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Executive Compensation and Libertarianism's Slave Morality

As CEO of AOL, Randy Falco purchased Bebo for $850 million.  Bebo was a disastrous purchase, and is going to be sold at a substantial loss.  For all of his hard work in costing AOL billions, Randy Falco was given an $8.5 million bonus. CEOs are hugely compensated through acts of fraud and dishonesty.  Here is how the scam works:  1. The Board of Directors, usually cronies of the CEO (often hand picked by him) forms a compensation committee. To appear ?objective,? the committee hires an outside compensation consultant. 2. The compensation consultants are themselves well paid whores, who rather than turning tricks outside the Holland tunnel, offer up absurdly generous comp package. They deliver what they are paid to: They provide cover for the boards to make an otherwise indefensible giveaway of shareholder monies in the form of cash and stock options...continue to full post

Full post as published by Crime & Federalism on April 08, 2010 (boomark / email).