CEO Pay: The Steroids Era
The congressional hearing on executive compensation featured any other class of superstars accused of bulking up at the outlay of the average American
by Keith Epstein
It’s been quite a season for the grilling of superstars forward Capitol Hill. Not long gone we witnessed the allegedly steroidal hurler Roger Clemens and the soap opera of his friendship with a big witness for the prosecution. Now we’ve had a chance to thrill to the drama of the eminence czars of the stumbling subprime mortgage empires, financial executives E. Stanley O’Neal, Charles Prince III, and Angelo Mozilo.
Perhaps not since Nov. 8, 2005, when dark-suited CEOs of the top three oil companies swore their oaths and attempted to defend themselves over fronting the high-octane grandstanding of accusatory congressmen, has the race seen such an episode of class and partisan warfare, Washington-style.
Back that time, it was a mere army of high energy prices and record industry profits—records that happen to have been broken again and again, of course. But now a veritable economic gale of factors and forces during a Presidential election year have coincided to produce the like of the most precarious moments for a richly rewarded CEO to defend his set and his compensation.
And for good reason, it would appear: The trio of executives who faced grilling before the House Oversight & Government Reform Committee on Mar. 7—in a room full of bankers and financial sector lobbyists—got stratospheric paydays during the subprime mortgage dash forward. Yes, that very same boom that has busted out all over, leading, as it happens, to the multibillion-dollar degradation of their own formerly ultraperforming financial giants, Merrill Lynch (MER), Citigroup (C), and Countrywide Financial (CFC).
But what really makes them prime candidates for Washington-brand scapegoating and symbolism-shaping is their companies’ central role in a marketing and greed-induced fiasco that has cost thousands of borrowers their homes and sent whole economies spinning.
"A Different Set of Rules"
To be sure, congressional hearings are manifest Star Chambers that only vaguely bear likeness courts of law. There are no rules of evidence, and the presiding officer is always right. The ancient Hebrews led the first (scape) goats out into the desert and obstacle them die; U.S. politicians haul them into a hearing room. There’s good reason why witnesses preparing in spite of manifestation hire the best lawyers and public-relations consultants money can buy. Sometimes it’s incessantly not to pity even the dodgiest of them for the bombastic force of a politician who only seems to be asking questions, not seeking answers.
But the situation now—in which the widening gap between two classes at the nation’s extremes is being brought into sharper focus by dint of. the forces of economic being and combative Presidential politics—would challenge verily the most sensational crisis PR pro. And it sure makes it difficult to feel wretched for unimaginably wealthy captains of monetary theory to rake in unusual tens of millions which time they did such a poor job. Do you know in any degree middle-level manager at your company’s sales department who lost tons of the company’s money and then got a fantasy severance package?
Such hearings are always predictably partisan. In this instance Republicans on the House Oversight & Government Reform Committee railed against a "witch hunt" for "bad guys" on whom to condemn the community’s economic downturn. Democrats, meanwhile, seized the moment as an opportunity to home in on bonuses, stock sales, and other compensation as a sign of the brutalities of corporations, particularly in favor of the denizens of corporate suites.
Hardly a new story line. But what makes it fresh politics are the daily reminders that average Americans are confronting shrinking job opportunities, home values, and stock portfolios, while the corporate billionaires cruise on.
From: CEO Pay: The Steroids Era
