Unconscionable Executive Pay
Posted on March 19, 2008 Comments (6)
WaMu: Skip customers; save the execs
The board decided in February to use different performance yardsticks that could make it look like Killinger and other top executives were doing great jobs — and all but ensure them millions of dollars in bonuses for 2008. Those huge losses piling up because of subprime loans and foreclosures? At bonus time, the bank will ignore them.
The behavior of executives that take what they have no right to in unjustifiable pay schemes continues to be a disgrace. Thankfully more people are shedding light on the unconscionable behavior. Excessive executive pay is both a sign of awful ethics and a driver of bad management action. I add two new diseases of western management to Dr. Deming’s 7 deadly diseases; massively overpaid executives is one.
Related: Tilting at Ludicrous CEO Pay – Obscene CEO Pay – “Too often, executive compensation in the U.S. is ridiculously out of line with performance” Warren Buffett
6 Responses to “Unconscionable Executive Pay”
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March 20th, 2008 @ 10:50 am
It’s definitely demoralizing to their employees. Wouldn’t make them say “whoo-hoo!” as their TV ads say.
Sounds like less of a “performance incentive” (if that worked anyway) and more of an entitlement. If a “bonus” is guaranteed, basically, isn’t that salary, and aren’t there important tax implications to the company? At what point is that sort of behavior considered fraudulent?
I don’t think the “visibility” into this problem is really leading to any significant change. Maybe you need to start prosecuting folks and set some examples.
March 21st, 2008 @ 5:32 pm
To fix the housing situation the normal american needs to make more money.
How to do this? Pay our executives the same pay rate they would earn in asia
or europe. Take the extra “winnings” and give the normal person a pay raise.
The housing bubble ATM hid the fact that the average american income has not been rising
with the cost of living.
October 22nd, 2008 @ 8:33 am
I hope we don’t make excuses about how those taking what they didn’t deserve were somehow excused because they paid large sums of money to others to say such behavior was acceptable…
April 6th, 2009 @ 10:25 am
Several of those taking the most from corporate treasuries in 2007, taxed the American public to replenish those treasures (and then proceeded to pay out “bonuses” to their compatriots from those treasuries and re-leveraging themselves with asset purchases). Merill Lynch, Goldman Sachs, American Express and Morgan Stanley required tens of billions of dollars in bailouts from USA taxpayers in 2008 and 2009…
April 20th, 2009 @ 12:55 pm
Participating with Kiva is a great antidote to reading about the unethical “leaders” taking huge sums to run their companies into the ground…
April 3rd, 2011 @ 10:53 am
[...] The problem with most news coverage is they see Trsocean as a special cause. The act of Transocean’s senior executives is entirely consistent with the actions of other senior executives. The details in the case of Transocean are a bit more sensational but the attitude that senior executives are owed exorbinant pay no matter what the results are in the standard practice. If results are bad, companies routinely revalue options to reward senior executives. When times are good senior executives are lauded as visionary, brilliant, decisive and responsible. When times are bad senior executives are lauded and performance is excused as beyond their control and certainly their rewards should not be limited due to bad results. [...]