Executives and officials should be rewarded on the basis of how well their entity is doing.

With the increasing number of scandals about corporate financing and the way many so-called executives have abused their status, an important point needs to be made.

Whatever system is used to handle business and industry, the pay, benefits, bonuses and such for executives should be tied directly to how well a firm is doing. And they definitely should be cut from the levels of recent times.

The amounts of money some upper-echelon operators in failing corporations have been squirreling away are obscene, all the while knowing their financial ships were sinking. They have manipulated reports, lied to nearly everyone, including themselves, and have had not any regard whatever for the employees who have helped make their huge pay packages possible.

So what happens? The officials manage to build their nest eggs and create golden parachutes, the company fails, and the workers who were in retirement plans and had jobs are devastated. Just look at the horrible stories about employee and stockholder difficulty after the Enron or WorldCom debacles.

Meanwhile, the people who sat in the pilot house and managed to siphon off the money are living handsomely and in many cases building huge residences. They also have spirited away big amounts of money for personal bank accounts.

Had these people been in a system where their finances depended more on the success or failure of their company, would things have soured so badly? Certainly not.

We hear a lot about the new regulations that are supposed to force people such as executives, financiers and accountants to be accountable enough to restore confidence in our system. We do not hear enough about programs that put them in the spot where they will do no better than the company and its employees. In a bad year, there should be no bonuses or pay increases for the executives, especially if there are none for the workers, some of whom may be losing jobs.

Then, let’s turn to government, where legislative groups from Congress on down the list are ever so clever at continually boosting their pay and benefits regardless of what is happening in the cash drawer.

Members of Congress, state legislators and related executives, including the president of the United States, should get no increases in pay and benefits until the books are balanced. They have certain packages when they take office and those should not be increased until there is at least a break-even situation.

Federal government forever has been free with other people’s money, particularly when it comes to feathering one’s own nest. In more recent times, state and local officials everywhere have been dipping their own hands into the till even though the financial picture has not been bright.

Just as corporate executives’ pay and benefits should be tied to state of the company, so should the outgo for public officials be judged.

When an everyday householder finds the spending exceeds the income, changes are dictated or there is serious trouble. So should it be with business, industry and government people.

Just to refresh their memories, the formula is incredibly simple: One must take in at least as much money as is spent. When that is not happening, changes and adjustments rather than rewards are in order.

There is much to be said for the old saw about the importance of “earning your keep.” Too many top-level people don’t do that while they feather their own monetary nests.