Vicious Rants of an Angry Yellow Man

I read that Bob Nardelli, CEO of Home Depot resigned under pressure from frustrated stockholders. This would seem to be a victory for the little guy until we found out that the severance package was worth 210 million dollars. This is the reward for guiding the company to a decline of 12% in stock value during his tenure. This is an example of skyrocketing executive compensation that demonstrate the culture of corporate greed in America. Add to this the buying off of politicians from big business and big unions, it is a wonder that those of us who works in small businesses with no clout can survive.

If this country is to be a true meritocracy, then we cannot have people who are doing a poor job be compensated excessively. The compensation packages of these executives are set by the board of directors with the recommendation of so-called consultants. Of course these consultants benefits by driving up the prices of the executives. Afterall there is no point in hiring consultants to recommend a small salary. The board of directors are often made up of execuitves in other companies so it is of no benefit to them to drive down salaries of executives overall. One of the board member of Home Depot is the executive at Countrywide who, as was pointed out by a commentor from an earlier blog here, received 60 million dollars a year from his company. So surely he is not going to vote for a small package for Nardelli. Executives who lead his company to great profit should be paid well. But shouldn't someone who did a poor job also lose compensation as a result? When a company is doing poorly, workers are layed off and investors lose stock values. Shouldn't the person who makes the most also suffer along with everyone else?

I am not a fan of big union either. There will be a blog on them in the near futue. But the execessive compensation of CEOs makes it harder to complain about the performances of the little guys. If in a capitalist society there should be no limit of what one can make, then there should not be safe parachutes to stop one from falling hard. Excessive severance packages not only hurt the bottom line but it hurts the morale of the average workers. All of us who are stock holders should demand accountability from the executives and the board of directors. This is essential for the competitiveness of our country.