compensation - some thoughts

The NY Times this morning ran an article (cited above in the title link) that goes to executive compensation review at the bailed out auto companies. There is a minor uproar generally about compensation paid to execs in failing companies or in those who take bailout money by the by.

Frankly anyone who puts a 4 ton SUV on the road that gets 15 mpg and blocks the view of us mere mortals with lesser vehicles deserves very little compensation...its the why reward stupidity thing. Not fair. Not reasonable. Purely sentimental but that's what it is.

On the far side of the moon there was another huge issue raised when a fellow fom Citi received his bonus in the order of 80 million + dollars. Who is worth $80M? He made Citi something like $700 in pure profit so he really isn't hourly wage material but $80M??? C'mon!

I got into a minor debate about this with someone here. I was wrong. His view is correct. The fellow would have received nearly nothing in compensation if he lost Citi money so his compensation is performanced based. Ok. That makes sense, but again - $80M (I'm not sure if my numbers are close or exact but the principle is what I'm after here).

This guy is something of an independent contractor or running his business and he is making about a 15% return. No small business can survive on 15%. None that I know of anyway.

Executive compensation or compensation on any level isn't always what it is cranked up to be or as it is portrayed. I was wrong.

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