Thursday, February 5, 2009

Capping Bank Exec Compensation Not The Answer : 7 Alternatives

A typically styled Hampton Inn in Farmville, VAImage via Wikipedia

7 More Impactful Alternatives to Capping Executive Comp

President Obama announced caps on executive compensation for banks and financial institutions receiving funds from the TARP program. This will play well in Peoria, but it will ultimately be a meaningless gesture probably create more problems than it will solve.

It doesn't seem to address:

  • compensation equity across an organization
  • talent management
  • retention of key talent
  • changing incentives for the majority of employees in the organization
  • establishing new cultural norms for the behavior of the organization
I am sure there are others.

Feel free to point 'em out in the comments!

I would rather see President Obama require "Top Executives":

  • to fly coach when they travel on business
  • to eat in the employee cafeteria and talk to their employees
  • to sleep at the local Hampton Inn or Holiday Inn Express (they might wake up smarter! check out the video below)
  • to have to work one day a week in a call center or run a bank window
  • to meet with their customers on a regular basis and answer questions
  • to have their bonus programs remain intact, but measured by goals that actually serve the interests of the public
  • tie a portion of their compensation to customer service satisfaction
I'm okay with the idea that they should only have to do this until such time as their companies pay back the funds they are receiving from me, the American Taxpayer.

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