Is $500,000 a Year Enough?
A common response from the Right to President Obama's capping of CEO salaries and bonuses at $500,000 a year in companies that take big USG bailout money has been to warn that it will be difficult to attract the best management talent to run those firms.
Uh, wasn't it those geniuses, the 'top management talent' making $20 million a year who ran those companies into the ground in the first place?
Tell you what, just promote a good middle manager who had been making $100,000 a year, and she or he will be very grateful for the job. And before you let them take over, you just give them a three-part test:
1. Fill in the blank:
Buy cheap and sell _________.
2. True or false:
A loan should not be offered to a prospective buyer if the monthly mortgage payments will come to more than 28 percent of the buyer's monthly income.
3. True or false:
A mortgage loan should not be given to a prospective home buyer unless the buyer can put down at least 10% and preferably 20%.
If the incoming CEO can get those three right, the person will be heads and shoulders above the $20-million-a-year screw-ups who destroyed the American economy.
Thursday, February 5, 2009
"Is $500,000 A Year Enough?"
Juan Cole's voice is much-respected on Middle Eastern affairs, but his words on the salaries of the Wall Street lenders make a lot of sense to me.
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Sorry, Renz, I can't find it in my heart to sympathize with complaints from folks who make half a million a year, especially from those who led their businesses into failure. I just can't. They can find good people to work for half a million. To the dissatisfied, "Don't let the door hit you on your way out."
ReplyDeleteThere you go again, being logical, Mimi...
ReplyDeleteJane, I try.
ReplyDeleteIf it were a question of taking 25% less and not being able to make it, I would agree, but if you can't modify down your expectations and lifestyle to accomodate a "mere" $500,000 a year - especially in a situation in which you have both shown yourself less-than-competent and in which the larger society depends on your performance - then you have no right to expect your demands to be met.
ReplyDeleteI very much agree with this post.
ReplyDeleteMark, exactly. I wouldn't apply the 25% rule to someone making $20,000 a year. The salaries of the CEOs were obscene even in the recent so-called good times.
ReplyDelete