Ward on Words

Facebook is interesting because you communicate with friends from all phases of your life. And if you're on Facebook, you know that certain topics and videos get shared by a variety of people from very different backgrounds. Here's the political chit chat that's trending today with my Facebook friends: A unionized public employee, a teabagger, and a CEO are sitting at a table. In the middle of the table is a plate with a dozen cookies on it. The CEO reaches across and takes 11 cookies, looks at the teabagger and says, 'Watch out for that union guy. He wants a piece of your cookie." Not sure of the source of that joke, but to me, it's a sign that the out-of-balance compensation program we've got going on in America is beginning to simmer on the burner of public opinion. Hope we're not that frog, continuing to sit in increasingly hotter water until we boil to death.

"Despite the vast outpouring of commentary and outrage over the financial crisis, one of its most fundamental causes has received surprisingly little attention. I refer to the perverse incentives built into the compensation plans of many financial firms, incentives that encourage excessive risk-taking with OPM -- Other People's Money." That's how Alan Blinder's article in today's Wall Street Journal opens - by calling the Wall Street method of compensating its employees "perverse." Is the world coming to an end? Am I dreaming? A smack-down of Wall Street salaries in the WSJ seems too good to be true. Not clear if we are nearing Armageddon, but I'm definitely not dreaming. The WSJ is running an article attacking the compensation plans of the financial community. Now THIS is change we need! And Blinder isn't just talking about the highly publicized federally-funded bonuses granted to AIG and Merrill Lynch. He's talking about how...

Royal Dutch Shell shareholders are not happy. Here's what NY Times Dealbook blog is reporting: "Shareholders, angered by lofty executive pay in a time of dwindling earnings, turned their wrath on Royal Dutch Shell on Tuesday, voting against compensation packages for senior management, The New York Times’s Julia Werdigier reports from London." The vote is not binding. But it represents a significant change in the usual rubber stamp shareholders have given in the past to these compensation packages. Perhaps the rabble is coming around to understand that the investment in executives has shown poor returns in recent months. And perhaps the executives will take note of the rabble's rage. But knowing how dear and how beloved the compensation packages are to top execs, I'll bet they get what they want, rabble be damned. Some links below if you want to read more... NY Times dealbook blog post Shell's investor center My 6, 2009 letter from Sir P...

According to a story in yesterday's NY Times, those who work at Wall Street firms "are on track to earn as much money this year as they did before the financial crisis began, because of the strong start of the year for bank profits." I have to wonder - where is this money coming from? Aren't these firms clogged up with toxic assets? Didn't the negative balances on the books of these companies drag down the country's economy? So why aren't profits for this quarter being used to recapitalize after the losses of last year? Have we reached a point in American capitalism that only the taxpayer responsible for the losses on the books of the Wall Street firms?

Not long ago, I wrangled a bunch of parents to volunteer for the school's annual carnival. A lot of work, but it's a volunteer position that gives me the chance to talk with people I'd otherwise never get to meet. One of the moms who helped out is a flight attendant at American Airlines. During some down time at the carnival, she shared her frustration about the great divide between executive compensation and the pay scale for the rest of the people who work for American. She had no problem with executives earning significantly more than other employees - her problem was that the executives who negotiated hard for union concessions in a number of areas - including compensation - then turned around and paid themselves an enormous bonus. The flight attendant was outraged that leaders who asked for shared sacrifice apparently felt entitled to remove themselves from the opportunity to sacrifice with the rest of the company. According to this story in the Washington P...