Thursday, March 17, 2011

Executive Accountability

My biggest issues with the finance industry hasn't been the intrinsic evil of bankers. There is nothing wrong with bankers per se (just as lawyers are not genetically bad). Rather, it's been the outsized bonuses and compensation many of them recieved relative to the actual risk they take. And that's true of executive management across the board in large organizations. Pay should reflect the business value you bring and the risk you take. And the majority of our highest paid elites don't add value equivelent to their pay while taking on near zero risk.

Another way to put it is when a major scandal breaks and an executive claims that there's no way they could have known what they are really saying is "Even though I took this job at an exhorbitant compensation I never thought you'd actually expect me to deliver on that investment".

That's why I appluad the FDIC's decision to hold WAMU's execs to account. The bottom line is that each of these execs accepted multi-million dollar compensation packages in exchange for managing the company. My point is that they either intentionally mismanaged the company or lied about their ability to manage the company. Either way, they took the risk and it's good that it's coming due.

3 Comments:

At Thursday, March 17, 2011 11:42:00 PM, Anonymous Compensation Lawyers Liverpool said...

Compensation Solicitors Liverpool for Law and Lawyers...

 
At Sunday, March 20, 2011 4:30:00 PM, Blogger Old as dirt said...

Saint Patricks Day, and that's all you've got?

 
At Sunday, March 20, 2011 8:45:00 PM, Blogger P-Dog said...

Are you complaining about my blogging output????

 

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