May 20, 2011
Compensation should have some relationship to performance, and performance should be evaluated by more than an increase in share prices. There should be a number of criteria, including working conditions for employees and environmental impact, that should be included in the evaluation. CEO's need to be able to defend good behavior and decision making by being able to point to a system of laws and evaluation criteria that justify good decisions. Currently, any CEO who does not jump on the bandwagon of short term profit and high stock prices will be fired and replaced by someone who will.
Wall Street greed and outrageous pay practices were a major cause of the collapse. One way to change the incentives so they don’t collapse our economy again would be to delay the bonuses for three, five or more years. That way, we’ll know if the loans they made in year one remain good. In the bad days, bankers paid themselves on the volume of loans (mortgages) they generated, not on their quality.
Thank you for considering my comment,
Sara Coulter