
U.S. Orders Deep Pay Cuts at Companies Who Received Bail-Out Funds - Flemlord
http://www.cnbc.com/id/33417281
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grellas
We all get a great sense of schadenfreude when formerly profligate
corporations get their comeuppance in this way but the pay czar role (whether
in the form of an individual or a political committee) is in reality fraught
with problems for taxpayers.

If the government is to be anything than a long-term host for parasitical
companies, the idea is to have the companies turn around. Yet who worth his
salt will remain at such companies if the compensation needed to keep them
competitive with otherwise similarly situated companies is not there - or,
worse, was there but was cut by a "pay czar' for who knows what reasons
(especially bad if people have their pay cut in order to appease popular
prejudices)?

Yet what "pay czar" worth his salt will _not_ want to scrutinize all salaries
closely for companies that have been feasting at the public trough? Of course,
that is his job and he must do it to be responsible.

Sometimes such cuts will be more than warranted; other times, they will be
arbitrary. There really is no good measure for determining which is which.
Hence, it can all become political or not and only the bureaucrats and
politicians will ever know - of course, those directly affected will also know
and they will not likely stick around for more if they are indeed working hard
only to have political factors wind up hurting them economically with no
recourse but to have to suck it up.

And so the whole system is calculated to do anything _but_ help the companies
turn around, at least as this might happen through having competitively paid
and motivated individuals in positions of ultimate responsibility.

I do not say this out of sympathy for the corporations. Most of them richly
deserve all that they are getting right now. But the poor taxpayer is not
well-served either, as a losing approach goes from bad to worse in all
likelihood, with the taxpayer perpetually on the hook for more.

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jibiki
This is hardly the first time the US government has bailed out private
corporations. Was compensation a major issue when we bailed out the railroads?

