Do nothing about executive compensation

Let's face it, none of us is getting paid what we're worth. And most of us think that the other guy or gal makes far more than (s)he deserves. Isn't that the dilemma that makes each of us uniquely human? Envy may be one of the seven deadly sins, but it is alive and well in the recession economy of 2009.

Some may think my POV as all too cynical, and perhaps there is some truth to that. Having had a fairly successful 30 year business career, I've observed and managed employees under all sets of circumstances and have come to accept certain immutable attitudes and behaviors. Earnings is where the rubber meets the road in management, and I confess to ineptitude during most discussions about pay, bonuses, and perks. Am probably not alone in this.

I think this is why I am bemused by the public policy discussions about what is fair pay for senior leaders in companies and financial institutions that came to the feds for a bailout during the last 12-14 months.

In general, I have been successful with compensation schemes that combine rewards for hitting short term goals and achieving longer term performance objectives. Wall Street, after years of getting burned by employees who collect the money and (figuratively) 'run' if and when big money deals go sour, are wising up and (all together now) shifting to a more intelligent mix of short term and long term paydays.

Back in my socialist days---that was before receiving my Harvard MBA, of course---I used to romanticize the European systems of calibrating top executive pay to some multiple of the lowest-wage (or median wage of) non-exec employees on staff. Far more egalitarian, I thought, naively, why can't we do that here?

I suppose we could, but everyone has to agree to play by the same rules at the same time. Otherwise, the kids that play by the rules get their lunchboxes broken into by the bullies in the sandbox. Case in point, from today's NYT, the founder of AIG, having left the company years ago under a cloud, is now reformulating AIG2 and is staffing it up with employees he is poaching from the comp-capped exec ranks of AIG1.

What to do? Well....how about nothing?

Though he won't do it, this would be a good time for Barack the Professor to stand up and educate the public about Business 101.

"My fellow Americans, as difficult as this may be to accept, it is in our best interests as a nation to act with restraint when we are tempted to limit what senior and accomplished business leaders can earn when they are successful at what we want them to do. As fellow investors in many companies which needed our help during these troubled times, I ask you: should these businesses be hobbled by an inability to attract and pay for the best talent out there? or do we allow them to make decisions in the best interests of getting these businesses moving again and getting taxpayers' loans and investments paid back as soon as possible? In this country, we only want as much government as we need, and micromanaging the paychecks of our best and brightest leaders is not the best step we can take to get this economy moving again, to provide jobs and paychecks for all."