I dealt with executive compensation in my corporate life, usually around annual report time when the proxy got filed, revealing all the gory details. I kept an eye on the public media's coverage of the topic, and wondered why average people didn't see red every time a new story of excess appeared.
I listened to the justification for ever higher compensation and bonuses. I appreciated the extension of bonuses to people at my level, although guiltily wondering what I'd done to deserve more than I was already paid (which was not inconsiderable).
So I find myself doing a slow burn every time I read another story about the egregious excess practiced by the Masters of the Universe. These companies are the standard against which all other companies (perhaps enviously) have measured their own compensation practices, justifying ever higher compensation packages as a necessary tool for recruiting and retaining the "best of the best."
And then to read that even at a time when their companies were in melt-down, financial services companies distributed over $18 billion in bonuses -- an average bonus of $112,000 -- well. My mind boggles. And I bet there are a lot of people out there who feel like saying, "Bonus? I got news for you -- your bonus is that you've got a job."
Bonuses, like standing ovations, have become obligatory. But unlike the standing ovation, this costs all of us. And we absolutely must start questioning why they're necessary, and whether they achieve their intended purpose or something else altogether.
"The law may not change the heart, but it can restrain the heartless." Martin Luther King, Jr.
So begins this article from The Motley Fool. I agree. Unfettered markets are not self-regulating; they need wise and prudent oversight to curb our oh-so-human tendency to consider only our own best interests.