The Truth about Executive Compensation

Am I still living in America? It seems that everyone believes that
the government must "do something" about executive pay. I have a
suggestion, let's do nothing at all!

Executive compensation, and leaving such matters to the
shareholders, is NOT, I repeat not, what got us into this mess.
Deregulation wasn't the problem either. Let's not forget what caused
the financial crisis — borrowers who never cared about the consequences
of their loans first and foremost, and secondly, the institutions that
relaxed standards (sometimes at the behest of government) in order to
give out these loans. This was the problem. Everything else we are
seeing is a result of that. You could cap an executives pay at 1 dollar
a year and that wouldn't change the mess we are in.

But there is a deeper point here that people are missing. Obama isn't just talking about bailed out companies:

"This is America. We don't disparage wealth. We don't
begrudge anybody for achieving success. And we believe that success
should be rewarded. But what gets people upset - and rightfully so -
are executives being rewarded for failure. Especially when those rewards are subsidized by U.S. taxpayers."

Especially,
meaning not only those companies subsidized by taxpayers, but any
company that has failed should not be rewarding executives.

As part of Obama's executive compensation "plan" is "A
Treasury-sponsored conference on a long-term overhaul of executive
compensation" which is not limited to companies that are
getting government bailouts. We aren't just talking about the short
term here, not just talking about companies bailed out by tax payers.
This is extremely serious business.

Carly Fiorina
wrote a great article on CNN today saying that caps aren't needed —
transparency is. And I agree with her. Shareholders should be involved
in these decisions. Not President Obama. Of course, looking at the
comments below the article, Carly is roundly criticized and her
performance at HP brought out as a counterpoint to her argument. Of
course, there is the messenger and the message. This type of character
attack, ignoring the argument and focusing on the person making the
argument, is something I have come to expect from a certain half of
this country for the last eight years.

more...http://blogcritics.org/archives/2009/02/05/133520.php