Feel their pain / LJWorld.com

Archive for Friday, November 28, 2008

High-flying U.S. executives need to get back to earth and recognize how their excessive perqs and bonuses look to struggling Americans.

J-W Editorials

November 28, 2008

It’s more than a matter of appearances; it’s about taking responsibility. CEO’s of the Big 3 U.S. automakers take expensive private jets to Washington to ask for billion-dollar bailouts of their struggling companies. Bank presidents and other top executives look at million-dollar bonuses at the same time their companies are laying off employees.

What is wrong with this picture?

It’s not that these executives aren’t important to their companies, but it doesn’t take a rocket scientist to see that the lavish perquisites that the public might accept when a company is doing well aren’t going to set as well when people are losing their jobs and executives are coming to Washington with their hands out. It’s like someone wearing a diamond ring and a fur coat while looking for a handout on a street corner.

President-elect Barack Obama still has to prove himself as a president, but there’s no doubt that he is a smart politician, and as such, he knows when something just looks bad. Earlier this week, Obama told an interviewer that the auto executives “are a little tone deaf to what’s happening in America right now” and suggested that big-business executives forgo any bonuses this year to show their willingness to share the struggle of many of their employees.

Hopefully, the nation’s highest paid executives understand what their workers are going through right now and realize that giving up their bonuses could at least be a show of solidarity with those who are far worse off than they are.

The salaries and bonuses that have become common for top executives in recent years were starting to raise some eyebrows even when the economy was strong. During the current difficult times, they are an insult not only to their struggling employees, but also to the taxpayers who are being asked to shore up companies that have made questionable business decisions.

When the people who made those decisions climb into their private jets or pocket a multi-million dollar bonus, it’s no surprise that both their employees and taxpayers do a slow burn. Should taxpayers help companies that can afford such excess?

Appearances are one thing, but the abuses by many in the nation’s largest investment and banking firms goes far deeper. Even more concerning is that such disregard for fiscal excesses helps feed the “class vs. class” philosophy that some in the United States are trying so hard to promote.

Discussion

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28 November 2008
at 12:39 a.m.

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niles (Anonymous) says…

Good job, Jim Taggart. It is the people's *need* that we must consider. You are clearly a man of the people.
28 November 2008
at 8:39 a.m.

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KLATTU (Anonymous) says…

“The salaries and bonuses that have become common for top executives in recent years…”Recent years? This plan has been in effect for at least 28 years. Considering that the ultra-rich were able to fleece the companies they were in charge of, and then collect hundred billions of taxpayer dollars as a reward, I'd say the plan is coming together just as they'd hoped. No one has to try very hard to promote a sense of “class vs class”. I'm feeling it today as I reorganize my finances so I can afford to visit the dentist.
28 November 2008
at 8:51 a.m.

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edjayhawk (Anonymous) says…

Interesting coming from Simons who has the highest employee turnover in the city and pays it employees pennies…
28 November 2008
at 10:14 a.m.

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JackRipper (Anonymous) says…

I think it is funny that the car executives said they had to fly private jets as it was required by their company. Curious when we hear so much of the top CEO's leadership skills that they can't even decide how they get somewhere and if they can't figure out how to get around that one how do we expect them to get out of any of their other messes?It is interesting how concerned we are about jobs now and lose of companies when we didn't do anything about it when it meant making more money for wall street. Entire industries just disappeared from the American scene while wall street benefited and now we are suppose to bail them out? And it isn't bad enough that they sold out America but they over leveraged all the record profits they were making and we sit wondering how all those deals will come back and haunt us.
28 November 2008
at 10:30 a.m.

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Fort_Aubrey (Anonymous) says…

Sounds like Dolph ought to call up his friend Alan Mulloly and ask him, between Lawrence friends, about that $ 21 million per year compensation.And I guess the Senior Center could return its new van in protest.
28 November 2008
at 10:42 a.m.

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Newell_Post (Anonymous) says…

I don't have a problem with the whole private jet thing. That is a red herring. The company requires it for security reasons. I used to know the guy who was head of GM in Europe. He had to have security guards for himself and his whole family at home and everywhere they went due to previous incidents. Also, flying commercial wastes a vast amount of time. On a good private plane, they can do phone calls and other work that you just can't do on a commercial flight.Taking bonuses and large pay packages is the real problem. In management theory this is called the “agency problem.” When the managers of the business are not the owners of it, they respond to their own incentives and not to the interests of the business. Sometimes those are congruent and sometimes not.
28 November 2008
at 10:53 a.m.

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JackRipper (Anonymous) says…

I agree, shoot even heads of state universities feel they are entitled to the same mode of transportation but it gets back to what the CEO gets away with because the company made them do it, they make they take those bonuses because they are so valuable and gosh what can they do. Shoot if the car companies were smart they would be hiring Japanese CEO's who can make money and do it for a lot less pay.As far as security in this country I think it is a bit different then in Europe when they had home grown terrorist groups running around. If they aren't predictable in their travels it is unlikely many would know who they are in the first place and unlikely someone would be set up to be a threat but I agree it is the smaller problem.

28 November 2008
at 11:27 a.m.

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jonas_opines (Anonymous) says…

Hmmm… no “omg yuz gots teh class envy!” posts coming out yet?
28 November 2008
at 12:59 p.m.

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gl0ck0wn3r (Anonymous) says…

Class war!!!11!!!
28 November 2008
at 4:52 p.m.

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Lynn731 (Anonymous) says…

Right on !!!!!!!!! Thank you, Lynn