It's completely ridiculous that the new American "pay czar" has been able to deny former Bank of America chief Ken Lewis part of his pay package.
The Treasury Department's pay czar pushed outgoing Bank of America Corp. Chief Executive Kenneth D. Lewis into giving back about $1 million he received so far this year and forgoing the rest of his $1.5 million salary for 2009, say people familiar with the matter.
The move makes Mr. Lewis the biggest target so far of Kenneth Feinberg, the Treasury's "special master" for compensation. He also asked that Mr. Lewis pass up any 2009 bonus from the Charlotte, N.C., bank.
Mr. Lewis is still walking away with a lot of money, almost $70m I believe, which shows that this Czar action was merely symbolic. Kenneth Feinberg (the Czar) is now investigating almost 200 highly paid employees who unfortunately happen to fall under his authoritarian control. This sends a horrible message. Essentially, it says that if you are highly ambitious in your career, don't join any bank associated with the U.S. goverment. Join another bank that will pay you as much as you can command.
When people freak out over high salaries for bankers, CEOs, etc. they forget one very important reason why these people need to make a lot of money- they always have the choice of A) retiring (they're likely already wealthy) and not having to put up with the stress and BS high powered positions carry or B) start their own company and earn substantial amounts of money as an owner. CEOs can walk away and build companies while bankers can walk away and create financial boutiques. They thus need to be paid enough so that they are convinced to remain in demanding jobs rather than follow their dreams and spend their time with family. The way things are going now in the U.S., many highly capable people might just call it quits and live the good life. Think about Mr. Lewis's 2009: he had his reputation destroyed, became hated by the masses, and now didn't even get paid for the year. For anyone at the top of their game, being the next leader of Bank of America looks like a giant trap best avoided.
Well indeed
"It doesn't matter what you think someone deserves as pay, if they can't get what they think will make a job worth their while, they just won't show up."
But in Ken Lewis's case that would have been a good thing. Just about everyone would be better off except him. Just because he wants a lot of money, and has a lot of money, it doesn't mean he should be given a lot of money.
Lewis agreed with the pay Czar's recommendation, anyhow. You seem to be arguing that very rich people should be paid an enormous amount of money when they screm up even when they themselves don't believe they should.
I'm simply arguing for people
I'm simply arguing for people to have the right to earn what they can negotiate, and for contracts to be honored. Just because someone is wealthy doesn't mean that government should be able to trample on their rights.
Ken Lewis agreed with the czar so that he could just be done with it and close the chapter.
Finally, to turn it into a character issue regarding Mr. Lewis is to miss the point completely.
Confusion
Being in a demanding job and working hard isn't in itself something that is deserving of high pay. Otherwise we would pay soldiers and shopowners tens of milllions. Also (that bizarre 'need') salaries aren't paid just to keep people in jobs. They need to be related to the additional income they bring to the company's owners. Ken Lewis, to put it mildly, hasn't done that. If he had retired for the good life earlier it would have been better for just about everyone.
It's not about getting pay as
It's not about getting pay as an act of charity, it's about what kind of pay someone can command. You just won't get the kind of people who can run a multinational for a soldier's pay, yet you can get people to be a soldier for not much, regardless of the honor involved.
And obviously salaries are meant to get good people to generate income for company owners, yet the problem in this case with the czar is that people's contracts are being changed retroactively. If Mr. Lewis had agreed to certain targets related to his pay, and they were missed (whereby the contract dictated less pay as a result), then there wouldn't be a problem here and the pay would be adjusted without any need for a czar. The problem is that you have a very subjective and politically driven decision coming down from a czar, who has the power to step in and break contracts. It's a horrible precedent.
It doesn't matter what you think someone deserves as pay, if they can't get what they think will make a job worth their while, they just won't show up. People forget that for these types of people, working is usually a voluntary act. They don't have to do it.
Thus by attacking and limiting high pay you cause a certain cut of people to just hang up their hat and call it a day given that most of these experienced people are already quite wealthy. Especially since most tend to be older people, they can just hang out with their family, enjoy their already accumulated wealth and not have to deal with all the BS from Washington and a certain segment of the US population.
Pay
One of the key ingredients for a successful capitalist system is the acceptance of pay inequality. This pay Czar is an ill-thought out political tool.