Tuesday, February 10, 2009

Shout-Out: Yes Jack... but we need MORE salary limits

Hmmm. quoting Jack McHugh, who writes about:

Alan Abelson, writing in this weekend’s edition of Barron’s, discussing the question restricting the bonus pay for banking executives:

“Now, as one who has long felt that “smart banker” is an oxymoron, we might be expected to gush happily that bankers, if they scrounge for money from the government, have to learn somehow to get along on half a million bucks a year. But, in fact, it worries us.

“Not because it is going to deprive the financial industry of uncanny and irreplaceable leadership (who else could have so cleverly contrived to make the sector what it is today?). No, the reason we are all for the fat cats keeping their bountiful bonuses and not being lured away by greener pastures is far more transcendent.

“What inspired this unwonted generosity on our part, we readily admit, was a letter in the New York Times which warned that, absent those bonuses, investment bankers and their ilk would be impelled to seek employment elsewhere. And, the writer asks, do we really want them building our houses, teaching our children or driving our cabs? We wholeheartedly agree: Obscene bonuses are a small price to pay to forefend such dread prospects.” (source: Barron’s article )

Jack then goes on to discuss the real issue...

Who do we punish more, the bankers or our society, when we try to limit compensation of banking executives? Though the previous nine questions are meant to be rhetorical, this last one merits an answer and I will side with HCM’s Michael Lewitt in providing one. Mr. Lewitt has long maintained, and I agree, that far too much talent and brainpower have been induced to chase Wall Street bonuses in lieu of pursuing productive careers in industries that actually make the things that raise our long term standard of living.

If more societal resources are allocated toward real engineering and away from the financial kind, then perhaps it will represent one of the silver linings generated by the very dark clouds still hovering over the financial world. Far from representing the death of modern finance, having bright people and newly minted MBAs flock to technology-related careers instead of ones on Wall Street would eventually breathe new life into our entire economy. --Jack McHugh--

Very nice Jack.

One more idea (that I have...)

Instead of limiting this $500K compensation per corporation, we need to make this a nationwide and industry-wide effort.

We need to take this opportunity to reform our entire system of corporate compensation.

I say (here) that we need to reform our executive compensation system become fairer, and 'gentler'.

My proposal of a maximum corporate salary (for anyone) of 20 times the least paid employee in the company.

And Executives (and ALL Millionaires in our country) will need to START to pay their FAIR share of taxes.

I propose a new Minimum Millionaire Tax (MMT) which will start at 1% of a person OR company's GROSS income. No deductions, this will be one percent of the GROSS...

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