than their employees do.

And lower-level employees have far more rights under the law than higher-level employees do.

Tudamorf
08-25-2009, 10:26 PM
One of the biggest issues we have is that people were rewarded for taking huge risks that looked good in the short term, but were horrible in the slightly longer term.You mean, with the benefit of your hindsight.

Panamah
08-26-2009, 04:31 PM
In my case hindsight is 20/20. But there are folks that saw this coming.

Tudamorf
08-26-2009, 04:58 PM
In my case hindsight is 20/20. But there are folks that saw this coming.Yes, with the benefit of your 20/20 hindsight it's pretty easy to cherry pick those "folks that saw this coming" and label them as visionaries, as opposed to people who speculated like all the others did but just happened to be right in the end.

The real question is, can you pick out the visionaries WITHOUT hindsight?

Panamah
08-27-2009, 11:03 AM
Businessweek: CEO Pay: Is It Still Out of Sync? (http://www.businessweek.com/magazine/content/09_36/b4145000403938.htm)
They've had an average of a 7.5% paycut... aw! *plays the widdle wiolin*
But there are some notable exceptions: Michael Jeffries of Abercrombie & Fitch (ANF) saw his pay climb 39% last year, even though the retailer's stock fell 72% and it has trimmed staff. (Abercrombie declined to comment.)

Tudamorf
08-27-2009, 01:19 PM
Hint: In your Communist Utopia where everyone gets the exact same compensation no matter what they do or how good they are (even people who are too lazy to work at all), none of these companies would ever have been founded.

Palarran
08-28-2009, 02:00 AM
It's possible to have a system between the two extremes, you know.

Panamah
08-28-2009, 01:39 PM
It's possible to have a system between the two extremes, you know.
But what about the slippery slope everything falls down? :dance:

It's like everyone's ideas are built on top of a big old hill with steep decomposed granite sides and boy, you put one foot on the edge of that hill and you're going to go plummeting to the bottom of the slope like the best anvil you can buy from Acme.

Tudamorf
08-28-2009, 02:10 PM
It's possible to have a system between the two extremes, you know.Not really.

When you limit the amount a privately-owned company can pay a private individual for mutually agreed upon services, you've already crossed the line.

There is no justification whatsoever for the government to place arbitrary caps on CEO salaries, just because Communists like Panamah don't like rich people.

Granted, there are special situations, for example when the government bails out the company. But what Panamah, Nancy Pelosi, and the like propose goes against the very grain of the Constitution.

Communism has never worked on a national level and unless you alter human DNA and instinct, it never will.

Panamah
08-28-2009, 02:51 PM
For someone who argues that public health care is not communism you're sure fast to play the communism card when it suits you.

We have all kinds of rules that apply to private companies and they make a lot of sense. Rules to prevent monopolies, rules to prevent price fixing, rules to prevent hiring discrimination based on certain things, rules about disclosing things to employees and investors. None of those has plunged us into communism.

It makes sense to put in place some rules so that boards of directors and executives can't collude to defraud their investors by the washy-washy little deals about sitting on each others boards to inflate each others income. Wouldn't you agree to that?

Europe is reigning in excessive pay and they're not plunged into communism.
http://www.nytimes.com/2009/02/07/business/worldbusiness/07bonus.html

I think it'd be a good idea to put in a 5 or 10-year delay on big bonuses. You get stock that'll vest in 10 years. That should make people look down the road a little bit and not make decisions based on short term outcomes.

Tudamorf
08-28-2009, 04:04 PM
For someone who argues that public health care is not communism you're sure fast to play the communism card when it suits you.Just because I think health care should be a socialist function, does not mean I think everything should be run that way.

Health care is about as different a situation from CEO salaries as you can possibly get.We have all kinds of rules that apply to private companies and they make a lot of sense. Rules to prevent monopolies, rules to prevent price fixing, rules to prevent hiring discrimination based on certain things, rules about disclosing things to employees and investors.All of those rules are designed to protect third parties from real loss.

You want to go further, and impose restrictions that protect no one but rather serve to restructure society so as to remove the distinction between rich and poor.

That's Communism.

It doesn't affect me one bit if company X gives CEO Y a compensation package of $Z. Unless of course I'm a shareholder, in which case I have a democratic say in the process.It makes sense to put in place some rules so that boards of directors and executives can't collude to defraud their investors by the washy-washy little deals about sitting on each others boards to inflate each others income.There are already PLENTY of rules and regulations in place to prevent a breach of fiduciary duty.

Not to mention the shareholders can vote out the guys in charge if they're doing a bad job.

Don't try to cloak this in terms of collusion and fraud. What you really want is to punish rich people by taking away their money, because you think they are no more valuable to society than any other person is.

You're wrong. Proven wrong, through history.I think it'd be a good idea to put in a 5 or 10-year delay on big bonuses. You get stock that'll vest in 10 years. That should make people look down the road a little bit and not make decisions based on short term outcomes.If that's a good idea, the company can implement it (and they do implement variations of that idea).

And the shareholders can vote on it, democratically.

We don't need your Communism to implement good ideas.

Eridalafar
08-31-2009, 11:47 AM
You're wrong. Proven wrong, through history.If that's a good idea, the company can implement it (and they do implement variations of that idea).

And the shareholders can vote on it, democratically.

We don't need your Communism to implement good ideas.

They will not as it will make the compagny less interesting from futur CIO point of view. Will you work as CIO for a compagny that will give you YOUR bonus that have rules that make that any moron CIO after you can make decissions that will make all the good thing (and YOUR bonus) a null thing?

No, unless someone (the invisible hand, or the governement) make it a rules for everyone.

Eridalafar

Tudamorf
08-31-2009, 01:21 PM
They will not as it will make the compagny less interesting from futur CIO point of view. Will you work as CIO for a compagny that will give you YOUR bonus that have rules that make that any moron CIO after you can make decissions that will make all the good thing (and YOUR bonus) a null thing?I'm not sure what you mean.

Delayed vesting of stock options is a very common feature of executive compensation, because it aligns the employee's interests with the company's interests. I'm not aware of any executives who have ever quit over it, and I'm not aware of any company that doesn't have it.

It was implemented because it was a good idea, and democratically agreed upon, not because some outside dictator forced it on the company.