Friday, July 18, 2008

U.S. Downturn Boosts Shareholder Activism

U.S. Downturn Boosts Shareholder Activism

Like I said in an earlier post, it makes sense to link at least a portion of an executive's compensation to performance. But why don't we apply this notion to all jobs of importance. For instance, we should consider linking performance measures to compensation for members of Congress. It wouldn't be that complicated. For starts, we could require that they actually show up to 90% of voting opportunities that arise, instead of actually showing up about a third of the time. Or instead of giving them a lovely $160k + annual salary, how about we give them a base salary of whatever the average "working class" employee earns, with the remaining compensation dependent on individual and national performance measures (and no, getting sweetheart deals from Countrywide shouldn't be part of their compensation packages). And how about in addition to a "say on pay" we get to propose other taxpayer initiatives that are binding on Congress. It seems like I am a shareholder of one of the biggest entities in the world, the U.S. government. And if members of this government want to spend all their time reforming compensation for various members of society, shouldn't we apply the same standards to members of government? The last I checked politicians are supposed to "serve" the country, the country is not supposed to serve the government. So, to Mr. Waxman and other members of Congress out there who so proudly vilify the business world and push for executive compensation legislation, a lot of us think you are all hypocrites! When you start holding yourself accountable for results, then maybe we will listen.

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