It’s been a busy week for the salary czar. Like czars of old, he has made big pronouncements. Dictating what salaries should be for companies that took our tax dollars. On the surface, who can argue with that? After all, if they can set goals where billions are being handed out to top brass while the companies go broke, someone should help them set bonus rules.
Thinking like a businessman, not a political hack or a vindictive taxpayer, I start to think about the implications of the salary czar’s work. Look at GM, for example. They can’t hire a new CFO. No one wants to go to work for a company controlled by the government, just emerging from bankruptcy, and facing long odds for success. I know, we all think there is some poor soul out there who will take the job. There are lots of poor souls out there who would. Maybe they could hire Judy Boynton , former CFO of Shell Oil who lied to shareholders about the amount of reserves Shell had. Shell ended up paying millions to shareholders to fix that problem. She’s probably on the job market. Before that, she almost destroyed what was left of Polaroid. That is the dilemma isn’t it. GM needs the very best talent to save our tax dollars and get the company back private ASAP. But, the Salary Czar will mandate that they hire people at bargain basement salaries.
Government meddling will kill GM. It will probably kill all those on the salary czar’s list. Instead of saving these companies with our tax dollars as sunk costs, we will make sure we politicize them and destroy them. Isn’t this another warning that Obama’s plans to make us like France are bad ideas?
What happens to the competitors who face these companies with drastically reduced salary plans set by a pay czar? Will they be forced to reduce their pay levels to compete on expenses? Or, will they take the best of the best from the restricted companies and show risk is needed to get rewards? Will the actions of the salary czar force many of the best to seek jobs in London or Singapore to have the freedom to take risks and reap big rewards for their employers and themselves?
As this Administration raises the minimum wage and causes record unemployment for teens, it lower the high end to discourage the very best from working for these troubled companies or to leave them. Is the real goal with Obama to have the minimum wage and the maximum wage the same? After all the only rich in the former Soviet Union were those in power. The rest pretended to work and the government pretended to pay them and everyone lost. That was the country that invented czars, right?
Anyway you slice it this dooms GM. Without the best talent money can buy and incentives to take jobs with the stench of failure and the heavy hand of government hanging over your head, you just aren’t going to save GM. Don’t worry, government will find a scapegoat. It won’t be the salary czar. It’s too much to expect anyone in the government or the media to connect those dots two years form now.
