So, let me understand this correctly.
All across America, from manufacturing to education and from white-collar careers to professional athletics, the trend is to replace higher-priced employees with lower-priced workers (succinctly put).
The case is usually made that individuals who have become long in the tooth should be put out to pasture. The case is also made that the talent pool is so large that a decrease in skill level will probably not be noticed.
After all, cutting compensation has been the road to profitability for the past several years. While it might be questioned that sacrificing experience for reduced payrolls could be detrimental in the long run, keep in mind the current definition of “long run” on Wall Street is as nearby as the next quarterly earnings report.
Yes, every profession, industry, and even sports league is struggling with this “long in the tooth” issue, except for one, the bankers.
The excuse given was amplified by a recent statement from FirstMerit, a regional bank in Akron, Ohio.
They said, “Our incentive compensation package was devised to be fair and effective in maintaining, rewarding, and retaining executive talent with the skills and experience necessary to achieve our business goals and create long-term shareholder value.”
Are you kidding me? Next to Congress, the most questionable industry is definitely banking.
With robo-signings, securitization, shadow inventory, and fictitious accounting practices, the disgrace continues to mount on a daily basis not just domestically, but internationally as well.
As the world’s economy, including our own, sinks lower and lower, the culprits (bank CEOs) are lionized by the mainstream media.
Instead of doing a perp walk, the people who helped create this disaster are being rewarded with obscene pay packages. Could not a young, unsullied, academically trained finance major do just as poorly as Vikram Pandit has done at Citigroup?
Couldn’t he or she have signed off on all the Citigroup missteps that required government intervention, reverse splits, and shareholder losses?
Much like Pandit, I’m sure the young new CEO would have been very capable of conducting press conferences with speeches written by staff workers.
Finally, couldn’t Citigroup have gotten this new CEO for a whole lot less than Pandit’s 2011 salary of $14.9 million?
Every other industry is saying “out with the old and in with the new.”
Isn’t it about time banking did the same?
“Rewarding and retaining” should be based upon true accomplishment, not fantasy, falsehood, and corruption masquerading as success.
This might even work at the White House too.
Along with his 40-years of dedication in the financial services industry, Bill is the President and CEO of GPSforLife, has recently authored a highly successful book entitled 44th: A Presidential Conspiracy, publishes his dynamic monthly financial newsletter MacroProfit, and faithfully continues his third decade on the radio with It’s All About Money, which can be heard weekdays on Money Radio in Phoenix and in podcast form on his website (and on smartphone apps) published at billtatro.com weekdays at 5pm Eastern. Bill can be reached via email at firstname.lastname@example.org and on Twitter @tatroshow.