The last time I spoke about executive compensation was after the AIG bonus fiasco. The CNN interview was just about the worst experience I’ve ever had in front of the camera. I wasn’t defending bonuses, but trying to explain the history of the bonus structure on Wall Street.
The whole thing was a fiasco — after the appearance, I wrote a blog post called “We Owe You More,” but the editors at CNN posted it without my knowledge or permission with the title “In Defense of AIG Bonuses.” Nice touch — it only took three days to clear out the hate mail.
Well here we are again — round two or sixteen on the compensation discussion. The White House is set to appoint a “Pay Czar” who will make sure that TARP recipients don’t make too much money. This will make those banks who are readying to repay funds even more eager to get going and free themselves from the government’s pay guidelines, which is deserved because they have cleaned up their messes.
The rest are going to have to just deal with the restrictions because they’re in no position to argue. They made bad business decisions that got them the trouble; then got into bed with a loan shark called Uncle Sam, and now he gets to call the shots. Until the TARP CEOs can prove that they know how to manage their companies without Uncle’s money, they’ll just have to suck it up and bow to the Pay Czar when he visits.
