Sunday, November 16, 2008

Inordinate Pay for Ordinary Work

Executive management of public companies is ordinary work for people with experience, skill sets, education, and an ability to lead employees and craft business organizations.  These management attributes are not rare resources. There are people around the world who can perform the jobs of CEO and vice-presidents in business enterprises.

However, for the past ten to fifteen years, top U. S. executives have been paying themselves as if they were extraordinary people.  This mindset of regarding themselves as a rare breed continues to this moment. Even as leading companies face bankruptcy, pay bonuses are planned for their executives and managers. Executives' rationale for continuing to pay bonuses is fear of losing talented employees.  I believe such reasoning is nonsense! There is little talent in executive suites that can't be replaced within a reasonable time.

There are experienced and retired military officers throughout the country who could move into these executive positions and reshape these organizations into competitive enterprises.  I believe CEOs and senior staff members in troubled companies could be replaced within a year by better managers and exceptional leaders at a fraction of the existing cost. 

I believe inordinate executive pay is the root cause of the problems on Wall Street and within financial institutions.  The sooner the new administration corrects executive pay structures, the sooner citizen and consumer confidence will return and economic recovery will begin.

Have a good week!

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