Wednesday, January 20, 2010
Bankers: Winners & Losers
Good News! The UNITED airlines has found my bag. They sent it to Vegas. Now they are sending it back to me via FedEX. I hope my green bag had a good time in Vegas and perhaps maybe even won some money.
As for talking about money and banking today, I am going to hold off for another day or two, as I am still getting back to my routine.
There is, it seems, more discussion of executive pay and its relationship to that of the lower paid employees of corporations and how the ratios have changed over time. The most disturbing fact is that even when management performs badly, the big salaries and bonuses just keep on coming. There has been a great deal written on corporate governance and now it is time to write more on corporate performance and how corporate compensation is tied to performance. The banks take risks and if the risks work out well and the bank makes money, all is fine. But, what happens when they take too much risk and things do not work out fine? Should senior management get to keep money earned for short term gains that put the bank in danger of longer term failure?