I've been trying to follow the whole story this week about executive compensation in the financial sector. I'm having difficulty comprehending the mindset. Perhaps if I try to reason it all out, it will eventually make sense.
Ok, let's say that I head a large multi-billion dollar bank. To do this, I've gotten a degree or two, worked in the trenches, networked like crazy, and gradually climbed up what Disraeli called "the greasy pole". Theoretically, I know a thing or two about high finance, show generally good judgment, have a well-developed bullshit detector, know enough to gather good people around me, and challenge them to provide me with honest answers. If I am successful at all of this, I deserve to make a lot of money -- and we'll leave what "a lot" means as fuzzy -- because my good leadership skills cultivate enthusiasm and loyalty throughout the organization, bring profit to the shareholders, and steer the bank away from unnecessary risk.
Sadly, this does not seem to be what being a bank president means. Being a bank president seems to involve climbing to the top of the "greasy pole" in part by having the gall to ask for a pay package bigger than what anyone else has asked for yet, hiring mercenary underlings who will only work for me if I offer them a base salary that is several times the median wage with guaranteed bonuses at three to five hundred percent of their base pay, and believing in the old mafia theory of betting: "I win, I collect; you win, I don't pay."
Why? Because only certain special people can do this job. People who can make the big decisions. People who are born to command. People who can still ask for big bonuses when they wreck the economy -- because that's all someone else's fault and they're playing great defense by keeping losses low... uh... low-ish... uh... less than the GDPs of most of the world's nations... uh... combined.
Nope, I'm still not getting it. Didn't some French people get together on a tennis court and decide to get rid of a bunch of people who thought that way?
on 2009-02-04 at 12:58 p.m.
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