Congress opens hearings on financial meltdown with focus on execs' compensation
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31 Comments
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0
rjd_jr
This is exactly what I was referring to in previous posts. Fuld feels "horrible" about what happened? His arrogance and actions (and inactions) resulted in the collapse of a legendary financial institution and destroyed the lives of so many. And for this he was compensated handsomely.
Notice how he does not apologize one bit for his hubris? He is laughing all the way to the bank while his victims have no jobs, lost their savings, etc. etc.
And then people question whether execs/CEO's committing suicide is an honorable thing to do?
0
adaydream
This is the biggest thing killing us. Credit Default SWAP.
http://en.wikipedia.org/wiki/Creditdefaultswap < :-)
0
tkoind2
Spend one day talking to investment bankers and none of this will shock or surprise you. Traders and their execs think about today and maybe 5years forward. They think about this year's bonus and raising the bar on their profits before thinking about anything else. They are self important neo-autocrats who believe their own propaganda about the "art of investing" and "visions of the future".
And there has been not a soul to bring them back to reality for a very long time now. Deregulation has given them a blank check to do what they want for a long time. Essentially gambling with the global economy. And making massive amounts of money along the way.
Meanwhile they have cut full time jobs and replaced them with low paying temp positions, cut costs by doubling up on work load for workers and cutting back on benefits.
These are not moral people. These are money people. And it is no wonder what so ever that they have burned the global economy while making massive money themselves. Did anyone think these guys would lose anything they could avoid losing? Or give something back? If you believe that you are naive.
Moral of the story? We need to regulate and control the private sector because it CAN NOT BE TRUSTED to do what is in the best interests of the public, of the nation and of the world. Period!
0
tkoind2
As for Fuld. If we fall into a depression he should be the first against the wall.
0
thepro
Executives should get bonuses for doing a good job. For doing a bad job, ie. running the company into the ground, they should have millions taken away from them.
0
timorborder
Oh the stench! When a corporate giant dies, it is sometimes amazing what comes out of the rotting carcass.
0
Nippon5
Enron anyone?????
Another example of how money is thrown around by people who are saying at the same time, we are in trouble... Sounds like our candidates and their Millions wasted on this campaign..
We need change blah blah blah... People are going hungry Blah Blah Blah.... why dont you send 300million to them then Senator!!!!
Seems those with money cry about how others are not helping the poor man all the while not sharing their large bank rolls......
0
tkoind2
thepro: Sure executives should get paid good money for doing a good job. But how do we define good money? Do people at the top of a big company deserve $20million USD? $200million USD, while the guy keeping their IT working on a consultant basis is making maybe $50K a year?
Compensation in the private sector reeks of some kind of neo-monarchy of very wealthly leaders and struggling workers. Wealth in a company should be shared with the people doing the work.
If the janitor doesn't keep the place up, how can anyone work? Or the guy keeping the IT cables working, try doing all the automated tasks without him. Or the back office girl keeping things rolling with AP etc...
Sure the stars of the show are the execs and traders, but none of that is possible without an infrastructure of normal working people doing long hours and killing themselves to enable those guys. Yet all the wealth remains with the self-choosen few. So just how fair is that? NOT!
Then when things go crashing down, these guys bail out on golden parachutes while the workers end up on the dole or under a bridge somewhere. Again how fair is that.
The planet belongs to all of us, not just a choose priviledged few. We normal workers do all the fighting and dying in wars, law enforcement and dangerous jobs. We do all the hard every day work. We feed you, we clothe you, we build your cars, make your computers and blackberrys. Your can live the lives you do because of us.
So I think it is time for working people to demand fairness. Rational wages and massive taxes on anything exceeding them. Liability for these guys when the screw things up. And broader, stronger regulation to keep them in check in the first place. Enough of letting corps run amok. Time to reel them in and demand that they behave as good citizens or pay dire consequences. Globally!
0
Nippon5
tkoind"
I agree 100%
0
SezWho2
I hope it will not be lost on Congress that accounting firms are one of the chief architects of compensation packages. Moreover, they may even be designing compensation packages for the same companies they are auditing. I'm somewhat skeptical that this situation could have ever occurred without a leg up from the accountants.
I don't have any problem with executive compensation per se. American executive compensation is out of line with that paid in other countries, but that isn't so bad as long as the executives produce results--honest and accurate results. Bonuses can be paid even when losses occur if the executives overall goals are being met. For example, if a life insurance company dramatically increases sales of whole life insurance, it's profitability may decline or even run at a loss, but that does not mean that the company is not better positioned for future profits. Nonetheless, compensation must pass the Babe Ruth test:
http://en.wikipedia.org/wiki/Babe_Ruth
However, speaking as an ordinary run-of-the-mill earner (US average income in 1930 was about $1,600 per year), some of these guys do have compensation packages that border on the obscene for results that can only obscurely be counted as constructive.
0
SuperLib
I agree.
0
skipthesong
Executives should get bonuses for doing a good job. For doing a bad job, ie. running the company into the ground, they should have millions taken away from them."
And so when a person does a bad job or takes too much from the company, he/she should then be fired.
Are you all telling me, if the shoe had been on the other foot, you wouldn't take that money?
0
adaydream
Too bad American CEOs of bankrupt companies don't commit suicide like those of other countries? < :-)
0
thepro
Yes, that's what I'm telling you. I'm one of those people with a conscience.
0
tkoind2
A lot of us are people of conscience. Not everyone lives only for money. Some of us believe in the distribution of world resources so that everyone can have what he or she needs.
We have been born and bred to think that everyone only cares about their piece of the pie. Some people are ok making $20mil a year while their company lays off family heads of household who were only making $40-$50K. Some people are happy lining their pockets while their customers and ordinary works are starting to wonder if their tiny savings will be safe or if they will have money to pay rent in a month or two.
I say the majority of us, those not making massive incomes fight back. We hold the immoral selfish minority accountable. Accountable to our communities, accountable to our countries, accountable for their actions on the environment, employment and work life balance. And most of all accountable for their mistakes.
No one forces someone to be top player in these companies. These people have a lot of power and should have a lot of accountability to go with it. If they don't want the responsibility, they can do something else. But once you take on that role you should be accountable to the workers and to the people.
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tkoind2
adaydream. They don't have to. They don't lose when they screw up. They just go on to write books about it and join the lecture circuit. Meanwhile their former employees see their dreams die.
Suicide is not the answer. But prison might be a very viable alternative.
0
Sarge
I see Wall Street took another big tumble today. I guess the $900 billion pork bill wasn't enough.
0
coulrophobic
Franklin Raines accepted 90 million in bonuses from Fanny Mae.
And then he went to work for Sen. Barack Obama's presidential campaign.
0
smithinjapan
sarge: "I guess the $900 billion pork bill wasn't enough."
The one your president desperately pushed for after bungling everything up... I know... it's disgusting! Imagine how easily all of this could have been avoided by him and his people in the White House. Or imagine, even if they didn't do anything to prevent it, as is the case now, and had not illegally invaded Iraq, they could easy have covered the $700 billion and tripled it and still not be in as much trouble as they are now. What a waste... and I'm glad you can admit it, sarge.
0
sdmsec
How much more will this witch hunt cost us taxpayers?
My guess is that congress will spend millions identifying some sacrificial lambs. None of the blame will belong to the past several congressional terms or presidential terms, of course.
It's good to know that even in hard times our representatives can find a way to squander more money on frivolous finger-pointing (always away from themselves) without really addressing the underlying problems.
0
Nessie
Not a witch hunt. A show trial.
0
Nessie
Well one things for sure. He should definitely pick up the lunch tab.
0
coulrophobic
Certain posters here really do frighten:
"The one your president desperately pushed for after bungling everything up... I know... it's disgusting! "
It is Congress which ultimately controls matters related to the budget.
Congress is not controlled by Bush's party.
Even former president Clinton is blaming the Democrats for most of this.
0
taniwha
Yes, that must be right. Lets just say the first year of the first term of the Carter presidency was year zero.
Idiocy.
0
taniwha
Or on the other hand, lets just say year zero began the first year of the Carter presidency.
Still idiocy.
0
tclh
The ship is sunk and the captain wants a medal for reward?Completely illogical.
0
SezWho2
All I can say is that, if it were me and the bonuses and so on were in my contract and if they were standard in the industry, I'd take the money. I expect that I would have done my best to earn the compensation. I also suspect that I would not have acquiesced to illegal schemes without resigning (not necessarily blowing a whistle) or without being first fired.
I don't think the problem is executive compensation. Sure, it's out of scale, I think. But it's not the problem. Employees (including executives) should be paid what has been promised when they have made good faith efforts to do their jobs. A bigger problem is illegal activity or avoiding required oversight. A still bigger problem is our addiction to debt.
0
kjunluc2
Criminally outrageous! No way to describe it without profanity. There is not one member of the human race worth the money these pukes are getting.
We could use a Robespierre in this country. Not suggesting guillotine but lots of 6 X 8 cells would be great.
0
Good_Jorb
There is a line between legitimately getting paid and prosituting your skills to the highest bidder. The executives were well past that line.
The boards are the ones that OK compensation packages not the accounting firms.
0
HonestDictator
I've always had an idea about this. In cases like that where the company is making a profit, why not take that CEO yearly bonus and spread it reasonably accross the board? Give the CEO a REASONABLE bonus or so in addition to his already 6-7 digit income, and the rest should be additional year end bonuses for the all the other company employees (no matter how low their position across) as well. That would be more encouraging for everyone to take their jobs seriously. Of course if they don't meet their job requirements then you should be more likely to let them go.
If I had the income like these guys have and was running a business I would prefer to spread the wealth to the entire company so to speak. This is the imaginary "Trickle down" effect that the Presidential administration has always been touting to reduce taxes for wealthy corporate maniacs, but they have barely an ounce of decency and thrive off of being arrogant and extravagant.
0
SezWho2
Good Jorb,
Yes, the boards are the ones that OK compensation packages for executives. However, board OK is often a rubber stamp and board members are likely to have similar packages from other firms.
Accounting firms and other companies with compensation consulting services design packages, but they design packages to please the executives at the companies whose books they audit. Independent accountants are not always independent (if ever). Audit dollars are huge and ancillary consulting cannot jeopardize it.
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