Look Who's Coming to Dinner..or maybe a late continental breakfast
Fred Whittlesey
Compensation Venture Group, Inc.
After the last entry "Change is Possible" - check this out:
Committee to Hold Hearing on CEO Pay and the Mortgage Crisis
The Committee on Oversight and Government Reform will hold a hearing titled, “Executive Compensation II: CEO Pay and the Mortgage Crisis” on Thursday morning, February 28, 2008, in 2154 Rayburn House Office Building.
The hearing will examine the compensation and retirement packages granted to the CEOs of three corporations deeply involved in the current mortgage crisis. This will be the Committee’s second hearing on executive compensation practices. On December 5, 2007, the Committee examined the role of compensation consultants in determining CEO pay.
Note that one of those "three corporations" happens to be Countrywide Financial.
I am no fan of government intervention (and not much of a fan of government in general) but this is very interesting and should make for some great executive pay drama on C-Span. Like the cast of "Guess Who's Coming to Dinner" the list of "witnesses" is an all-star cast. (Boy, doesn't "witnesses" make it sound like a criminal trial? - Yes, your honor, I DID SEE him exercise those stock options.) The who's who of highly-paid executives, people who approve the pay for highly-paid executives, and people who don't really like highly-paid executives should make for an interesting broadcast which likely is the real objective of the Committee. In an election year. Pardon my cynicism.
I hope they're serving some nice coffee and pastries at this hearing because these executives are accustomed to quite a nice set of perks, which won't be detailed here because I'm not interested in inflaming the issue. But it is fun to read last year's proxy statements and see the details of their perks. Before they got fired.
Not to diminish the quote of Neil Armstrong, but this hearing is yet another small step for executive pay awareness but probably no giant leap for executive pay reform. Because the latter will require some big changes in how Compensation Committees, compensation consultants, and management teams interact. And so far those changes are about as far along as civil rights were in 1967, the year "Guess Who's Coming to Dinner" won an Academy Award. Yes, we already had the Civil Rights Act of 1964. But we know all about the time lag between ceremony and legislation and real change.
As Tillie said, "Civil rights is one thing. This here is somethin' else." Yes, high pay for executives is one thing, but what we'll hear about is this hearing is indeed somethin' else.
