The plan to reign on executive compensation looms further
Bank of America’s spokesman, Scott Silvestri, recently commented that competitors not subject to pay restrictions already “… are exploiting this situation by identifying our top performers and using pay concerns to recruit them away for fair market compensation.”
He’s talking about the government’s gradual regulation over executive compensation with the leadership of pay czar Kenneth Feinberg. If you’ve been following this blog, we’ve featured several posts about this controversial issue. And until now, we’ve not been swayed by any defense that these rich folks are protesting. It’s time for the government to get in the scene.
But everything that those affected are saying is just plain silly to us. Even Feinberg has reviewed their concerns and has made a solution: “… Feinberg did say exceptions were made “where necessary to retain talent and protect taxpayer interests.” Base salaries above $1 million were approved for the new CEO of AIG, and for two employees of Chrysler Financial. Under a package approved by Feinberg over the summer, AIG CEO Robert Benmosche will get a pay package of about $10.5 million.”
Still, BofA and the rest of the banks are fearing an impending brain drain among top managers. Other private companies and most likely foreign enterprises who can offer higher pays to attract these people will surely raise their demand. But haven’t they thought of the following?
We’d get rid of the same people who started the real estate slump.
We’d lose executives who offered hybrid loans to most unsuspecting and uninformed borrowers.
We’d dismiss any chance of having mortgage officers goad clients into loans that they won’t qualify but still have the possibility to avail.
So would the public trade this for the feared brain drain among executives? Hasn’t it occurred that no matter how they regard themselves as the best among the crop of managers, they can still be replaced by top tier talents in the workforce who can practice business ethics? That’s unless BofA and the rest, still prefer to defy mortgage standards.
Even Warren Buffet agrees when he recently said, “I don’t look at Wall Street as ‘evil’. “I look at Wall Street as given to huge excess sometimes. I don’t want to get rid of it. We need something to allocate capital and distribute securities and all of that throughout the system. We have got a big capitalist system and we have to have a big capital market—but there is plenty of room for improvement.”