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The more time that passes, it seems the more I agree with President Obama. He has now proposed a salary limit for CEO’s of companies which have received bail out money from the Government. His proposal is a kind of merit pay based upon whether or not the company is successful under their leadership. Ignoring the fact that this policy may make quality executives pass over bailed out companies in favor of more self sustaining organizations, I think the idea of merit pay should be applied to all kinds of businesses in this Country.
I would like to see salary schedules based upon successful job performance, but in no case to exceed $500,000, the ceiling determined by the President. For a few examples, how about: - Alex Rodriguez-- A really excellent ballplayer with a .302 batting average in 2008. If you think about it though, that’s really only one hit every three times at bat. Salary limit: $500,000.
- Angelina Jolie-- She’s sort of, kind of sexy in a creepy way and I guess a good mother, but even she couldn't save her last movie “Wanted” which went almost immediately to DVD. Salary limit: $500,000.
- The Eagles-- Man, these guys were brilliant in the 80’s but that last album they sold only through Wall-mart was a dozer. Salary: $500,000.
- Katie Couric-- Her CBS evening news consistently comes in third in a three horse race. She’s a nice lady and was really in her element on the morning “Today” fluff fest. As a serious news anchor? Salary $500,000.
- David P. Roselle-- As President of the University of Delaware he is the highest paid in the country. I hear it’s a great school, but it might have to do without President Roselle if his salary is limited to $500,000.
In fact, I think this merit pay thing should extend even further. How about limiting Congressional pay every time a Bill has unexpected or negative results? Or limiting teacher pay when 50% of their students can’t read the diploma they are handed? How about limiting a Governor’s pay when their state is mired in billions of dollars of debt? What about a doctor when the patient dies? This is all hyperbole of course because I’m trying to make a point.. When the Government starts setting wages in private industry, we traverse a slippery slope. If they want to nationalize a company and run it, that is a different story, and if that is the case we ought to recognize what is really occurring . I believe that nationalization of American businesses is the ultimate goal of our Government, and then they will have their way with us, setting wages and prices and supply. Until that happens however, I don’t believe the President or anyone else in DC has any right to say what is appropriate compensation for any job. The free market must prevail, and as distasteful as we might find excessive salaries, a person's ability to profit, sometimes handsomely from their experience and inovation is one of the reasons America has enjoyed a success throughout the years shared by no other economy on the face of the earth. If you doubt this, check out any country where free enterprise is limited by government.
The best and the brightest come at a cost, and you must understand that most of these high priced exec’s we are upset about are “fixers” never meant to build long term company health, but rather generate quick cash for themselves and the people that hired them. Like it or not, that is the economic reality of big business in this Country. Calling for limits on executive compensation is just showboating that will have very little effect on the underlying reasons for our current financial problems. Better we stop meddling in private enterprise, letting the good companies thrive and the bad ones fail. Then when the economy turns around as it will, the survivors can pay their top executives whatever they and their shareholders wish, and we’ll all be better for it.
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