Why is it even a question as to what to do about past CEO and Executive compensation at the financials that are now receiving TARP money?
Most of US get paid based on performance. Unlike these congressmen and women who want to rewrite history, I don't have ANY problem on giving people performance bonuses. In fact, for anyone to suggest that they should merely get salaries, they are clueless about what it takes to run a good company, attract top talent and give people incentive to do even better. That's a big part of capitalism, and frankly if I was in charge I'd say EVERYONE should be paid based on performance. That would negate all the waste and incentivize people to work even harder because they know there is upside. If the upside is only for shareholders, or the owner of the business, most people aren't going to work nearly as hard as if they have a stake in the company thriving.
It's amazing listening to these hearings that some of these politicians want to get rid of bonuses. HELLO! THe problem isn't and never was the bonuses! In fact, I would argue the problem is the SALARIES. Get rid of salaries and make pay based on performance, trust me, you'll get a lot more productivity. It's a win win that way.
I understand the public is outraged that the average Joe or Joess doesn't make, nor can they comprehend, someone making $20 MIL a year or more, but that's because they dont have enough information. Or, they have been let down based on the lies and attitudes and criminal acts or whatever.
So, what is the issue? The issue is that these guys were paid BILLIONS based on FICTION profits! They were paid $10s of millions each year in bonus based on bogus profits. Many I am sure knew it. So, how is it right that these guys get to keep their bonuses, when the profits were clearly never real? If we assume it's ok for them to make performance bonuses/pay base, then why wouldn't they be penalized for making too much money/bonuses and giving it back now that the taxpayer, who largely make at best a fraction of the money these clowns did and do.
#1 culprit? Henry Paulson, just resigned Secretary of the Treasury. THe guy made BILLIONS based on PHONEY #s, why would he be allowed to keep it? If I was a shareholder, I would sue the crap out of these guys to make them pay!
BUt, of course, I'm barkng up the wrong tree, this is the same system where GS is trading near $100 based on probably nothing more than the belief that since seemingly all decision makers in Government economic policy makers have been, or are, or do or did, work for GOLDMAN SACHS! And, yeah, I stick to my $10 target on GS ultimately still!
It is outrageous and offensive that these huge issues go undiscussed and certainly seemingly unpunished. I don't know, but if Barry Bonds (and I'm by no means a Barry Bond fan!) may go to jail based on allegedly lying to a grand jury, what's worse, that, or CEOs who knew the end was near who then go out and give away billions in bonus money?
It's disgusting, the banks need to be nationalized NOW! Anything less and they are just setting up another repeat of this now and/or in the future!
I'm on vacation in the Bahamas, I'll be back end of next week. I have NO idea what market will do, I didn't watch it at all today other than close some winners out.
Enjjoy your time off from me, I'll try to post blogs when I can, but no market calls when I'm away on vacation here.
RULE and don't let the bed bugs bite!