FRANK BERNHEISEL

There ought to be a (new) law

February 16, 2009

There ought to be a (new) law There has been much talk in about executive pay. The US Congress has been particularly stupid on the subject. (Their economic and financial stupidity, as reflected in their hearing questions, has been even greater. But that is for another day.)

European and Japanese corporations have shown restraint in their executive pay, not so the US. Maybe it is a cultural thing -- we are, after all, "a nation of laws." Therefore, maybe we need a law.

As a holder of individual stocks, I receive reports and stockholder proxies. And in theory, I get to vote on executive pay. It is a farce. As an owner of the company, money wasted does not show up in my dividend.

I suggest that we pass a law that says that no executive of any publicly traded company can earn more than three times the salary of the President of the United States. Can anyone make the case that their job is harder?

The exception to this law would be: (1) a prospectus would have to be sent to all stockholders that makes the case for the increase and (2) no increase unless the majority of stockholders vote for it.

I do not have a problem with corporate jets and other stuff of like ilk that can make executives more productive. Writing off $2 million birthday parties for oneีs wife (Tyco) as a deductible business expense is another matter. Auditing accountants that approve such stuff should be prosecuted and the IRS should have more staff to review returns to catch the "evil doers."