Edward Jones Partnership Question
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ice,
1: Cannot keep it. 2: Bought back at face value. 3: Can keep (If I remember correctly) if you meet retirement (years of service + age) requirements and completely unrelated field.[quote=buyandhold] [quote=Squash1]http://stlouis.bizjournals.com/stlouis/stories/2006/08/28/story1.html
Explains the last offering in 2006 or so... Weddle's salary maybe $250K, but he is taking home at least 5-7 million...[/quote]Probably taxed as dividend income, too. Although he did write that he took a 50 percent pay cut last year.
[/quote] My LP is taxed differently than dividends, if I remember correctly. I would assume his is the same. It's not fully ordinary income, but it's close. I actually don't have enough of it to really impact my tax statement, so I don't pay that much attention. I just sign where the guy who does my taxes says to. $5-7MM still puts him on the low end of the pay scale for execs.
ice,
you can keep it if you leave the field or retire and age+yrs of service=75 which means if your 55 and you've been hear 20 yrs your good, as long as you stay away from the industry.[quote=Spaceman Spiff][quote=buyandhold] [quote=Squash1]http://stlouis.bizjournals.com/stlouis/stories/2006/08/28/story1.html
Explains the last offering in 2006 or so... Weddle's salary maybe $250K, but he is taking home at least 5-7 million...[/quote]Probably taxed as dividend income, too. Although he did write that he took a 50 percent pay cut last year.
[/quote] My LP is taxed differently than dividends, if I remember correctly. I would assume his is the same. It's not fully ordinary income, but it's close. I actually don't have enough of it to really impact my tax statement, so I don't pay that much attention. I just sign where the guy who does my taxes says to. $5-7MM still puts him on the low end of the pay scale for execs. [/quote] How does one get by with only 5-7mm? "Real median household income in the United States climbed 1.3 percent between 2006 and 2007, reaching $50,233, according to a report released today by the U.S. Census Bureau. This is the third annual increase in real median household income." August 2008 Maybe it's the fact that they're ALL overpaid and the fact that we've come to accept it. I just don't feel sorry for one of the lowest paid execs.
I never said I felt sorry for him. But complaining about how much money Jim Weddle makes on his GP is really pointless.
I agree with you that these CEOs running companies out there are out of control. I'm not a big proponent of capping salaries cause I'd hate to have it done to me, but when you're laying people off and your CEO is making $20 million a year, there's a problem.It’s strange that we are debating the income of a successful private partnership owner, who BOUGHT all of his general partnership shares, in a PRIVATELY held business, who’s firm did NOT collapse like the rest of the industry, and makes far LESS than most of the execs in the industry. It’s a $4B company that has never earned less than a 21% return on capital in the past 10 years, and that has over $1B in capital currently. Why are we discussing Weddle’s return on capital?
Very few people are worth $5 to 7 million in pure economic impact -- maybe somebody who comes up with a new medicine or labor-saving device or fuel-efficent car. Maybe the CEO of a startup that hits it big. But definitely not a CEO babysitting an established company. And most definitely not anybody in the financial services industry right now. You could put Spiff or B24 in charge of Edward Jones tomorrow, pay him 250k, and get the same results going forward as we're getting now. Probably better -- a CEO getting paid 250k would be on the same wavelength as his customers and his employees and therefore service them more effectively. CEOs get paid what they do because we have the mistaken notion that their skills are rare and that they have the power to move these huge behomoth companies.
I agree with B&H(though I don’t agree with the philosophy of his name)… Though i think there are some exceptions to the rule…Jamie Dimon, and what he has done with Bank One, to JP Morgan Chase… James Skinner, a company going through two ceos with health problems, then having to deal with that stupid documentary and still come out unscathed…I think Lee Scott at Walmart, took that company to a whole new level… and if movie stars can get $20million a picture(some of those movies suck, and I should have gotten paid to watch them) then let the free market decided who gets paid what…
I don't have a problem with Weddle's pay... I was just pointing out the GP payouts(wish I was one, but didn't have to work for the company)He's getting paid $5-7 million because of the previous efforts of people who built this firm and because he took over at the height of the greatest bull run in history. Right place, right time.... We'll see if he can earn that money this year, when growth and return on capital will be much smaller.
[quote=Squash1]I agree with B&H(though I don’t agree with the philosophy of his name)… Though i think there are some exceptions to the rule…Jamie Dimon, and what he has done with Bank One, to JP Morgan Chase… James Skinner, a company going through two ceos with health problems, then having to deal with that stupid documentary and still come out unscathed…I think Lee Scott at Walmart, took that company to a whole new level… and if movie stars can get $20million a picture(some of those movies suck, and I should have gotten paid to watch them) then let the free market decided who gets paid what…
I don't have a problem with Weddle's pay... I was just pointing out the GP payouts(wish I was one, but didn't have to work for the company)[/quote] I've often had a similar thought about CEO's (especially after reading Andrew Lahde's letter to his investors here). I am certain that there is a significant amount of savvy that is required to run a company, but it doesn't take a one-in-a-million person. In my previous professional life I worked for some publicly traded companies where some CEO would make mind blowingly dumb decisions that certainly any monkey could make. I can't imagine many people who are compensated in the tens of millions, especially when their company is failing, being worth what they're paid. After all, if we drove our client's portfolio to zero, we would certainly be fired. I respect Weddle, if for no other reason, that he has the courage to stick to the vision, no matter how critical other people in the industry are.And this is different from almost any other big company how???? C'mon, if the top guy(s) at ANY company weren't grossly overpaid in relation to everyone else, John Thain couldn't have renovated his office, Wagoner's GM wouldn't be on the brink of a BK, etc. etc. etc. It's just the way of the world....the top 5% make 90% of all the income. It's called capitalism for a reason....they capitalized. Hell, even for all of you Indy guys. What does the top 5% of independent RR's make? Probably somewhere between grossly overpaid and a ridiculous amount. But there's a 95% chance they're making more than you...and probably A LOT more...5X, 10X or more than you. And they have their "lackeys" too....assistants, junior brokers, etc. etc. etc. Underneath the soles of every super successful person are the remains of all the "lackeys" that got the shaft along the way. The ones that complain about the income level of a GP, CEO, or other head honcho position are complacent and content in their mediocrity. If they weren't, then they wouldn't be bitching about others' success and fortunes, but doing what was necessary to amass their own. Either that or they're a closet Communist/Obama-lover! I mean, seriously, CAPS ON INCOME FOR TOP EXECS!!!! Sounds wonderful, Comrade!!!It’s almost like the Mob, for those high enough up, the rest are just the lackeys…
Someone clarify for me.
Am I right in thinking this income cap is only for companies that took gov't assistance? ie bailout? If this is a broad income capping for all execs, in all industries, or even just the financial industry, regardless if they need gov't help or not I'm moving to Australia! -Underminded "I just want the whole world standing"You guys have missed the meaning of my original post. I’m not bitching that they get paid what they do. My initial reading of Spiff’s post to me personally, was that he was trying to say how little the managin partner at Ed Jones made in comparison to other execs. My reply to that and to all the other execs is that I WILL NOT FEEL SORRY FOR THEM for making obscene amounts of money no matter where they fall in line with their peers.
Sunny and 65 here, taking the afternoon off.[quote=buyandhold]
Very few people are worth $5 to 7 million in pure economic impact -- maybe somebody who comes up with a new medicine or labor-saving device or fuel-efficent car. Maybe the CEO of a startup that hits it big. But definitely not a CEO babysitting an established company. And most definitely not anybody in the financial services industry right now. You could put Spiff or B24 in charge of Edward Jones tomorrow, pay him 250k, and get the same results going forward as we're getting now. Probably better -- a CEO getting paid 250k would be on the same wavelength as his customers and his employees and therefore service them more effectively. CEOs get paid what they do because we have the mistaken notion that their skills are rare and that they have the power to move these huge behomoth companies.
[/quote] Gotta disagree with you there. Secondary CEO skills (i.e. education, business insight, etc.) are not necessarily rare, but the ability to act on vision and provide actual leadership is relatively rare. Kennedy had it, Reagan had it, even Hitler. CEO's have got to have at least some of it, where most people don't. Is it worth millions and millions of dollars every year...it is if the company is willing to pay it. Asking somebody to take on the responsibilities of a CEO or similar ranking executive for 250K a year is preposterous. Would you do it? Would you want to be responsible for a multi billion dollar business, countless thousands of lives of employees, the myriad legal ramifications that arise, the constant scrutiny of shareholders/partners, for the same kind of money you could make as a dentist or a restauranteur or hundreds of other less stressful occupations. Do you honestly think that the head guy of a company worth upwards of $4B (that's 4,000 million just in case you can't picture it) and get's paid $5M isn't worth 1/10 of one percent (.00125) of the company that he's running and is part owner, that his economic impact on the 30-something THOUSAND lives (2 x the population of my town) of the employees, the MILLIONS of clients, and the $500 BILLION in assets, is less than 5-7 million bucks....the price of a house in the nicest part of town. As far as Spiff or B24 goes....could they run the company...who knows. But if they COULD and were INCLINED to do so, I'm sure they'd both be running SOME COMPANY vs. working for a company. This means, obviously, they either can't (which means they aren't worth $250K), or they don't want to (which means $250K isn't worth it to them). And don't pretend to think that any of us are stupid enough to believe that ONE person can move a huge "bohemoth" company. No more so than the captain can run an entire cruise ship by himself. It's the effective leadership and management of the team that makes a bohemoth move.[quote=buyandhold]
First of all, Hitler was the worst 'CEO' in the history of the world! You take control of the dominant power in Europe and reduce it to ruins, well, that's pretty much an abject failure. $5 to 7 million to be a CEO is not the historical norm. The CEOs at Coke or GE 20 years ago were not making this kind of money. Just a quick google search shows that CEO pay has risen 9 or 10 percent a year over the past 20 years. The CEO at Edward Jones is making far, far more than the man who built the company. Heck, Ted Jones is dead but is probably still the most influential person here. I imagine it's the same at many companies. If you limited CEO pay to 500k, none of them would quit. CEOs are in it for the status and the power. Take away the big dollars and they'd find some new way to measure themselves against each other. Or maybe you'd come up with a system of corporate governance based more on consensus and teamwork and less on hiring some czar with an inflated reputation. Mayors and governors and various public servants have a far greater impact on economic life than CEOs and none of them make millions in salary. [/quote] CEO's 20 years ago made less than they do today? Really? No kidding?!? Ted Jones made less than Jim Weddle? You do realize Ted Jones died about 20 years ago, right? Oh, and 9 or 10% per year is just a little better than inflation! Not even as good as the S&P500. Some CEO's would work for $500K, sure. Some wouldn't. A lot of CEO's are in it for power and influence...those are probably the same guys who think money = power. Corporate governance based on consensus and teamwork. It's very utopian. Look, it sounds great, but just like Communism...it don't work!!! The buck always gets passed, and the higher it goes the more the guy gets paid. Karl Marx believed in a world where everyone worked for the common good, no one needed or aspired to be ultra wealthy, the middle class reigned, and there wasn't a divide between the have's and the have not's. On paper it looks good, but in reality, capitalism works. Communism doesn't. Didn't work in USSR, not working in Nam, not working in Cuba, not working in Korea. China's doing OK, but they decided to go capitalist! And as far as politicians go....can you honestly say you think they have more impact on the economy than businessmen??? You think your mayor has a bigger impact on the local economy than, say, the local CEO that just laid off 25,000 people?Let me state the obvious: I am not for communism…
The original idea behind communism, was that it would form after the fall of capitalism.. The countries that currently operate under forms of communism did not come about because capitalism failed, they skipped steps... Sadly if this "hiccup" were to cause complete and utter failure and destroy capitalism, then communism would rise in its place because all the money would be gone..Theoretically...[quote=Squash1]Let me state the obvious: I am not for communism…
The original idea behind communism, was that it would form after the fall of capitalism.. The countries that currently operate under forms of communism did not come about because capitalism failed, they skipped steps... Sadly if this "hiccup" were to cause complete and utter failure and destroy capitalism, then communism would rise in its place because all the money would be gone..Theoretically...[/quote] Money is just the construct that society uses to represent wealth and the ability to obtain wealth. Money is not the wealth itself. That's why there are so many different currencies, each with their own ability to acquire wealth. If and when our currency loses it's ability to acquire goods and services, the forces of supply and demand will counteract the opposing force of "super inflation". It's kind of like what's going on now. CPI is down substantially. People's ability to buy has decreased to the point where prices will decrease to balance it out. Either that or we'll get these "capital injections" to the point that the dollar will be worth about as much as the Korean won. But the citizens of Korea are still able to buy stuff. They just use more units of wealth because the units are smaller. Wealth is still there. Take land for example. An acre is an acre. But what if the definition of acre changed so that now an acre was about the length of your arm squared. Now that same plot of land is several acres, but it's still the same amount of land. Such it is with wealth and money. Wealth remains...money is subject to the whims of man. That being said...capitalism can't fail. It ebbs and flows, but it can't break down. There will always be demand, and there will always be someone willing to supply. Capitalism is at the core of human evolution...all the way back to the days of barter. Communism, on the other hand, is a human invention....a relatively recent one too. It, therefore, is fallible.