The Feb. 10 editorial is headed “Capping executive pay for business that receive bailout money is but a start.” It goes on to say “The $500,000 figure is the cap President Barack Obama has set for executive compensation at firms that accept ‘extraordinary assistance’ from the government. It’s a good move, both to calm populist anger at corporate greed, and to level the playing field a bit when it comes to executive compensation.”
WATCHDOG: Actually it would be a stupid move if indeed the administration is really serious about it. Failing companies couldn’t even keep the dummies who have got them into trouble, let alone attract more competent executives to take their places.
The lesson learned from the Convention Center Project experience is: Put inept executives in charge, and they waste millions to pay more competent individuals to do their jobs! (Of course if the project only benefits special interests, “inept executives” enables them to be in control. Who ever heard of an over paid, mediocre consultants suggesting a project be canceled! But we digress.)
The Intell is more on mark when it concludes “A move that might have a bigger impact would be to require publicly owned companies to submit executive compensation plans for shareholder approval.”
Over compensation and wasteful perks will always exist because the executives and board members tend to scratch each others’ backs. Only vigilance by major stock holders can distinguish fair compensation from rip offs. Alas, even investors as powerful as Warren Buffett have at times failed to achieve reform, and for no lack of trying.
