Dear Mr. President:
Thank you for dealing with the unconscionable greed and irresponsibility of our nation’s investment banks. Thank you also for confronting those individuals who have abused the public’s trust and the law.
However, there is one group of individuals who had a large hand in the mess we find at such firms as Merrill Lynch and AIG, yet have largely escaped governmental or public scrutiny. They are executive compensation consultants, the individuals who devised the contracts and bonuses that stimulated and rewarded the bad business behavior you are now trying to correct.
There are, of course, many upstanding executive compensation consultants, but too many in this field are not. Even as I write this post, these “loophole mavens” are looking for ways to skirt the intent if not the letter of the economic recovery and reinvestment law and, in the process, pad their clients’ pockets and their own. They are as abusive of appropriate business behavior as the brokers at UBS who showed wealthy clients how to skirt the IRS and hide income overseas.
Worse than that, such executive compensation consultants are the high priests of individual depravity and selfishness. They taught a whole generation of corporate leaders that the key to success is the shortest possible path to personal aggrandizement.
As in the situation at AIG, they arranged contracts that rewarded individual performance even if that performance actually undermined their fiduciary responsibility to their employer. On Wall Street, they set up compensation “systems” that operated without regard to an organization’s success (or lack of it). To put it bluntly, the executive compensation consulting field played a central role in creating the current recession. No less important, it has the capacity to derail much of what you plan to do to achieve a viable and sustainable recovery.
For both of those reasons, I urge you to find a way to control if not regulate the counsel dispensed by executive compensation consultants and the contracts and “systems” they devise for their clients. The best in this field will find such oversight inconsequential; the rest deserve it.
Thanks for reading,
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