whether there's another lunch invitation any time soon. >> and we were in four hours of thanks. our cruise. we had just gotten on to the cruise. >> you'd gotten on around dinner now bloomberg business week time. >> yes. >> yes. on ceo pay. i understand the new procedure is that regardless of before he joins us this morning on "washington journal" and we'll they sail, they will give you the safety information. show you as much of these comments as we can until "washington today" begins at 5:00. you know, this is really -- like i said, step one, two, and as part of our spotlight on three. magazine series, every wednesday we need to record everything that happened to make sure that in our last hour, we turn our it never absolutely happens attention to a recent magazine again. article. and here's the headline in a i am so happy for your safety recent edition of the "bloomberg and coming here to enlighten us business week," is any ceo worth $189,000 per hour? as to what happened step by step. you know, i've heard so many joining us from boston this different stories, but there is morning, roger, let's begin with no excuse that the captain was your question. what are the arguments for and not there, that he didn't hold against your question? up his responsibility. >> well, the argument i guess i understand he was dining, but for, and i didn't give that a obviously you didn't see him at dinner. whole lot of play, i have to >> no, we didn't. admit, but the question for the >> he wasn't at the captain's new ceo of apple who of course table. >> no. >> no.

okay. well, so this is -- i'm trying seceded the late steve jobs late last year, and so this was his to make a little joke of it, but first -- this was his first year it's no joke. clearly if you're the captain of a ship, you have the as ceo. i guess the arguments for, he's responsibility to make sure that your passengers are safe. but, you know, it goes back to been an understudy for steve jobs, very successful. this is one person i can't i just got my first iphone and imagine anyone responding in that mannerism. apple's doing, you know, a very good job for its shareholders and so i'm happy that you all are safe and thank you so much and everyone else. >> and let me stop you right there, roger. for coming, and i yield back the there's a headline in today's "financial times" that echoes balance of my time. that sentiment. apple joins the $500 billion >> thank you very much, mr. chairman. club with the new ipad looming ipad 3 coming out what we're i agree with ms. brown that this told is march 7th. is indeed a teachable moment. so profits way up for apple. and i too am sorry this happened >> right, right. to you. so let's agree that he deserves this is the fifth anniversary -- a very good living, a reward for was it fifth wedding the success he's already anniversary? i hope you don't mind me saying contributed to, perhaps some congratulations. >> thank you. >> sorry you had to go through this hell. sort of incentive so that if there's further success down the

and hopefully nothing like this road, he'll get even richer, will happen again. that's the capitalist way, and i'm all for capitalism. but $189,000 an hour, you know, going back to the teachable moment, what would you -- i know you thought about this, and i if we were to say how about want to thank you for your testimony. it was very, very clear. but when you look back, are $189,000 a minute or $189,000 a there things, you say you've second or $189 million a second, at some point presumably some been on cruises before i think you said or you got the -- some kind of an information about person would say, shouldn't there be some sort of limit or be tied to something? safety. it shouldn't just be how many zeros tim cook or the board of and there's going to be some apple can write after the comma. testimony later on and you may already be aware of this that on there should be some system and february 9th, 2012, members there should some system so that instituted a new passenger if tim cook has a bad year he's policy requiring mandatory taking a risk and calibrating drills for embarking passengers both a possible return but also the possible downside for prior to the departure from himself. port. and this is a new policy which >> right. >> and when we think about the fact this contract was given to him at the beginning of his exceeds existing legal requirements. first year as ceo. the argument is that the but to those people from the

proportion seems all wrong cruise industry that might be in the room, what would you -- i before he's even had one good mean what would you like to make sure is in that drill? year, one bad year, one any year as ceo, $189,000 an hour, which in other words, when they -- just like you get on the airplane, they tell you how to came out to, you know, that was fasten your seat belt and all that kind of thing. a derived number from $378 but what would you want? having had this experience and million a year. none of us, probably, except of that ible list does he face some other people that may have been on this ship with you all money if it falls, he'll get a have gone through this type of lot of it depending on various experience. i mean, looking back on it, what kind of information would you formuli, but does he go to sleep have loved to have seen or have at night going i'm aid afraid heard when you got on the ship? i'm taking too much risk here, >> so the first thing that we i'll only get part of that $378 would've liked to have seen is million. getting some kind of what motivates people is to make information. even if it's the basic the first million not the $378 information because in our million. and when you begin at that level to speak of tim cook facing any previous vcruise while we were realistic possibility of signing in, they were telling us please proceed to this deck, this is where the security drill is going to be in. personal loss, forget hardship,

as soon as we hear security. we're now up in wonderland personally when we went on to territory here, right? this cruise, we trusted the crew members and the captain that >> roger, break down as ceos on they know what they're doing, average, ceo pay. nobody deserves to die on their if you go to aflcio's website, vacation let alone go through all this trouble. they have executive pay watch but we would've really loved to and they break it down like this, on average for 2010 ceo have seen some kind of assurance or some kind of direction saying, you know, where th, whes pay and fortune 500 companies, maybe $250,000 in bonuses, stock rewards, almost $4 million, are, who is supposed to do -- option rewards almost $3 like in our previous experience, million. they had somebody respond to nonequity incentive plan compensation, 2.3 million, pension and deferred group "a, " group "b," and they compensation earnings about 1.1 million. so let's -- we're taking an example of tim cook, but $378 million, that's not all in cash, were supposed to stand there. is it? so something like that would have been really nice to see. how does it -- >> no, it's -- it's not all in cash. language was another barrier we but that's the present value. felt there. majority of the crew members in other words, he got various that did not speak english or awards and incentives. had difficulty in communicating, but if he went to some banker so that made it a little more and said this is what i'm frustrating because we had to offered this year, what's the cash value of it now? wait for somebody to translate the answer according to apple

it into english and once the would be $378 million. so the fact that it's not, you know. it starts to change, and i think that also added to the if $378 million. so if you get a new car and it is a mercedes or something, and aggravation and confusion at the fact that it is not in cash, costa concordia. does not mean it won't get you >> and a lot of times we tried to where you want to go in very good style, but let's go back to to find people who spoke english in other languages that the the basic question, and as i announcement was being made to added mentally the numbers they let us know what had just -- got to $10 or $11 million, but the number i have for the 500 what was the message. so we relied on like a third ceos in the s&p 500 is that the party to tell us what was happening. median pay, the average is a little higher, because the tim like we said, the life jacket cooks of the world skew it, but the median pay is over $8 location would have been very nice. because we had no -- i actually million, and that number ten years can ago was about $5 had no idea if it wasn't for our million and most of the number, as in the figures that you gave teamwork that she knew where the life jackets were and we are in options and stock wouldn't have had to go all the way third deck to ninth deck to incentive and by the way in that decade from 2000 to 2010 the average investor lost in the -- get our life jackets. that was a lot of time and or the investor who bought the

s&p 500 lost 14% so that the energy. median ceo who lost about 1/7th and coming down on port deck again just for the sake of a life jacket. we didn't care at this point -- of his investors money or at that point for any other luggage or any other things that presided over the one-seventh of were in the room to leave the performance which many would say it is not mediocre, but behind, it was only for the sake subpar or substandard got an of the life jacket we had to go increase of $5 to $8 million up there. >> let me ask you this. you said that you had had which is 60% from the level which is the average american family earns something like $45,000 or $50,000 a year, so contact with the cruise folks. that is from like 100 times the average family to 160 or 170 and you said they compensated times the average family for doing a bad job. you for certain losses that you may have sustained? is that right? >> so directly for our -- what so, is that a, you know, pay for performance? it does not sound like it to me. we paid for the cruise alone. and to go to basic area where so we had made our separate arrangements to get to the port, the discrepancy of pay for performances or the stayed in a hotel, book our flight separately, which was not inconsistencies or the

done with the costa, it was done unfairness and i don't mean unfairness, because we live in a capitalist system, and athletes with other companies that we make more than journalists and flew with. journalists make more than some people, and that is the way the system is, but when i talk about so that's what -- the only thing they refunded immediately what unfairness in this sense, i'm was the charge on the credit card from costa concordia. talking about within the capitalist system, what do these >> and to your knowledge, just executives really deserve? another minute, mr. chairman. what was the value for the to your knowledge, have you now shareholders and the companies? released them from any future liability? or is this -- you've been paid en ob that scale, if they are losing 14% for the shareholders up to a certain point and then over ten years which is a if there are other -- in other tremendous loss of opportunity words, if you wanted to -- if and capital, then to get a 66% you had other expenses or you raise, how does that come about? the biggest area is stock pay, wanted to claim any kind of damages, have you signed and so-called incentive pay or anything that says the company options, so i want to spend a is no longer liable? >> no. little bit of time how that happens a. ceo comes in on year because we still haven't -- they did send us a claim form for all one and they say we will have the things that we had lost in options, and so if the stock rises, the stock is going to be our cabin, but we haven't signed worth more and you can buy it at anything that releases them from the old price and that is the further liabilities, no. option and make a profit. if the stock doesn't rise, you >> and also, they had mentioned don't make any money, so that in one of their letters that they will try to recover our

belongings and get back to us. the ceo has an incentive, and that sounds like a good thing or healthy thing, but a it gives the ceo an incentive to get the and at this point, they would like to know the estimate of the stock up so that all of the shareholders benefit. okay. but what happens is that after valuables that we have left with the or three years, and this happens time and time again behind in case they are unable to get those to us. and company and company again, >> i've got to ask you this. would you take a cruise again? if the stock goes down, they >> not in the near future, no. give him more stock incentives and more options now at the >> no? lower price. >> no. so now, if the ceo gets the >> thank you very much. >> thank you. stock up, he's profiting just house speaker john boehner for getting the stock up to and senate minority leader mitch where it was before or put mcconnell with president obama differently, he is makeing mone at the white house today and briefed reporters on capitol hill. just for recouping the losses that his shareholders have already suffered under his tenure. and that is what happens in company after company. the bar keeps getting lower, and every time that the company hits a stumble, and so the ceos are >> good afternoon, everyone. we had a positive lunch at the rewarded just for recouping the white house today. and i think we discussed a losses over which they have number of areas where i believe already presided. >> all right. the phone lines and twitter are there's common ground between the two political parties. lighting up here, roger, for particularly on jobs and on you. let me add this, taxpayers pay energy. and i'd like to think that some for news corporations products

of the bipartisan bills will be and subsidize their jets and million dollar parties and moved through the house will be losses and have the cheapest taxes. george, the democratic caller in taken up soon by democrats over in the senate. you know, during the state of bloomington, indiana, you are a the union address, the president first government ahead. >> caller: thank you, sir. said that he was for an all of it is a privilege to have an opportunity to talk to you. the above national energy i want to tell you my experiences of dealing with the policy. house republicans have been for a national -- all of the above ceo who took over the company i national energy policy for about have worked for many years. five years. i work for a relatively large and it's the same approach, you restaurant chain, and i am also know, that his jobs council and training new employees. this guy has came in and he took their annual report supported, everything from everybody. he cut wages, incomes in half, as well. so we offered to work with a president some of those bipartisan bills that have been and took vacation pay, and he took everything everybody worked passed in the house and there really hard for and enriched were some areas where we could himself massively, and that is find common ground. the heart and the soul of the i was encouraged by that. economic problems out there. we also discussed the jobs act, shareholders are gods and the workers are just treated like the package of bipartisan bills replaceable parts or replaceable that was introduced yesterday, trash. what we are seeing over the last the president was very optimistic about moving that few decades is workers working harder and producing more and receiving less. we cannot have a healthy economy bill through the house.

if everybody is producing more frankly it was a very good lunch and i'm encouraged by the and making less and ceos are discussing making more. attitude and the tone we had >> roger loewenstein. during the meeting. >> yes. >> the lunch was productive and this is a problem, and i want to separate it in two. i think all of you know that the some of the corporations and the bottleneck to establishing things on a bipartisan basis has boards of directors can deal with it, but if the ceos and the been the united states senate. top executives are being paid the house of representatives has more than they deserve, and they passed as the speaker indicated a number of proposals on a would deserve say in an open bipartisan basis. marketplace and you don't see many of them supported by the ceos going from one athlete to the next, because was we know what a ball player is worth, president of the united states. because some teams will play so i hope that the majority more to get another team's leader is responsible, obviously center fielder, but it is not with the ceos, because they get for deciding which bills we turn a job and staying put. so if they are getting more than to. we'll turn to bills that can they are producing for the corporation or getting it all up actually be passed and be signed into law. the house passed a number of those bills. as i indicated, the president's front in the first year as ceo or getting it repeatedly because indicated, he's for them. the bottleneck has been the in year three the stock goes down and get another bonus to get back to where they were in senate. i think we ought to pass these year one, that is a problem or a bills, get them down to the president for his signature as soon as we possibly can. issue that the thoughtful >> couple of questions. conscientious board can deal

with. the ul kaer i think is raising another issue or the issue of can we move on the keystone not the 1%, but in this sense of the in effect 99%. pipeline? what can we do specifically here in this timely fashion to what if it is in corporation's address the gas prices? >> we talked about a number of interest or perceived interest energy policies. to pay the workers less, and what if competition is so acute we talked about those bills that have come out of the house. that the corporation can make the president thought some of more money by paying less? those we could find some common that's a problem. ground. i did press the president on the keystone pipeline. the president said, well, you're it's a terribly serious problem going to get part of it. for the united states. that is not always a problem i just wish we were getting the with the corporation can deal with, but a problem that the part that would actually deliver educational system has to deal the oil out of canada and out of north america. with, that the tax system has the deal with, but that is not >> the part of the keystone pipeline we're getting, the necessa president has nothing to do necessarily a problem that every corporation has to deal with, because they are out there in with. it doesn't require his approval the competitive world, and their to build a pipeline from oklahoma down to the gulf. shareholders are saying to the directors, you can't pay them we hope he'll reconsider the more than the next guy. i am not saying that the problem unions are aggressively in favor is not serious, but i am saying of moving ahead. that it is not, that problem we know the thing was studied that you can put on the for four years already, the nebraska issue's been solved. there's no reason not to create shoulders of the board.

those jobs now rather than after >> rich and independent in los the president's election. angeles. good morning. >> caller: hello, good morning. roger, my understanding is that the board of directors serves as the police and the approval >> do you find the president to mechanism for the ceo be in campaign mode today? competition packages. and also that these boards are >> a very positive one. comprised of ceos of other and i thought very fruitful conversation. corporations so they all tend to scratch each other's back. >> senator snowe is retiring, wouldn't it fix the problem if you had some kind of requirement that the board members be truly and she cited the partisan atmosphere as one of the reasons independent and appreciative of she's not going to seek reelection. their fiduciary duties and maybe do you agree the senate right now is too partisan and that if they came from nonprofit congress is? companies that specialized in and is there anything that can be done about that? providing independent board >> well, obviously we hate to members? >> yeah, i mean, yeah, that is a lose senator snowe. she's been an extraordinarily big problem, and it has been a effective member. big problem and a problem of been right in the middle of a lot of bipartisan legislation public corporations ever since we have had public corporations, because, you know, shareholders over the years. i think she would have been reelected comfortably. own the companies, but they have we were surprised, obviously, and disappointed. hired management in there, and shareholders have busy lives, but in the end, members in and they can't be running the business of the corporation everyday, so how do you make, public life have to kind of make a decision about whether they and who is watching the want to continue and she had a watchers? great run and we wish her well, so we have boards of directors, we're going to miss her.

but the issue with the solution that you propose, and by the y >> -- republican member of the house yesterday said voters across the so-called rust belt. way, we passed, you know, we have laws that say that the directors have to be michigan, ohio, pennsylvania, independent, and there are are optimistic about their certain qualifications, and that future because manufacturing is on the way back and that people qualify a director as are very optimistic about their independent, and the majority future and about the economy. you're from ohio, do you agree with that? have to be independent on the nominating committee and >> well, that's not the compensation committee and so on, and so those laws are sentiment i get from the people restrained after the scandals of i talk to throughout the enron. the problem with the solution midwest. the economy's a little better. that you propose if you get say but people are concerned about people from nonprofits, if you what the cost of energy's going think about a company like city group which owns city bank and to do to those manufacturing jobs in our country. investment bank and complicated energy is not just the gas pump. options, you also want to have people who know something about the business and understand the every business requires energy when they spend more on energy, busine business. these are complicated businesses. you are underwriting mortgage less on others things. securities and what is in those? and what are we paying for those? not that the director did a great job, but you want people who understand and really have there's a storm cloud that ought to be attended to. expertise in the businesses that

>> are there any tangible or their boards of directors are concrete commitments you got out of this meeting? for, because you want them to be sounds like there were a lot of managing the, overseeing the pleasantries and sort of agreements to work together. capital of the company so it is but was there anything specific profitably invested. that you can tell us? >> and roger loewenstein, are >> well, i think the president's support of the jobs act was very there any rules about the ceo's clear. sway over the corporate board? in the steve jobs "buyout, there and i think his comments about trying to find some common was rules about how he was able ground on some of our bipartisan energy bills were also to push out people, and put ceos of other companies on the board that he felt would be more favorable toward him. >> if you looked at how the laws are written, you'd say it is a >> speaker, i want to ask you. this is the first time at all the congressional leadership has democracy. the nominating, the directors of met with the vice president, the president, and the debt limit negotiations. did you guys talk at all about the nominating committee have to everything that's stacking up at the end of this year at the lame be independent, and the ceo can't control them. they are elected by the duck? and do you think these discussions represent a new shareholders and so on, but it page? is sort of a democracy of the >> well, we only had an hour. way that the former soviet union we're not going to -- we couldn't cover the whole water is a democracy. front of issues. but i think we've outlined what the discussion was and we'll see the ceos typically control enough votes to get what they nt