Goes to show you, some things never change. When the “too big to fail” institutions decide to gamble with stockholder and consumer money in hopes of hitting it big, they can end up losing it all. JP Morgan’s insurance bets just lost that company $2 billion. JP Morgan’s CEO just received a $23 million paycheck voted by shareholders. And the 99%’ers are left scratching their heads saying, “what’s wrong with this picture?”.
I’m not against huge pay for those at the top… but my definition of “huge” is obviously different from that of the 1%’ers. Based on a 60hr work week, 52 weeks/yr… that is just over $7,000/hr… or $120 per minute. I know those that support these massive pay scales say it is not an hourly rate as much as a performance pay — if they are making the company money, they should be compensated. Just like an actor that gets $5 Million for one movie. If that actor has the ability to draw a larger audience, he/she deserves the money. So the question is — is the CEO the star that is bringing in the big bucks? and if so, how much does he deserve to get for his efforts?
When you have a publicly traded business, such as JP Morgan, should the CEO (and other top tier execs) receive exorbitant amounts of pay and bonuses with less trickle-down to rank and file? and less payback (dividend) to shareholders? How much is too much? A private business is a different story. The owner of the private business has to absorb any losses and stands to lose everything so on the flip side, if he/she is running the business well, should be rewarded accordingly. However, there still should be an equitable trickle-down to rank and file for their help in creating profits for the company. A bonus structure works well to protect the owner during down times. It is easier to give smaller or no bonus than to cut the pay of workers.
Back to JP Morgan Chase. Read this article for an understandable description of how they lost $2 Billion. Suffice it to say, they gambled and they lost. The troubling thing about this is it is reminiscent of the 2007-2008 fiasco. Lessons never learned. The excuse given is “we did nothing illegal.” Every time something like this happens in the financial industry (and others) the excuse is always, “we did nothing illegal.” Which leads me to believe they will continue making stupid, risky, decisions with other people’s money as long as it is “legal”. I dislike regulations and rules and government interference as much as the next guy… but because of this attitude, Wall Street and the Financial Sector are forcing us (the government) to make regulations to protect consumers and also the collateral damage which would occur in the event of a business meltdown and closure.
The 1% (Wall Street, et al) better get their acts together and not look at what they are doing as if it is “legal” or not, but is it “prudent” or “ethical” or not. They have a responsibility to the public and to their shareholders to “do the right thing” not just the “legal” thing.
And… $23 Million dollar pay package – $7,000/hr — $122/minute — $2/per second is not a necessary sum to attract smart resourceful executives. You don’t allow your company to lose $2 BILLION and not take some responsibility. If you are really worth $23 Million ($2 for every second that ticks by) you better be superman and take responsibility for ALL aspects of your company. That is why you are paid the big bucks.