by Elizabeth M Young

Created on: January 04, 2010

Excessive executive pay has been on the minds of many working Americans for decades, ever since the multi-million annual contracts, filled with stock bonuses, excessive perks and what amounts to corruption ofthe corporate charters became out of line during the 1980s.  Putting salt in the wound was the incompetence of the overpaid and overcompensated executives in keeping the corporations in good financial and other shape. The trail of business failures and financial disasters that some executives left behind as they moved from corporation to corporation was infuriating to many.

In the latest scandal involving AIG, and long before, concerning executive bonuses, it is clear that these bonuses were contracted for just before the TARP funds were given to them. Looking at the individuals who were hired and who were given those contracts, it was clear that the individuals were essentially extorting these contracts by threatening to work for competing energy firms, as energy investment was a huge part of AIG's money grab in the first decade of the 2000s.  Now, fortunately, the administration's pay overseer is ensuring that these excessive bonuses are neither offered nor contracted for as part of the extortion going on in firms that have still not repaid TARP monies.

But how would it be possible to make such restrictions apply to other private corporations? By implementing tests to see if taxpayer funds, government contracts, or our essential utilities and economic infrastructures are involved. If so, then caps on executive pay so that it is not in excess of 200 times the lowest salary would be in order. There is definitely no way that taxpayer funds, our electric, sewer, garbage, prison, and gas bills, or our schools, military and institutions, and roads, for example, should be subjected to victimization through rising costs that stem from such executive greed, revolving doors, logrolling, cronyism and extortion, especially when the executives are not even that competent!

If the boards of private companies want to change their corporate charters to divert funds to themselves and to their cronies; and to drive the businesses into the ground by diverting essential funds to a useless and greedy CEO pay and compensation circuit, then they will simply be extincted businesses that failed to exercise the capability to stay in business. Someone else will come along to provide the service, with probably better results.

But when our national debt, our government mandated and required utilities and infrastructures, and the collapse of our economy is at stake, then the government has every right to reign in excessive executive compensation and to even take the firms into receivership until the leadership comes to their senses.

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