At a press conference many years ago, the great Babe Ruthwas once asked how it felt to hold out for an $80,000 contract, a higher salaryat the time than President Herbert Hoover.
Without pausing, Ruth replied, "Why not? I had abetter year."
Compensation, particularly those lavish pay packagesshowered on many of the nation's top executives, have come under angry scrutinyover the past several years, well before the nation was broadsided by thecurrent recession.
Some of the criticism is well deserved, some I wouldlabel as populist backlash.
For example, I did have a problem a while back withformer New York Stock Exchange Chair Dick Grasso lassoing $140 million incompensation, but I balanced that with the fact that the amount had beenapproved by the NYSE's compensation committee.
Yes, it did irk me that prior to the implosion of theauto industry, executives at the Big Three received millions in salary andbonuses while each quarter posting losses that would equal the GDP in someThird World nations.
I am, and always have been, an advocate of merit pay,which is why I have severe mixed feelings about last week's appointment of afederal overseer for executive compensation.
The newly named czar (one of 21 such czars by the way inthe Obama administration - so much for trimming government) will be given broaddiscretion to establish pay levels for 175 executives at seven of the largestcompanies receiving TARP monies.
But in my mind here's where it gets a bit sticky.
Curtailing what isin many cases obscene executive compensation for companies that havebasically jumped aboard the government dole to survive is one thing. I have noproblem with people such as Bank of America chairman Ken Lewis not getting $20million per annum and ditto for the heads of Citigroup and General Motors.
But signs are it won't end there.
Treasury Secretary Tim Geithner basically alluded to thatfact in the appointment of Kenneth R. Feinberg, a well-known Washington lawyer,as the new comp chief, which is just part of a much broader plan to revampcompensation guidelines at publicly traded companies.
The Obama administration plans to adopt legislation togive more authority, and promote more independence, by the committees ofcorporate boards that set compensation for top executives.
That could spell trouble on a number of levels. First thethought of government competently wielding its influence on corporate Americais farcical. Remember this is the same outfit that ran a legal brothel inNevada into the ground.
Secondly I believe such a proposal would discouragelegions of potential superstars from going to companies where the pay levelswere set by bureaucrats.
One can only imagine what the outspoken Bambino wouldhave said if Hoover had attempted to set his salary.
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