Executive Compensation - Based On Who You Know

President Obama and the Democrat Socialists that control Congress have been screaming for months about excessive executive compensation paid to bank executives. It is true that many major Bank CEO's were paid millions of dollars; but as a percentage of their revenues, they were probably not paid any more than any other major company CEO's. In any case, it really must depend on who you know when it comes to Executive Compensation. It was recently reported that Ed Whitacre, the new CEO of GM (Government Motors) has been given a pay package of $1.7 million in base pay plus stock of $5.3 million available to him beginning in 2012. Whitacre is at GM to manage the "come back" of GM.

Whitacre is the former retired CEO of SBC/ATT and already a millionaire many times over. What is even more interesting is that Whitacre, who fired the former CEO of GM, Frederick "Fritz" Henderson, has rehired him as a Consultant for $59,090 a month. Based on an eight hour day, that amounts to roughly, $2,955 per day or $709,080 per year; not bad for a guy who was fired. I guess Henderson will lose his eligibility for weekly unemployment checks. What is interesting is that prior to Mr. Henderson's firing by Whitacre, Henderson was earning $5.5 million, which included $1.3 million in base pay with the rest being stock options. So it appears that Ed Whitacre did OK for himself, didn't he, since his package appears to be higher. This is for a company, GM, that had to file bankruptcy, borrow more than $50 Billion from the federal government that has yet to be paid back and is yet to be profitable. What is wrong with this pricture?

By contrast, the new CEO of Bank of America, Brian Moynihan, a much bigger company, with Billions in annual profits, just received a base salary of $950,000 with bonus yet to be defined. All should remember that these companies are governed by Obama's Pay Czar Kenneth Fineberg, who had to approve these compensation packages. However, there is one big problem with all of this. The major banks that received TARP money, some of which were forced to take it even though they did not need it, have all paid back their loans plus high interest. Government owned GM and AIG have not paid back their government loans and perhaps never will. And, nationalized, Fannie Mae and Freddie Mac not only have not paid back their federal loans, they have been given an open, unlimited federal check book to fund more risky loans, which was the basis of the financial crisis in the first place.

This is a financial world turned upside down. Obama wants to charge the 50 biggest banks in the United States an annual $90 Billion penalty tax. This is in addition to normal federal corporate income taxes that currently top out at 35%, about the highest in the world. At the same time, Obama who has never managed a corner 7/11, keeps scolding the banks for not making loans to small businesses. Obviously, if the federal government confiscates an additional $90 Billion a year from major banks, that have all paid back their loans plus interest, that is $90 Billion that they will not have to make loans to help grow the economy. Well dah!

Believe me, I am no defender of major banks and particularly the usurious credit card rates they are charging today, when they are borrowing money from the FEDS at very low interest rates; but I am a defender of common sense. Approving Ed Whitacre's pay package at bankrupt GM (Government Motors) while screaming at the major banks about Executive Compensation and attempting to penalize them when they have paid back their loans is just plain crazy economics. President Obama and the Democrat Socialists that control Congress are completely out of touch with reality. These people have never worked in the real world and therefore do not understand business. And, it is up to the owners of a company, the shareholders to approve Executive Compensation not Big Brother Obama.

Of course, GM is owned by the federal government and the unions, which gives Obama the right to control Whitacre's salary; but obviously Executive Compensation in this country is based on who you know. I guess we should not be surprised Government employees on average make considerably more than private sector employees; hence the reason our taxes are so high. So, none of us should be surprised that Whitacre at bankrupt GM, as a government entity, is paid more than Brian Moynihan at Bank of America even though GM is not profitable and B of A is very profitable.

We have to take back our country to stop this fiscal insanity and all of Obama's Socialist Schemes. We must elect common sense Conservatives in 2010 and 2012 that support a balanced budget, an end to all the bail outs and SwindleUS Plans, term limits, limited government, a strong national defense, the sanctity of life and family values. GM (Government Motors) is just another example of government out of control. The bail out of GM and Chrysler never should have occurred, particularly since both companies had to file bankruptcy anyway. Obama took from the bond holders of GM, that should have been first in line, and gave ownership to the auto unions as a pay off to his PEEPS. Can Communism be any worse? We have to take back our country in 2010 and 2012. We can do it. We must do it.