<p>There are a lot of “executives” who just happen to be family members. Some of them are a disaster, like the Sulzberger idiot who has destroyed the NY Times. There are several of the big financial companies that appear to be run as regular companies but have family members lurking in the background either pulling the strings or sucking the capital out of the companies. I wonder what to do with them because their salaries often don’t tell the tale.</p>
<p>Well, the announcement about the salary caps have the executive compensation gurus abuzz. That will stimulate their economy as they work to get around this new cap.</p>
<p>All of their hard work and creativity will be focused on getting around the cap – for the people who don’t actually own the businesses – and to heck with the actual running of the companies.</p>
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I think we’ve just read a quote that will be one of the epitaphs of the era. After all the destruction this “top talent” has brought to the country, they’re convinced nothing has changed and the next windfall paycheck is just around the corner.</p>
<p>I wonder what the nobles at Versailles were saying to each other in that summer of 1789; probably the same sentiments found here, that things would soon be “back to normal” …</p>
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<p>Wow, you think so? What a damning indictment. Talk about lack of values…</p>
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Something came across my desk recently with regard to one of the companies in the news that was utterly shocking and disillusioning. Obviously, I can’t say what it was, but it has made me just a bit less likely to believe the best in these professionals.</p>
<p>There might be executives who are critical and needed. But read this letter from the LA Times, dated Feb 4, from someone who is (or at least thinks he is) one of those “critical” employees:</p>
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<p>I cannot tell you the fury that this letter whipped up in me. It’s not just the sense of entitlement, and the cluelessness about other people’s working conditions and the job market in general. The letter writer clearly thinks he’s being persuasive. His letter ends up adding to the outrage felt at WS bonuses. </p>
<p>The letter writer, incidentally, lives in a pleasant suburb of Los Angeles, where there are decent public schools, and where the cost of living is nowhere near that of Manhattan. He might well have a house worth seven figures, but people bought houses in that area for far less, even at the height of the housing boom.</p>
<p>My PhD husband works more than 60 hours a week and is helping find cures to cancer. Shouldn’t that be better paid? He’s never gotten a bonus in his life.</p>
<p>I haven’t read the whole thread, but be aware that the $500,000 is a proposed salary cap–not a limit on compensation. The idea is that top execs would receive stock options or restricted stock as part of the comp package. (They already do, but the proposal would change the mix.) If the execs succeed in turning around the company, the stock should be worth MUCH more than it is right now in 5 years. The execs will be handsomely compensated. If they don’t, and the company goes bankrupt, they won’t be. </p>
<p>I think the proposal might also allow some deferred comp–if you stick with the company for X number of years, you’ll get more. </p>
<p>Seems fair to me.</p>
<p>Isn’t the salary cap for tippy top executives only, not for salesreps, traders etc.
Also, plenty of companies did not take any funds and refuse to exactly because they did not want to be told how to do business.</p>
<p>[I’m quite sure that if salary caps were imposed, the companies in question would end up with better, smarter, more honest, and more highly qualified executives to replace any who chose to leave because of the salary caps. They would get people who were more motivated by the challenges or intellectual stimulation of the job and less by personal greed; individuals who would be more likely to make decisions based on the collective interests of the organization rather than their own personal interests.]</p>
<p>This works in the open source world where there are lots of brilliant people that are hardly rich that work on projects for free. Or maybe the occasional t-shirt or coffee mug.</p>
<p>You have former presidents that engage in charitable causes.</p>
<p>Can everyone please keep in mind that it was a small fraction of the folks who work on Wall Street who were involved in this mess?</p>
<p>Most had absolutely nothing to do with it and were as surprised and disgusted about the events as everyone on Wall Street.</p>
<p>Should those who were involved and had oversight burn? You bet. But this flow of hate is not deserved by the majority.</p>
<p>Yes, these people made more than most. No one complained while the markets kept going up and cheap loans kept coming their way.</p>
<p>These are public companies like any other. If shareholders feel compensation is out of wack they can vote with their feet. If clients feel they aren’t worth the fees, they can too.</p>
<p>The exact same thing happened after the dot com bust. Tech CEOs had to hire security because folks who had driven tech stocks to unrealistic levels wanted their heads on platters. Every Tom, Dick and Harry was happy to buy the stocks when they went nothing but up, but when they burst they acknowledged no part in it. Pictures of CEOs houses were on the front page of newspapers and talk just like what we have here went on and on.</p>
<p>And now we have another thread with lawyer hate…</p>
<p>Maybe only a small fraction was directly involved in the mess, but a large fraction benefitted. It’s the sense of entitlement that is so offensive and evokes outrage.</p>
<p>But no one was bailed out of the dot.com bust. People made a lot of money, and then lost a lot of money. Most had no severance packages and no bonuses, because the money was gone when the company went belly up. They rode high and fell fast.</p>
<p>The difference with the banks and Wall Street is in the entitlement to benefits and compensation and perks, even after the businesses have failed. And the execs want those bonuses on the backs of American taxpayers, many of whom have lost their own jobs or homes. It is really outrageous!</p>
<p>If indeed, for example, the “middle manager” in LA expressed entitlement, it is offensive. But like so much else the media has written on this subject, I would not be surprised if his comments were taken out of context.</p>
<p>What the media never mentions is that bonus is this business is not the same as in most others. It’s not a little something extra for doing a great job. Pay structure here is a smaller salary than what one would make in another industry with the rest of compensation paid once per year and called a bonus. It is customary to have a line of credit to aid cash flow which is repaid when the “bonus” is paid.</p>
<p>Allmusic, the difference between the dot com bust and this mess is that the bail out was necessary to keep credit markets going. The government did not bail out Wall Street to keep ibankers employed. At the heart of this is that a healthy banking industry is essential to keep the Country running.</p>
<p>And so much of what the truth is just does not make it into the media. Some bonuses taken this year and the outrageous entitlement of people like Thain gall people on Wall Street beyond anything people on Main Street feel. But understand there are a lot of victims working for the banks too. Their money is tied up in the banks and they lost a bundle too. And while they were busy doing their jobs well and making money for shareholders, a few of their colleagues brought them down.</p>
<p>The media isn’t mentioning my assistant, who has 4 kids and works 12 hour days, has given her all to give her kids a decent life and made 40% of her usual income this year having done a great job.</p>
<p>My mother-in-law lost $50,000 in Lehman bonds.</p>
<p>Where is her bonus?</p>
<p>Where is her bailout?</p>
<p>Almost 2 million people have lost their jobs in the last 3 months.</p>
<p>2 million people.</p>
<p>Where are their bonuses? Where are their bailouts?</p>
<p>Your MIL should talk to Geithner. They know now it was a mistake to let Lehman fail. That’s why they couldn’t get money into the others fast enough.</p>
<p>That’ll help. ;)</p>
<p>The point is people are hurting financially all over the place. Millions and millions of people. More than the 2 million I just mentioned.</p>
<p>And they aren’t getting bailed out.</p>
<p>The bailout did nothing to stop job losses on Wall Street.</p>
<p>That’s good.</p>
<p>I know people all over the place, in different industries, that are losing their jobs. Others have seen their incomes drop dramatically. Almost everybody’s net worth is lower.</p>
<p>No bailouts. No bonuses for these people.</p>
<p>My mother-in-law doesn’t want a bailout. Not for her. Not for wall street.</p>
<p>I don’t think our industry is all that special. I don’t. I think when everybody outside wall street gets their old pay back and their jobs back, then bonuses should be given to the people in the financial industry.</p>
<p>If you work in the financial industry and you don’t need government help, and you’re profitable, then pay workers whatever you want.</p>
<p>And this argument that bonuses are really part of the pay, I don’t buy it.</p>
<p>I saw John Mack today. I think it was John Mack. He said bonuses were based on three things. An individual’s performance. The division’s performance. But then here is the kicker. How the company as a whole did.</p>