Humor: Improved compensation packages for our pols
Just because government leaders can't fix anything doesn't mean they need to be paid a fixed salary. Here's how to fix the fix.
Why is government bloated, bureaucratic, and inefficient? Why can’t government be run like a business?
The answer is that government could be run like a business. It could be lean, responsive, and efficient. Government simply needs to adopt proven business practices. Starting at the top.
Consider executive compensation. Corporate America is the world leader in executive compensation. Corporate America pioneered sophisticated and effective means to motivate and compensate top management. Corporate American developed the short-term bonus, long-term incentive plan, incentive stock option, performance-based stock award, deferred compensation plans, phantom stock plans, shadow stock plans, golden handcuffs, golden parachutes, and a plethora of other plans and perks.
These compensation tools, astutely employed by corporate boards to properly incentivize and remunerate top executives, remain the engine of America’s economic growth. Unfortunately and inexplicably, government has ignored these brilliant private-sector executive compensation techniques. Elected officials from president to the Arizona governor to the Seattle City Council are all paid a fixed salary. They receive no performance-based pay. Their compensation has no equity component. In short, they have no skin in the game. Their financial incentives are not aligned with their constituents.
Sadly and consequently, instead of concentrating on economic growth, Obama regulates banks and drug companies, Arizona Governor Jan Brewer outlaws Hispanics, and the Seattle City Council worries about mistreating circus animals, exhibiting cadavers, and being the only American city with its own foreign policy.
They would all behave differently under a well-designed incentive pay plan. If every elected official received a short-term bonus, long-term incentive plan, incentive stock option, performance-based stock award, deferred compensation plan, phantom stock plan, and shadow stock plan based upon economic growth, we would get economic growth.
Let’s initiate “Performance Pay For Politicians.” It worked on Wall Street. It can work in Washington. Piece of cake.
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Comments:
Posted Mon, Aug 2, 7:54 a.m. Inappropriate
I think we should privatize the whole government- just sell the whole operation to the highest bidder. I am sure that some of the mega-corporations out there are ready and willing to take on the job.
Of course that could lead to a few shake-ups and spinoffs, but hey, it beats another Civil War.
At least everyone who worked for the government would be compensated based on their accomplishments, and not just for who they know and how well the play the game.
Posted Tue, Aug 3, 4:40 p.m. Inappropriate
I want to be on your side on this. Money is a great motivator. But the problem you'll find is defining what exactly we should compensate politicians for.
We already see politicians as making the government look good in the short term at the expense of the long term (no new taxes / more new services). Adding in pay to make the government look even better in the short run would bring our system further out of control. Just look at how bonuses have worked out for our banks...
How could we put pay in the picture both for corporations and governments that will not only ensure short-term performance but also long-term performance? How about bringing pensions back. But not just normal pensions, let's make them performance-based.
Selling off schools to make your administration look solvent under this system may hurt you in the long run. Adding quality education programs that cost a lot now may help your retirement 30 years from now as those children start local businesses and pay their taxes.
Posted Thu, Jan 20, 9:02 p.m. Inappropriate
I'm glad that this is considered a humor piece. The failure of the incentive-based compensation model that is proposed here is what has given us Enron, World.com, etc., etc..
No doubt we're tired of hearing about these failed models of business but to think that they could actually be a model of how we'd govern ourselves is downright scary. Human nature is such that most of us go for the easy money. It is hard enough for politicians to keep the public good front of mind without having an incentive package offered to them that could be controlled and compensated by those who are in a position to benefit the most.
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