Price of gas. Sorry, I have to.

[Ken Weaver]

So this makes him, or any CEO for that matter, worth the outrageous salries and retirement compensation they get? Used to be CEOs made about 5 times that of the average worker; now it's 25-30 times.

That is more outrageous to me than the price of gas! We've had it easy in the US while other countries paid many times what we did per gallon for many decades (Ray et al, when was the last time you paid less than $1 US per gallon?). So we got sloppy - gas guzzling SUVs driven miles to work by one person, sprawling suburbs that demand miles of commuting, no decent rapid transit in most cities, etc. And who in the world needs a Hummer?

I couldn't agree more Doc, seems like there's a total disconnect between productive management and leadership and compensation, regardless of the sector or industry.

As an aside, I teach a course on Science, Technology and Society to college freshmen. Energy techology and policy was one of our topics this term and you'd be surprised how hard it was to get them into it. It was also surprising how many (the wide majority) who only whip out M&D's credit card whenever they want gas regardless of the price.

[Warren]

Larry, I have to argue your point about who paid for the first lift of gas to the new station. I'm betting the bank did and they charged the station owner points for doing it. The same way they charged him for the money to lease or buy the land, erect the building, and all of the other attendant costs of opening a new business. I'm also betting that the station owner passed on as much of the cost of the loan to you as he could, plus a little so he could pay his home mortgage, feed and clothe his family, etc.. And every other customer paid the amount to cover his interest, taxes, etc.

[Deadhead]

Larry, I have to argue your point about who paid for the first lift of gas to the new station. I'm betting the bank did and they charged the station owner points for doing it. The same way they charged him for the money to lease or buy the land, erect the building, and all of the other attendant costs of opening a new business. I'm also betting that the station owner passed on as much of the cost of the loan to you as he could, plus a little so he could pay his home mortgage, feed and clothe his family, etc.. And every other customer paid the amount to cover his interest, taxes, etc.

And when his loan was paid in full, he didn't lower his prices. Instead, he was able to pay himself a little more and get a bigger house or a new car. Or he plowed the money back into his business and offer more products or convenience services to his customers.

[Joe Lyddon]

Public outrage at Exxon CEO's $400 million paycheck might get more attention, but he's making money for his stockholders.

There is not a man on earth that is worth a salary of 400 million $ per year!

That man is NOT Making Money... he's stealing it... (IMHO)...

By paying him 400 mil., he is also robbing the stockholders of dividends!

I am not the only one who thinks so...
http://apnews1.iwon.com//article/200...D8H81I304.html


There are crooks and there are Legal Crooks... I don't see how they can sleep at nights!

Not too long ago, we had the same type of screwing going in Calif. and Electricity! Some people were in favor of it (they didn't live here!)... Others were not... Final outcome? Greedy CROOKS screwing us the best way they could! Oil prices?! Same ole same ole...

It's all planned... and it's VERY political whether we like it or not!

[Russianwolf]

This standard practice across the board in all kinds of industries and retailers.
When I worked at WallyWorld the first thing in the morning that got checked after sales and payroll was price changes. Can you imagine the storage problems if you did keep everything seperate? " Wait! you can't put those together, they cost different." Or "We can't fill our tanks untill they are empty because the cost is different."

LIFO - Last in First Out

Buy 10000g @ $2
Sell 5000g @ $2.5
Buy 5000g @ $3
Sell 5000g @ $3.5
Sell 5000g @ $2.5

BUT... most places don't use this as it UNDER values the inventory on their reports. If you just go through the 1st four lines, the remaining inventory is $10k, but if you use FIFO (First In First Out)the inventory is $15k. which would the investor (bank) rather see?

One of the major problems in the industry is they are not consistent in the meathods they use for accounting. They use one meathod for reporting one thing and another for reporting something else, they choose based on which will make the particular report look better.

[AlanJ]

Disclaimer: I own Haliburton and Exxon stock

There's a lot of angst in this thread and in the general community aobut gas prices.. but there's a lot of justification for the current pricing.

There has hardly been a new refinery built in the past 20 years in this country because the greenies (and local residents) have squashed just about every oil company plan to build one. Older, less efficient refineries have closed down (or been forced to close). Total refining capacity has been reduced. Because of this, when supply tightens, as is happenning now, normal market pressures push the price up. Oil companies are investing more than ever in new exploration and technology and want (need) a return on that investment.

In short, 20+ years of neglect and denial have now come home to roost. The rest of the world has been paying the price for a long time.. The US is finally catching up.

[Joe Lyddon]

Disclaimer: I own Haliburton and Exxon stock

... when supply tightens, as is happenning now, normal market pressures push the price up.

aka Price Fixing... OPEC reducing production to drive prices up... etc.!!!
(and they admit doing it!)

You were smart to buy their stock!

Oil companies are investing more than ever in new exploration and technology and want (need) a return on that investment.

IMHO... pure propiganda... & BS...
They have had their rings through a lot of noses for many many years...

All of this has been planned for years... The plan is just unfolding and is being executed...

If you want to call it
"In short, 20+ years of neglect and denial have now come home to roost. The rest of the world has been paying the price for a long time.. The US is finally catching up.", so be it...

If you think I'm bitter, you're right!

I've been watching this crap for a long long time... I've seen other crooks get caught doing this type of stealing... this is nothing new... Just more eliquently executed because they have more money to spend on a SUPER plan to execute!

[maxparot]

There has hardly been a new refinery built in the past 20 years in this country because the greenies (and local residents) have squashed just about every oil company plan to build one.

Actually no oil company has attempted to build a plant that can meet EPA regulations. THey have all attempted to get some form of waver or exemption and in each case have been turned down or stopped by local gov't. It's a big game to them. (the blame game) I know who is at fault the greed of these companies is without bounds. Unfortunately we presently have a federal gov't that puts on a good show for the working class but bends over backwards for big business. It's time we all realize the job of the gov't is not business but to protect the individuals from the masses. Let's make sure that elected officials know what their job is and do it right.

[Warren]

I'm surprised that this thread, as political as it is, is allowed to continue. That said, it is civil and very fascinating.

Joe: I don't understand this fascination with what people's salaries are. I'm a stock holder in Exxon-Mobile and I think Mr. Raymond was worth every penny we paid him. Mr. Tillerson is also worth what he is being paid. I have a vested interest in his salary and benefits. I feel the same about the salaries paid to the officers of BP. You're only worth what someone will pay you. You don't set your value, the market place does. If seasonal workers from Mexico quit coming and the job still needed to be done, the market place will establish the value of the work. Of course, the price of fruit, vegatebles, etc. will rise along with the increases costs of doing business a locals won't work as cheap. I don't know any sucessful businessman who doesn't pass his taxes and other costs directly to the buyer.

I read the info in the site you suggested. The last people I want economic advice from are self-serving politicians. There are very few people in Washington, D.C. who can be called statesmen. Fewer still probably have any grounding in economics. The vast percentage are only interested in generating votes and keeping their position.

[mdutch]

My other car runs on wood.

Seriously, the NIMBY effect HAS reduced our refining capacity, but increasing that isn't the real answer. Gas prices will continue to rise as long as people continue to pay them. When the price goes up -- efficiency of new cars goes up and alternative energy sources get funded. And that's a good thing.

We should be using oil to lubricate our machines, not to power our transportation. West Texas used to pump oil. Now it generates wind-powered electricity (which is becoming a big business out there.)

Aside from the inevitable financial hardship it will cause, I hope gas hits $4-5/gal. It's that kind of economic pressure that will make the average American get serious about saving energy again. We did it in the 70s. We can do it even better now.

[Joe Lyddon]

Warren,

Exactly what did those two people do to be worth 400 $mil per year & whatever??

IMHO legal crooks taking advantage of the Co's & stockholders.

There are so many hours in a day, week, month, year...
... I still say "No one is worth that much of a salary"... even if he could work miracles!

If they were smart enough to "make a deal" for a percentage of the proceeds, that makes them shrewd operators that know what they were doing... they "set up" the job! They didn't earn anything... they did it the other way...

My legs are getting tire of being on this soap box...

This subject is highly crooked and political whether we like it or not... It's the truth.

I'm getting tired... gnite...

[mdutch]

Exactly what did those two people do to be worth 400 $mil per year & whatever??
[snip]

Short answer -- they steered their companies to high profits.
I'd like to point out that being "worth" $400M/yr and being "paid" at $400M/yr are totally different. It's the vicious cycle of CEO-Salary-Pressure. Stockholders expect profits and dividends. CEO's are charged with keeping the stock price up. If they don't, they're usually out pretty quick.

Because of this revolving-door policy, there's a lot of pressure for Boards to court top people as CEOs with high salaries. If you don't play that game, you don't get the top people, and your stockholders fire you the next chance they get to vote their proxy.

It's like the big cities giving tax-abatements to big corporations to entice them to HQ in their fair city -- the money "spent" to get them there is returned ten or a thousandfold in economic growth due to their presence.

That said, I don't LIKE the system either. But show me how you break the cycle.

[Warren]

Joe, we're starting to beat a dead horse. I understand that you don't think Mr. Raymond or Mr. Tillerson are worth it. But, you didn't hire them. They run or ran, a multinational company worth billions of dollars. They ran/run them sucessfully, kept them healthy and growing and making money for the owners, the stockholders. In the case of ExxonMobil they have followed every legal channel possible to reduce the award for the Valdez oil spill. Which believe it or not is a good thing from my standpoint. ExxonMobil has already paid millions of dollars in a totally unnecessary cleanup effort (mother nature is much more efficient at that than we are.) and made a lot of people a ton of money. Both of them have guided the company to the satisfaction of the board. The acquisition of Mobil was a positive action. They've dealt well with OPEC and all of the little kings, sultans, and what not, who actually control the flow of crude.

Neither of them probably worked as little as 40 hour in a week during their leadership of the company. Would I take the job for the salaries, benefits, and vitriol? Sure! Would I last two weeks? Doubt it. Sixty to seventy hours a week is about my limit. And, I wouldn't want to work that hard more than a couple of weeks at a time. Went I went on vacation I didn't want to be interrupted. And, while I was a cop I didn't mind being responsible for people and their welfare, I wouldn't want thousands of employees totally dependant on my performance for a pay check. I could handle the pressures of police work. My decisions affected only a few people at a time ten hours a day, four days a week. The CEO of Exxon is "on" 24/7. Nope, I guess I wouldn't take the job after all. Couldn't do it.

[Warren]

MDutch: You and Ken are pretty articulate and state the situation better than I. It's an interesting and sometimes foul situation but, it's the market and changing that would only take us down to the level of France or Germany. The market has to adjust to pressures. Whether it be the price of crude or the unwillingness of the American public to pay higher prices. With China and India increasing their consumption the price of crude will stay high unless more comes becomes available, particularly in non-OPEC nations. I doubt that we can convince the Saudis to release more oil and lessen the pressure. That would probably destablilize their tottering dynasty even further.

There's no alternative fuel available for vehicles which would be available as cheap as gas and people don't want to pay for the hybrids until they perform as well as hoped. Hybrids in Alaska, and I suspect other cold climes, perform very poorly. So . . . until something as cheap and dependable is available we are stuck sucking oil out of the ground. I figure the status quo is going to be maintained for many many more years. I doubt I'll live so long as to see alternative energy driven automobile overtake gasoline operated. I'm, almost 60 if anyone cares. I suspect nuclear power is the fastest way to reduce our dependancy on oil.

This has been informative and entertaining but, it's time for a Jamesons and then to bed.

[billwmeyer]

Warren,
Milk, dry milk and butter are traded on the Chicago Mercantile Exchange.

http://www.cme.com/trading/dta/del/rth.html

In my opinion, if the electric company or gas company showed the kind of profits that Exon did, we would be getting rebates on our utility bills, because of overcharging. I am no big fan of regulation, but in monopoly or near monopoly situations, that is the only way to protect the consumer. I like the adage about the dog peeing on his leg and saying it was raining. I say this:

If it looks like a duck and sounds like a duck it is a duck.

If it looks like I am getting screwed... etc.

Gas prices affect everything. I wonder how much the price of gas has gone up, because gas is so high that the delivery costs go up so the price of gas has to go up, then the delivery costs go up... etc.
Bill