Leave pay to companies
James Pethokoukis is a Reuters columnist. The views expressed are his own the Discount Moncler moncler vest Coats populists who really, really want moncler outlet to make Wall Street pay by slashing their pay, Treasury Secretary Timothy Geithner certainly isn giving them what they want.
Yes, the top executives of the remaining TARP firms seem destined moncler outlet location to be salary serfs to moncler jackets on sale the czar Kenneth Feinberg.
moncler sale Of course, moncler outlets uk it hard for even the most die hard free marketeer to feel sorry for financial firms that mismanaged their businesses terribly, took https://www.moncleronlineoutlet.com government bailout money and now find themselves under Uncle Sam thumb.
But moncler jackets toronto as for everyone else? Well, here moncler jackets men how Geithner put it: are not setting forth precise moncler outlet uk prescriptions for how companies should set compensation which can often be counterproductive. Instead, we will continue to work to develop standards that reward innovation and prudent risk taking, moncler coats without creating misaligned incentives. worse for those who wanted moncler coats sale the Treasury secretary to bring down the hammer, he went on to highlight Official Moncler Outlet how the financial sector is already making changes on pay and how he looks forward to a conversation Yes, self regulation in action! Hardly what the torch and pitchfork crowd craved to hear.
That just too womens moncler jackets bad. To his credit, Geithner seemingly understands his goal isn to punish, but to moncler chicago play a constructive role in nudging financial industry compensation in a direction that better connects risk and reward.
cheap moncler Moncler Factory Outlet jackets Ultimately, moncler jackets kids it is shareholders and management who should decide what executives make. Indeed, Geithner recommendations centered on moncler jacket online empowering the Securities and cheap moncler jackets Exchange Commission to give shareholders a stronger moncler jackets outlet online say over executive pay.
And changes are cheap moncler taking place. Firms like Credit Suisse, Morgan Stanley and Goldman Sachs have moncler coats cheap tried to rework pay systems by allowing bonus clawbacks, for instance.
Good thing, too. Government has a moncler outlet mall terrible record in rejiggering executive compensation. Example: Legislation back in 1993 intended to rein in corporate pay by eliminating the tax deductibility of executive compensation above $1 million unless pay was linked to performance.
buy moncler cheap moncler jackets wholesale jackets But one unintended effect of the law, academics James Wallace and Kenneth Ferris have found, that executives total compensation actually increased in the post 1993 period thanks in big part to the moncler jackets outlet use of stock options.
cheap moncler sale Not surprisingly, executive pay issues moved back into the spotlight earlier this decade after Enron and other corporate scandals. One part of the 2002 Sarbanes Oxley Act prohibited executive loans. As with the 1993 law, corporations responded in ways perhaps not anticipated by legislators.
Signing bonuses and fatter severance packages became more popular just the sorts of things now being frowned upon.
What sort of compensation might work better to align executive compensation with long term shareholder interests? A group of academics Alex Edmans of Wharton, Xavier Gabaix and Tomasz Sadzik of New York University and Yuliy Sannikov of Princeton have devised an approach based on what they call incentive accounts. bonus clawbacks, this system doesn cheap moncler coats for women try to recoup money already sent out the door.
Here is how it works, according to their new study: Executive pay is escrowed into an account, a fraction of which is moncler outlet store invested in the firm stock and the remainder in cash. The account would be rebalanced each month according to company discount moncler outlet guidelines moncler jackets rules would certainly also vary by industry and by how close the executive is to retirement.
cheap moncler moncler coats for kids coats The gradual vesting of the account cash from a sold stock cannot quickly withdrawn even after retirement, the CEO to consume while simultaneously deterring myopic actions. other words, the goal is to promote long term thinking over short term manipulation.
monlcer down jackets For instance: If company stock soared, the executive could sell, though the proceeds would say in the account. If the stock then dropped, that money would have to be used to buy more stock. He couldn just take the money and run.
Is this the best moncler outlet canada system out there?. Maybe, maybe not. Or maybe for some firms or sectors and not for others. But that is why you don moncler coats for cheap want a one size fits all plan devised in Washington, particularly one with political rather moncler jackets cheap than economic goals. That is a pothole that Barack Obama and Timothy Geithner have so far avoided.
Forget populist dribble. If the directors of these banks and other corporations were in any other field, misleading (or outright lying) to investors and profiting from selling (inflated) shares with insider knowledge that the bubble was moncler coats for women about to bust would constitute fraud, and they wold fall under the RICO act.
When is the government going to actually do the ethical thing, and prosecute moncler outlet online store and financially punish white collar criminal activity with discount moncler jackets the same vigor as other areas of society?
moncler outlet Take their homes, yachts, cars and assets, moncler outlet usa and trade it for prison jumpers and put them on road gangs.
moncler sale outlet That will finally end the outright theft of the American dream and economy at large.
moncler outlet sale Posted by Brian Foulkrod Report as abusive
moncler outlet store Salary caps are needed to reel in and control the excessive and corrupting greed that plagues Capitalism. $1 million absolute maximum yearly income ($500 per hour based on a 50 week/40 hour work with 2 weeks unpaid vacation).
As we seen in the Wall Street Journal, massive abuse and corruption is aided and abetted by high salaries. Two of the top earning hedge fund managers netted over $2 billion personal profits even as shareholder values plummetted.
Looking at another CEO Dr. William cheap moncler jackets outlet McGuire of United moncler jacket outlet Health Group netted $1.6 moncler jackets mens billion in salary, stock options and benefits moncler coats for men in 2006 ($800,000 hourly salary based on above 50/40 formula) to aid and abet his naked greed as medical premiums skyrocketed and continue to gouge American families.
Even GM former CEO Rick Waggoner who mismanaged GM into bankruptcy and was finally fired for his incompetence was awarded a $20 million golden parachute to reward his parasitic service.
moncler outlet online When left to their own devices we see that CEO routinely use corporations as their personal moncler outlet online cash machines, and have no loyalty to the long term viability of the corporation or shareholders.
cheap moncler outlet The only practical solution to stop the excessive abuse in salary compensation is to mandate salary caps to encourage fair play and honesty in the business world.
moncler mens jackets Posted by First Report as abusive
cheap moncler I prefer to see the legislators look harder at tax, and tax minimization by top earners (I not against paying the market rate for top workers).