The House has approved a measure limiting executive salaries. According to an article in the New York Times, the measure will apply to any firm with more than $1 Billion in assets. The bill would allow stockholders to vote on salaries, and would attempt to reduce the conflict of interest, regarding consultants who approve these salaries.
As this comes in the wake of news that nine financial institutions that received federal bailout money gave sizable if not exorbitant bonuses to executives, which was tantamount to paying bonuses with taxpayers’ money. Some will view the approved measure, that still has to be approved by the senate, as at least some form of justice. Some will think it is too little too late, a closing of the barn door after the horses are out of the barn.
Others, in turn, will view it as more government meddling in private enterprise. They will see it as the questionable if not unlawful imposition of salary limits, vitiating the spirit and actual definition of capitalism. For my money, which has not been one of the multi-million dollar Wall Street bonuses, you can take your choice. My one insert would be that people shouldn’t be rewarded for running a business into the ground. To say the least, this would establish a really bad precedent.
But who am I to voice perceptions of our financial system? Having witnessed the agility and dexterity of our financial leaders, government officials, and regulating bodies over the past several years, my sense of a viable economy pales in comparison to their majestic capabilities and knack for success. I know when such luminaries stumble around the talk shows, choking on answers to questions for which they have no true response, it is merely code and not any lack of control. For financial and political pundits, stuttering is fashionable.
No matter. Be it the closing of the barn door theory or government doing its worst, if you need to hire people in the financial sector, best to make sure they are capable and not just more dead wood, piling on to a losing proposition. Run your background checks and conduct especially federal criminal records searches and federal civil background searches.
Remember, with all the stock fraud, Ponzi schemes and SEC violations, a little due diligence will help avoid public embarrassment and potential liability. Besides, it’s great to pay someone a fair wage. For services perform. And to bonus that employee when the services performed are exceptional. Exceptional. As in better than mediocre. And a whole lot better than rewarding him for running your company into the ground. Like hurricanes, forest fires and other disasters, with the next economic meltdown, the government may not be so quick to respond.
Check them out before you hire.
