Taking a Pay Cut

Kenneth Feinberg, the so-called "Pay Czar" of the Obama Administration recently announced that he and the Administration are taking steps to ensure that companies that were bailed out through payments made earlier this year and last year (by the Bush Administration) would not be able to compensate top executives with bonuses despite the fact that many companies have continued to under perform. You talk about "damned if you do and damned if you don't"; it seems that nothing the administration does anymore is met with any modicum of support in certain circles. I for one think that this decision is a wise one given the fact that some of these executives were the ones responsible for mis-managing and running these companies into the ground.

I recall that there were some executives who cut pay and compensation for their employees yet continued to enjoy the perks of their office as if they were still raking in profits like nobody's business. What I never understood was how these managers had the audacity to compense themselves while many of those who worked for them were left out in the cold or let go from their jobs. True they may have earned their position through their shrewd business sense or high education or even their grand social status in society, but somewhere along the line, scruples have to come in and you have to realize what is the right thing to do. I suppose that was too much to hope for given that these exeuctives were supposed to lead their companies to financial success yet managed to steer them to financial ruin.

Remember when the first bailouts were announced in 2008? There were provisions in it that limited executive privledges related to how much could be paid out or offered to company executives that were already in place. It limited what could be done in terms of offering new 'golden parachute' deals to executives; these were agreements by companies with top executives to guarentee compensation in case of the company being liquidized or declaring bankruptcy and the like. Although at that time there were calls to place limits on the pay that these executives could receive there was still nothing to prevent it. So what happens? Some of these firms got bailout money and then rather than using it to help fix the problems within their company, the executives took their bonuses and perks and then let employees go as a way of compensating.

So what happens? Rather than helping to bolster the economy the companies continued to do poorly and all because high-paid heads of corporations who were brought in to help the companies could follow through on their expectations. Is it any wonder then that people are getting ticked off at the fact that these companies continue to do poorly yet pay out and congratulate theh top bosses for sticking with the company through difficult times? Let's put this another way. Let's say you're playing for the Redskins and you're being paid $200 million a season, people would expect that you'd perform to a level that shows you deserve it. Now assume that you spend the entire time on the bench or in the locker room but you never play. However, because of your contracts you continue to get the same paycheck despite the fact that you aren't playing. Is that fair to the rest of the team?

Opponents to these proposals state that this is a sign that Obama is pushing a socialist agenda. I don't think that's what it is. After spending our taxpayer money for helping these companies that were once the hallmarks of American industry and commerce we want to make sure that these 'players' do what they are supposed to and not 'sit on the bench'. If you invest in something you automatically feel that you have a say in making decisions because you do. If you invest in a company at a certain level you get more of a say. In this case the US government has used our tax money to help these companies so isn't it right that the US government then have a say in what those executives are going to get for their efforts.

Some argue that by instituting pay limitations and denying bonuses (in some cases) then these companies are going to have a tough time getting the 'cream of the crop' to join their groups and further help the recovery. I'm sorry but wasn't it the 'cream of the crop' that screwed up these companies in the first place? That being said then why do we need to give them anything more? If you want the perks then my feeling is that you have to earn them. There's nothing else to say to it. If that's socialist then perhaps that's what some of these greedy executives need to be put under until they realize that they aren't just working for themselves but for the company they work for as well.