Congress Should Increase Congressional and Judicial Pay; Shareholders Should Reduce CEO/CFO/COO Pay (March 5, 2007)

Supreme Court Justice Kennedy recently testified that the salaries of federal judges should be increased to provide some competition with the private sector.  He points to the substantial signing bonuses paid to former Supreme Court judicial law clerks when they go to work with wealthy law firms.  Many young law students plan to retire on the federal bench.  The power and prestige are the most significant draws. However, the pay must be competitive or only the wealth will apply.  Raise their salaries consistent with his request.

Congressional salaries should also be raised.  The public is better off if the hired help is paid by the people rather than by the lobbyists.  Fifty thousand a year is a cheap and prudent investment.

Arguing that Congressional salaries should be increased is never popular.  After passage of a pay raise, every candidate running against an incumbent makes a stink.  To provide political cover, a commission should be established and the findings adopted by voice vote.  Commissions provide cover.

CEOs, CFOs, COOs and their colleagues are paid salaries and bonuses far out of proportion to their contribution to their companies and shareholders.  The contention that the companies must pay big money to attract talent is a chimera because there is no thriving market for the positions.  A small select group simply pays more to their management which provides an excuse for their colleagues/competitors to pay more and thereby to provide an excuse for other companies to pay themselves even more.  When the company makes money, for whatever reason, management issues huge bonuses.  When the company loses money, management continues to draw inflated salaries and/or parachutes out with a bucket of loot. The market is broken beyond redemption.

The government is not the player to challenges the salaries.  Large shareholder groups should simply dictate the pay.  The various state PERSs (Public Employees Retirement Systems) programs in particular should state that they will sell shares and not buy shares unless management sets salaries within a defined range.  All shareholders should vote on all executive compensation at every annual meeting.

Bumper sticker of the week:

We all live downstream

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