What does the executive-pay czar mean for America’s capitalistic values?
Of the several so-called czars appointed by the Obama Administration, the most recent appointee seems to be the most controversial. According to the New York Times, the appointee will have the right to review the compensation for the 100 most highly paid employees of private companies and any other executives.
The Treasury Department on Wednesday appointed a well-known Washington lawyer, Kenneth R. Feinberg, to oversee the compensation of employees at the seven companies — the American International Group, Citigroup, Bank of America, General Motors, Chrysler and the financing arms of the two automakers.
He will have broad discretion to set the salaries and bonuses for their five most senior executives and their 20 most highly paid employees.
The new plan also calls on Congress to adopt legislation that would let shareholders vote on pay levels and require public companies to strengthen the independence of board panels that set executive pay.
Czars have already drawn critism because of the lack of oversight constitutionally required. Even Democrats are speaking out. Sen. Robert Byrd (D-W.Va.) said in a Fox News article that czars are a slick way of governing without having to answer to Congress.
Here’s a link to a web site with a list of Obama’s Czars.
Feinburg, however, isn’t just operating under a complete lack in checks and balances, he will also be walking the thinning line that separates private companies from government control in America’s so-called capitalistic market.
Even those who advise Obama see the conflict. According to the New York Times, there’s a strong reluctance among some of President Obama’s advisers to intrude more deeply into corporate boardrooms, government officials said.
While czars may not be new in Washington, the idea of controlling private companies under our capitalistic values sure is.
Then again, after billions of dollars of bailout money was given to failing companies and the outrage that resulted in AIG bonuses, it seems fitting for Obama to appoint a czar to oversee and control executive pay. We’ve already sacrificed our capitalistic values to save banks and car companies, why not for the pursuit to protect American tax dollars from going into greedy executive pockets?
If not by a single person, is there another way to protect taxpayer money that involves more checks and balances? Or is this economic struggle best handled by one person, just like in times of war when decisions need to be made quickly without having to go through a complicated and drawn out bureaucratic system?
Is this a sign of change in how our government will be run? Are we slipping away from our captitalistic system into a more socialist type system?
……..If a company is not desperate or stupid enough to take government money, then the government should have zero to say regarding compensation of any high paid employee. Soon we will be needing a new federal agency to regulate the all the czars, and just how much does a czar make?
I want to be appointed Czar to oversee the czars…
Actually, the new “czar” will only have say in companies that took government (taxpayer) money. Since having to beg the people for a bailout is pretty much the definition of failure, I have no problem with the people making sure the employees in charge (CEOs) don’t reward themselves for failure.
As for the “say on pay” rules, I have no problem with giving the owners of the company (stock holders) the right to at least comment on what their employee (the CEO) is paid.
Of course, if you are a real engine of capitalism, found a company, invest your own money, and don’t sell a majority of the ownership to the public, then you won’t be affected by these rules. In short, if you own the company, pay yourself whatever your company can tolerate. If someone else owns the company, then they should have the say on how much they pay you.
If I borrow money from my neighbor because I’ve proven myself a financial failure or mismanaged by assets, I pay my neighbor back before I start granting myself luxuries or bonuses….
If you don’t like those rules, don’t ask for a bailout.
It’s just that simple…and it’s the right thing to do.
I’m tired of corporate welfare going for corporate bonuses.
There’s a new sheriff in town.
The line being drawn here is very simple. As long as a dollar of my taxes go to any form of bailout of any private business, our government has not only the right but the obligation to limit executives’ pay AND to oversee their corporations’ financial operations. This isn’t socialism or a repudiation of capitalism. It is imposing fiscal sanity on the greedy idiots who are running big business into the ground.
President Obama has made it clear that neither he has no desire to run the banking or auto industry. That said, as long as these rapacious clowns take our handouts, and until they find people who DO know how to run their companies, the executive branch of the government has every right to restrict, control, and oversee all aspects of their operations.
My biggest fear is that we are turning billions of dollars over to the same theives who got themselves - and us - in this mess in the first place. Neither the economy nor global competition got these profligate corporations billions of dollars in debt. They did it to themselves.
As a footnote — we are seeing the logical result of, and reaping the damage wrought by, Ronald Reagan’s laissez-faire capitulation to the gods of industry, and the decision to let the boys be boys in the 1980s. Capitalism is not a bad thing. Unbridled, unrestricted and unmonitored capitalism IS, and always will be.
Shares of stock are property of the owners i.e. shareholders. These shares represent a portion of a firms assets. Given that political interests are seeking control of these firms i.e. the Republican party. It is in the interest of the shareholders to limit embezzlement, looting, and fraud as well as other forms of politically protected racketeering. Most high powered managers are in league with the Republican party. The same party that wants to open trade with Communist China, Cuba, and Vietnam while attempting to leave Korea to the Communists. They seek for the purpose of exploiting communist slave labor in concentration camps. They have used slave labor in Burma and other parts of Southeast Asia. These national socialist members of the Republican party are out to enslave millions of poor people. It is prim and proper to regulate these folks in order to secure our investment period. It is no wonder they tempt the Democrats and point fingers at their mishaps. It is necessary to secure the property interests of millions of stockholders and it is good law.
It’s only a matter of time before this slope gets steeper. Who’s to say this practice can’t extend to ALL companies the govt may give tax money to? The small startup who gets a grant, the local business who gets a federal loan, the defense contractor who builds a plane, etc.
People, use your logic skills to look into the future to see what MAY happen. Chances are, they will.
I agree that if the tax payer loans a company money they should have some say it what goes on. However, who do you hire to decide what someone else makes? There are a select few in this country that are smart and educated well enough to bring a company along and make it successful. How can we limit companies such as GM to only paying for someone that is not capable of bringing them back to a successful company? The pool of people that are capable is not that big, they can move on to companies that can afford them. The thought is good, the plan is very much like everything that is going on in Obama’s administration with no structured plan. The general idea seems to be, create a new position, hire someone with taxpayers dollars, then figure out what they are going to do and how to do it. We are headed for socialized government more everyday.
If they get public money, even in the form of tax breaks and other incentives, then the government has the right and responsibility to have a say on executive compensation. You can’t possibly say that you need tax breaks to survive as a company, and then pay your CEO 100 million in salary and options. No one man is that important to a company to be worth 1% of it’s net worth.
Giving the shareholders more say in compensation would be a nice change too. Right now there is a cadre of execs that all sit on boards together and basically make sure they ALL get paid no matter what. CEO A sits on the board of Company B along with his other CEO buddies and basically votes for exorbinant salaries because he knows they will do the same for him when the board meets to discuss his salary. It’s a sham and the ones that get fleeced are the shareholders.
How about this novel idea for capitalism….stop lending taxpayer money to companies that mismanage themselves into trouble. Capitalism allows for failures. When a company fails, another will be there to take it’s place.
Wow that was so hard.