Wednesday, February 4, 2009

Grrrr...finally

Opened up yahoo to check home email. Saw an article about executive compensation and its maximum limits. About time!

Was listening to NPR yesterday and all I could think about was how much money people at the top of these companies are making. It's just insane! True Blue Texan did a good job of sharing her sentiments, which happen to be similar to mine. I took a cut in pay for a job with more responsibility (not to mention our household went from two to one incomes), yet managed to purchase a four bedroom house and send my kids to soccer and dance. Ok, maybe our vacations consist of the yearly holiday trek to our families' houses, but hey, we need to see them and we get to enjoy time with them and have great home cooked meals. Still, we have computers, a cell phone, satellite, and sometimes take vacations other than seeing our families. We try to save for our retirement and college (though using the stock market was maybe not the best bet, but we'll see). We also have a good sense of deferred gratification. There are things I do wish we had in life, I'd like to travel to Europe once a year, and the Rocky Mountains once a year, and wish we had a cabin of our own on a lake somewhere. Maybe someday, maybe not. But my life is still complete without them.

The amount these executives are getting and I am just imagining all the things all that money could go to. Such a selfish culture, these CEOs of big companies or CFOs or COOs. When your company is tanking, real leadership would be to say, hey, I need to take a pay cut, especially if I ask all my worker drones to take a pay cut and/or must lay them off. How many workers could stay on if the salary of the executive was cut? Gasp! More people are still on the pay roll to get the job done. Productivity and morale might still be up.

And I hear all the business boards crying, we can't get good talent if we don't pay this. Hmmm... what if all the boards, together, decided they should cap executive pay. Then, CEOs won't leave, because, oh, Company Y is paying the same as Company X. Incentives should be based upon performance. Hey, incentives in stock might help (especially if they aren't allowed to sell off for a certain number of years after leaving), because your fortunes would ride on your stocks. OH! So your company has to perform well to be a top stock! Gasp, that's bonuses tied to performance! And yeah, duh, how come shareholders have been so left out of this loop. I don't understand much, but it seems people on boards in publicly owned companies also get large amounts of compensation. What are their qualifications and how do they get to be there? And why don't shareholders get to know more about their companies? Because it's dang hard to understand.

So the same old people run all these corporations and have played with all our money. And then they screwed up, lose our money and have the gall to go to the US taxpayers with their hand out. So I am glad that compensation is being limited for those companies that will ask for a handout from here on out. It's too bad this didn't happen with the first half of the rescue package.

Just like government, maybe we need new fresh blood in these leadership positions in companies. I wonder, how many of the CEOs are in my generation, Generation X as we're called. I bet very few Fortune 500 companies have Gen Xers in the driver's seat, if any. It would be nice if someone could give us a chance, us and our younger counterparts. Sometimes experience is good, but sometimes mixing it up with different generational viewpoints is good, too.

There's so much that could be done with education, health care, infrastructure, job creation, if the money wasn't tied up in so many executive salaries. They aren't giving much of it away. Now, are they going to help spend us out of this crisis? I don't think they can. I hope a new day is dawning on corporations, taking out the craziness and putting in responsibility and accountability that should have been there all along.

3 comments:

Aliceson said...

About time is right, and with all of the sacrifices us average americans have had to make I think a salary cap of $500,000 is not too much to ask of these Execs. They'll still be able to vacation in the south of France and we'll still be wishing we could afford a modest vacation.

Multiple Sarcasms said...

I completely agree, although I always wonder about what they give up to get those salaries. I mean the people who work when they are on vacation. Who sleep beside their blueberry so they can answer an e-mail at 2am. Also they live in places where a modest 2 bedroom house costs 5 plus times that of ours. Even with all the money the CEO's make I wouldn't swap my life for theirs.
Somehow there should be more balance in the world.

Eudea-Mamia said...

Great points - I actually did a post on this yesterday as well.

I'm not too sure the answer is in getting all the companies to agree on lower salaries though. But the incentive on stock options could work well, as long as the SEC keeps a handle on the why the price is up. False reporting to get prices higher caused a lot of this mess.

Great post.

Gen X is coming - the economy just needs to bounce back so all the Boomers can retire and get out of the way already!