"Are limits on executive compensation for banks that accept federal funds just the first wave in a future sea of pay measures?"
Beyond the Bailout - CFO Magazine - December 2008 Issue - CFO.com:
Great to see CFO Magazine address exec pay in post-bailout terms. My own "excessive executive pay" theory is that lack of social welfare is a major driver. That's right, corporate executives know just how much money it takes to protect oneself and one's family from all eventualities in the world today. CEOs feel that amassing huge amounts of money is the only way to make sure they and their loved ones don't end up in the gutter.
As our country proceeds to plow billions of corporate welfare dollars into companies whose demise was caused by CEOs and other executives pursuing paycheck maximization at all costs, it behooves us to ponder where all this comes from, what's the driver?
Ironically, the driver is, IMHO, the lack of social welfare in the U.S. For too many Americans their country's social safety net is a nightmare scenario. What awaits the average working American who loses job, house, health, savings? It's a jobless, homeless, life-threatening, shaming and demoralizingly hopeless mess.
How much money do you need to steer clear of this, to rule it out of future? A million dollars? Two million dollars? Noooo. You need way more than that. Tens of millions more. The reality is, and this reality has recently been underlined, you just "need" one real estate market reversal and/or stock market correction and you can kiss your millions goodbye.
And when your net worth drops below seven figures you are one diagnosis, one car crash, away from bankruptcy. With the "right" combination of circumstances your future can quickly shift to one of coupon-clipping, paycheck-to-paycheck, rent's due, viewless living, with zero vacations and a daily grind that extends all the way into old age.
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