Ridiculous bonuses justify say-on-pay for shareholders

While America’s families continue to be battered by unemployment, foreclosures and other pains associated with the worst recession in decades, Wall Street executives are raking in the big bucks again.

Goldman Sachs is preparing to hand out $6.65 billion in salary and bonuses for the second quarter after getting funds from the taxpayer through the Troubled Assets Relief Program. JPMorgan put aside $14 billion to pay top executives and traders. That’s just ridiculous. And since excessive executive compensation has flourished even when businesses are failing, shareholders need a say-on-pay.

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President Barack Obama earlier this year decried the “culture of narrow self-interest and short-term gain at the expense of everything else” that has fostered corporate irresponsibility. CEOs like Martin J. Sullivan, who ran American International Group (AIG), the giant insurance and financial services firm, into the ground, illustrate the problem in our boardrooms. He was fired, but walked away with a severance package estimated at $47 million.

He wasn’t alone. While the economy was thrown into turmoil and people across the nation lost their life savings, AIG executives continued to receive hefty bonuses. We’ve all taken a hit thanks to AIG’s greedy manipulation of exotic investment products. The perverse system of excessive pay, even for failure, created incentives for foolish risk-taking by major financial institutions.

For years, AFSCME has worked to rein in the excessive paychecks unrelated to long-term performance that unaccountable corporate boards of directors have given many of America’s CEOs. We’ve argued that boards cheat shareholders and workers when they cloak their operations in secrecy or are unaccountable to shareholders.

Responsibility for the worst economic collapse since the Great Depression can be laid at the feet of those CEOs who put short-term profits ahead of long-term and sustainable wealth creation. And that threatens the interests of shareholders, including working families whose savings are invested in the market. America’s shareholders need sound management, accountability and the right to nominate members of the boards of the corporations in which they invest.

That’s why AFSCME supports House Financial Services Committee Chairman Barney Frank’s (D-Mass.) say-on-pay legislation. That bill, which passed the Financial Services panel Tuesday, would give shareholders an advisory vote on compensation packages and on “golden parachutes,” and would make compensation committees more independent from management. This legislation is an important part of the broad financial reform effort necessary to re-regulate the financial industry and protect shareholders.

A key step to fixing our economy is making sure that the interests of shareholders and stakeholders are considered in corporate board rooms. We believe that Rep. Frank’s proposal to give shareholders a say-on-pay will help hold corporations and their leadership responsible and accountable to their owners — company stockholders. It’s time to stop rewarding corporate executives for failure. It’s time to make American companies transparent and accountable. We need bold action to bring these rampant abuses to an end.

From Gerald W. McEntee, president, American Federation of State, County and Municipal Employees, Washington

The AFSCME employee pension plans own stock in Goldman Sachs, JPMorgan and AIG.

Healthcare lies, not for attribution

In the article “Dems warn Baucus with gavel threat” (July 30), Alex Bolton writes:

A Senate source argued that critics do not have a realistic view of what it takes to enact an overhaul of the nation’s healthcare system.

“Those members who want everything they’ve ever dreamed of and want it now don’t have a plan — or the votes — to get it,” said the source. “This bipartisan Finance group isn’t focusing on politics or partisanship; it’s focused on results — delivering real healthcare reform, the president’s top priority this year.”

First, this source is not identified and his or her comments go unchallenged. Further, what that person says does not justify anonymity. It is simply an opinion.

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Second, the comment is dead wrong. We all know that two-thirds to three-fourths of the American people want single-payer healthcare, yet Baucus, the Republicans, and the Blue Dogs wouldn’t even allow single-payer on the table! We now have a severely weakened public option, or worse, co-ops. What we’ve dreamed about for 60 years was negotiated away before the game even started.

In addition, the source’s words, “This bipartisan Finance group isn’t focusing on politics …” are a total lie. The “Gang of Six” represents less than 3 percent of America and is heavily funded by health insurance companies and PhRMA. They could give a crap about what the people want. Their motivation is obvious.

From Scott Henderson, Los Angeles