I’m a little confused. Is this going to be Pay Tyrant or Pay Kitten?
The news broken yesterday by Stephen Labaton in the New York Times that Kenneth Feinberg is planning on slashing salaries by 90 percent and cutting total pay by 50 percent sounds like a Pay Tyrant.
But what about the package for Robert Benmosche at AIG? Wasn’t that tentatively approved?
Is it going to be:
“Err, just a mo, Ken, this package for Bob, $7 million in salary, but some of it’s in stock. That’s OK, isn’t it? Just sign the chitty there, mate….”
“Seems alright to me. There you go.” Scribble, scribble.
Or is it going to be:
“Yo, Benmosche, this $7 million? Forget it. I’m crossing one of the zeros out. Think $700,000.”
So you see why I’m confused.
And I’m still confused even though I was up at 5 am today to discuss this on Takeaway, PRI, BBC, NYT, that sort of thing. There was me, Stephen Labaton, and Steve Kaplan, currently debating our glorious leader(Nell Minow if you really need to be told) on the merits or demerits of executive pay. We were on at 6am, which is a little early for me, but still, some of the pain was mitigated by the fact that Mr. Kaplan, being in Chicago, had to get up an hour earlier than I did. You know these radio programmes, they tell you they’ll call you at 5.45 “just to make sure this telephone line is OK” they say when what they really mean is “just to make sure you’re out of bed you lazy sod”.
But it wasn’t until I got back into bed afterwards to catch up with forty winks that I started to think about something that Steve Kaplan had said. One of the limitations that Mr. Feinberg is proposing is that employees at AIG Financial Products (the division that singlehandedly brought down the entire insurance company) will only be able to earn a maximum of $200,000. “For that,” Steve said, “you’ll just get bureaucrats.”
Now first of all, what’s wrong with bureaucrats? When I was at university only the brightest and the best even got the chance to sit the Civil Service exam. But if I were the CEO of AIG, I’d be thinking: “Bureaucrats, that’s a stroke of genius. They wouldn’t have lost all that money. I wish I’d thought of that before. I mean, after all if you have to countersign everything in triplicate sooner or later somebody would have looked at more than just the last page where you have to sign and said: ‘These credit default swaps, I’m not sure this is such a brilliant idea…’. And records, bureaucrats keep records, we have no records at AIGFP, that’s why we had to pay those bloody retention bonuses because if they all left no one would have known what was going on. Bureaucrats. Brilliant.”
Oh, and while we’re on the subject, pulleez, someone limit my pay to $200,000.
