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“Oh my, oh my,” chittered the chicken littles of Wall Street when the public demanded cuts in their obscene pay packages. “The sky is falling,” they cried, flocking to Washington to save their pay.
Wall Street’s preening executives insisted that the lynchpin of America’s entire financial system was their own multimillion-dollar salaries, bonuses, stock options, and perks. Cut their money, they threatened, and they would flee to greener pastures, taking with them the expertise needed to repair the financial system.
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This was a ludicrous claim, since there’s not a huge job market for failed bankers demanding rich rations and constant stroking. Nonetheless, skittish Washington officials backed off, and the pampered bankers of Wall Street are again feeding on multimillion-dollar pay packages. Still, one wonders, would they have actually fled if Washington had stood up to them?
One who did take a stand was Kenneth Feinberg, a special regulator brought in to set the pay of top executives in five financial and automobile companies that got multiple bailouts from us. He has cut their pay by 77 percent since 2008. Yet, the vast majority of them stayed on the job, with only 15 percent choosing to look elsewhere or retire.
Why? First, even with their paychecks whacked by three-fourths, the top execs are still drawing an average of $1.6 million a year – enough to make ends meet, even for a corporate big shot. But, second, it turns out that not every executive is a greed machine motivated only by money. Such human factors as personal pride and a sense of loyalty (both to their companies and their country) made them want to stay and help fix America’s economic wreck.
So let’s stop pampering the chicken littles of Goldman Sachs, JPMorgan, and other firms. They’ve got nowhere to go, and even if some leave, others can do the job.
“Few Fled the Companies Constrained by Pay Limits,” The New York Times, March 23, 2010.