How much should someone be paid to bankrupt a company? A shopper’s guide

“It’s in the best interests of taxpayers to have Jamie Dimon running J.P. Morgan. They should want to have the best people out there running these banks, and I’m not sure capping pay is the way to do that.” – Jeffrey Immelt, CEO of GE, on President Barack Obama’s proposal to cap pay for executives.

Hard to know what the CEO of a company that has lost 2/3rds of its share value in 12 months means by “best people.” Certainly Dimon looks good in comparison to Immelt. JPMorgan is down slightly less than half over the same period. Still I think it is in the taxpayers best interest to pay as little as possible for incompetence of this magnitude. George Bush, after all, was paid a mere $200,000 a year.

pay-chart

Compensation numbers can be found here.

During the pet-food-poisoning scandal it was revealed the only difference between many top-shelf brands and their down-market competitors was the labels. I believe the same principle can be applied here.

How about this for a sign: “Will wreck your business for food.”

4 thoughts on “How much should someone be paid to bankrupt a company? A shopper’s guide

  1. Jeffrey Immelt has an excellent point.

    With the exception of Lehman Brothers and Merrill Lynch, the guys that got paid 8 figure salaries managed to keep the companies afloat. The rest are bankrupt.

    But Obama should rather link the salaries to share prices. If the CEO loses 50% of the share value of the company, he or she has to pay back 50% of their salary.

    Works both ways, of course, but at least they won’t go around making as many recklessly stupid financial decisions with other people’s money.

  2. I disagree with your point, of course, but I respect it and enjoyed reading it. Please keep comments like this to yourself from now on. We try to avoid rational discussions on this blog. Half-assed uninformed opinion will be expected from you in the future. Don’t say I didn’t warn you.

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