Richard Thaler Quotes

I don't like what's going on with the executive compensation.

Contrast 1968, when the CEO of General Motors took home, in pay and benefits, about sixty-six times the amount paid to a typical GM worker. Today the CEO of Wal-Mart earns nine hundred times the wages of his average employee. Indeed, the wealth of the Wal-Mart founder's family in 2005 was estimated at about the same ($90 billion) as that of the bottom 40% of the US population: 120 million people.

I just don't understand, if they see numbers [of CEO salaries]that represent people, how they can somehow skirt around that and morally justify taking or ruining those lives and leaving them with nothing. That, to me, is violent crime. It's certainly more violent than selling grams of pot to other adults.

Increasing inequality in income distribution in this country has broader policy implications, and there is also the growing problem of perverse incentives that result from executives receiving grossly disproportionate compensation based on decisions they themselves take.

When you give chief executives too much compensation in stock options, they concentrate too much on the stock price, and there is a perverse incentive to raise the stock price, particularly when the chief executive wants to exercise his own options.

We have new rules that give shareholders the ability to vote on executive compensation. We have new rules for asset-backed securities. We have new rules around credit rating agencies.

Compensation needs to be predominately performance-driven. If CEO compensation was performance-driven, which I believe it was in IBM's case, nobody would ever argue. If the shareholders didn't make billions and billions of dollars, I wouldn't make millions of dollars.

Look, I've always said from the word go many years ago that I felt the whole bonus culture, they need to think very carefully about being detached from the rest of the British public.

As long as perverse compensation systems for financial executives exist, the United States financial problems will remain nearly, if not completely, intractable.

Directors should be paid for promising impossible things.

It's not reasonable for companies that have chief executives and board members who are paid very considerable sums to subsidise low pay through in-work benefits.

If the government is injecting public money, it should also take the right to oversee board appointments, executive pay, and future business operations.

People feel like there're two systems of justice, you know? Over there at Wells Fargo, you know, you had the scandal going on there, but the CEO leaves with a big, giant package. And other folks get in a whole lot of trouble for doing a lot less. The truth is that we have got to make America work for working people again.

Too often, executive compensation in the U.S. is ridiculously out of line with performance. That won't change, moreover, because the deck is stacked against investors when it comes to the CEO's pay.

CEOs pretty much pick the boards that give them salaries and bonuses. That's one of the reasons why the CEO-to-payment [ratio] has so sharply escalated in this country in contrast to Europe. (They're similar societies and it's bad enough there, but here we're in the stratosphere. ] There's no particular reason for it.

I first would allow the guilty bankers to pay, you know, the ability to pay back anything over $100 million [of] personal wealth because I believe in a maximum wage of $100 million. And if they are unable to live on that amount of that amount then they should, you know, go to the reeducation camps and if that doesn't help, then being beheaded.

Is there any fairness in a system where a group of people can borrow a bunch of money to buy a company and pay themselves millions of dollars in dividends and fees, while the company itself ends up bankrupt and its employees lose their jobs, health insurance and pensions?

Sometimes I hear news about the huge dollars involved with CEO pay and corporate-management salaries, and I'm mystified at how someone can justify taking that much at the cost of other people's livelihoods. In a bizarre way, I'm almost kind of curious, like "How can they absolve themselves and enjoy their wealth?" I don't understand it.

I agree with people who say we want more income equality; we want more consumer protection; and we want sounder banks. I agree with all that.

When top executives get huge pay hikes at the same time as middle-level and hourly workers lose their jobs and retirement savings, or have to accept negligible pay raises and cuts in health and pension benefits, company morale plummets. I hear it all the time from employees: This company, they say, is being run only for the benefit of the people at the top. So why should we put in extra effort, commit extra hours, take on extra responsibilities? We'll do the minimum, even cut corners. This is often the death knell of a company.

The money has to be deferred with what they call "clawback," which means they can get it back if I lose it all. So that guy making ten million a year selling credit default swaps, if we're going to keep five million of it in escrow for ten years, and with the right to go back and get it, if he starts losing money, then we're going to give people the right incentives not too take so much risk.

A company does better the less it pays the CEO.

If instead of looking at income, you look at levels of consumption, if anything that's become more equal. The fraction of families that have a dishwasher, that have a sewing machine, that have a television set. In respect to consumption, it's very hard to avoid the view that people have been getting more equal rather than more unequal.

I was very sad for many days when I discovered that in the world there were poor people and rich people; and the strange thing is that the existence of the poor did not cause me as much pain as the knowledge that at the same time there were people who were rich.

I like to help poor people who got no chance. If rich people don't, who will? Not other poor people, that's for sure.