How little would a CEO have to make to avoid the media’s cries of “wretched excess?” That’s hard to say given the constant calls for pay caps by journalists.
CNN “American Morning” beat that drum again on Sept. 3 when co-anchor John Roberts asked William Cohan, contributor to the Daily Beast and author of [1]House of Cards: A Tale of Hubris and Wretched Excess on Wall Street,” about a recent study announcing top bank executives’ pay.
“I wanted to ask you a question about the banks’ CEO compensation news that you know, the top five um CEOs of – well top five executives of the biggest banks between 2006 and 2008 averaged $32 million in compensation,” Roberts said. “And in 2009 made $13.8 million. You talk about, you know, hubris and wretched excess on Wall Street.”
Cohan said that “it’s beyond outrageous” and called for a European approach.
“I mean what we need to do is begin to think like the Europeans, the European Union, which is putting caps on these executives’ salaries. Where’s the
According to the Telegraph (U.K.), European leaders Gordon Brown, Nicolas Sarkozy and Angela Merkel urged the E.U. to [2]limit bonuses.
Another CNN guest, Christie Hefner, former chair and CEO of Playboy Enterprises, told Roberts she was “encouraged by the compensation czar – I know he doesn’t like that name – but this ability to start looking from a third party perspective on what makes sense and evaluating risk as well as reward.”
But earlier that same morning co-anchor Kiran Chetry interviewed CBS Moneywatch editor-at-large Jill Schlesinger on the same topic. Chetry asked, “What control if any does he [obama compensation czar] have, if any, over these CEOs compensation?”
Schlesinger replied that he has approval over compensation of the top 20 employees for any company that hasn’t paid money back yet, but ultimately that companies would find a way around restrictions.
“The government cannot do it,” Schlesinger said.
Both segments on executive compensation ignored the constitutionality of the federal government intervening in compensation at all. Fox Business Network discussed that on May 14 and Jonathan Hoenig of Capitalistpig Asset Management called the prospect [3]“unbelievably frightening.”
“Where, where Obama believes he has any constitutional authority to set pay at a private company, I just don’t understand,” Hoenig said.
CNN also ignored the regulatory reasons (including Sarbanes-Oxley) for the economic collapse, placing the blame instead solely on banks. Chetry said “These are the same banks that took billions, that many economists say brought our economy, brought the nation to its knees and almost caused us to go back into a Great Depression.”