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Avs Get Great Deal with Matt Duchene
The Colorado Avalanche have just resigned center Matt Duchene to a two-year, $7 million deal, a great deal for the team. The Avs have done a good job locking up their players this offseason, having already agreed to deals with forward David Jones, defenseman Matt Hunwick and captain Milan Hejduk. But this deal is the best they’ve made so far. Just look at Duchene’s stats so far in his career:
Due to knee and ankle injuries, Duchene played in just 58 games while tallying 14 goals and 14 assists. While those stats make the deal seem like fair value, Duchene’s first two years in the league demonstrate his true worth. The third-overall pick in the 2009 draft tallied 51 goals and 122 points in the two years while missing just three games.
The best part for Colorado: Duchene is just 21 years old. That means he still is going to improve quite a bit. There’s no reason that he cannot score 35 goals and dish out 50 assists each season for the next few years. If Duchene had had those stats this year, he would have been fourth in the league in points and tied for 11th in goals. That’s an entirely realistic target for such a young player and yet Colorado is paying just $3.5 million per season for him. The injuries are certainly worrisome, but if Duchene stays on the ice, this will be a great deal for the Avs.
Taibbi Still Wrong About NYC Parking Meters
New York City will lease out its parking meters.
Matt Taibbi wrote a post on June 13 strongly arguing against New York City leasing its parking meters. The piece was titled “New York to Repeat Chicago’s Parking Meter Catastrophe.” Felix Salmon shot back at Taibbi and I added a bit more to Salmon’s post as well. Now, it’s back to Taibbi:
“The city might get $11 billion in the deal, but if that’s even a dime less than the real present value of these parking meters (to say nothing of the actual amount of revenue that will be collected over the life of this arrangement), then to me that’s bad and shortsighted public policy.”
First of all, Taibbi’s first post assumed that the real present value of the parking meters must be a lot higher than $11 billion. He assumes the same in this piece as well:
“If $11 billion can do a lot of good, then I’m sure $20 billion or $25 billion – or whatever the investors buying into this deal end up calculating the real value of those meters is, and it’s surely more than $11 billion, or they wouldn’t be doing the deal in the first place – would do a lot more good.”
We don’t even know the length of the contract yet and Taibbi is jumping to conclusions that the state must be valuing it wrong. I admit that that is probably the case. States have never proven great at valuing their assets and selling them off, but New York is also determined to avoid repeating Chicago’s mistake when the city sold off its parking meters for dramatically less than they are worth. Read more…
Executive Pay Grows Yet Again
David E. Simon, CEO Simon Property Group
The top CEOs around the country saw their median pay grow to $14.5 million last year, even as stockholders began demonstrating their displeasure. The Dodd-Frank bill requires companies to hold a vote regarding executive pay at least once every six years. Many companies did so last year and stockholders voiced their displeasure. For instance, 73.3 percent of shareholders of Simon Property Group voted against the pay of its top executive, David Simon. Here’s the issue, though. The vote is non-binding. Companies have to take into account the stockholders’ vote, but they do not need to listen to it. Thus, Simon received $137 million last year, though a large chunk of it was in a stock package.
In many ways, CEO pay has fallen into a downward spiral. Companies are not just competing with each other for a limited supply of top-level executives, but they are competing with each other to pay those top-level executives the most. Many companies have begun using CEO pay as a form of prestige. A small company paying an outlandish amount for its top-level executives views itself as a more influential and important company than one of a similar size who pays just an average amount for its executives.
Each year companies pay their CEOs more, increasing their pay much more than the average worker and higher than inflation. Then the following year, in order to keep up with other companies, they raise their top-executive pay even more. Each year, the raises the executives receive outpace the raises that ordinary workers receive, f they happen. This just further increases income inequality. Do all CEOs really deserve a raise each year that is twice as a great in percentage terms as the ordinary worker? What if the company loses money? Can anyone really believe that CEOs deserve a raise then? But it happens and the American public has been rightfully outraged about it for year. Unfortunately, while Dodd-Frank at least gave stockholders the ability to vote on the issue, it didn’t give them any actual power. Thus, top-level executives continue to see their pay rise while the rest of America grumbles to itself.
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