This week, elected officials in Washington, D.C. are debating whether or not to give one unelected official, Treasury Secretary Henry Paulson, control of over $700 billion of your money to stabilize the country’s financial system. Specifically, your money will be used to buy mortgage-backed securities held by tottering financial institutions.
The debate has split both political parties. Earlier today during the Congressional debate over the Wall Street bailout, Congressman Ron Paul quipped, “I don’t know who the conservatives are and who the liberals are.”
One thing that appears to be uniting conservatives and liberals in the debate is their insistence that executive compensation be reined in at any firm receiving one dime of taxpayer money. I couldn’t agree more, but I’m not holding my breath that the final package sent to President Bush for signature will contain any meaningful limit on executive compensation.
As a PR person, it’s occasionally been my job to answer reporters’ questions about executive compensation packages. Generally, the resulting news stories are straightforward and the questions are easy to anticipate. They seldom make the front page — even of the business section.
But guess what? Executives don’t like them.
After a major newspaper wrote a story detailing the compensation package of a CEO for a company I once worked for, the CEO was furious. My boss calmly replied to his rant that there was one way to stop these kinds of stories from being published: “Don’t take the money.”
Well you know what happened. The CEO shut up, the checks continued and so did the stories, like clockwork, every time we reported the CEO’s salary and compensation in an SEC filing.
Perhaps the public has had enough with these excesses. But I’ll remain unconvinced until I start to see shareholders voting out the board members who approve these payday bonanzas. Ultimately, that’s who needs to rein in executive compensation, not Congress, but the shareholders of the companies who offer these outrageous packages.