The professional golfers kicked off their season in Hawaii this week and it reminded me of my first visit to the islands.  I was younger then and believed in my athletic skills beyond my judgment skills.  I had never tried to ride a surf board but that did not discourage me from trying. At the rental booth on Waikiki they gave me some wax and a board and wished me luck.  A man asked if I needed some help and of course I said no!  Having waxed my snow skis while growing up in Ohio, I figured I would wax my surf board the same way.  Needless to say, I could not stand up on the surf board and later I found out that surf boards require waxing on the top so you don’t slip, while snow skis are waxed on the bottom so you slide smoothly thru the white stuff.

Wall Street firms will be doing their version of waxing this week as they reveal their bonus awards.  Outrageous compensation has been taken for granted for so long that the sense of entitlement is firmly ingrained.  Not only will these firms ignore the government task force on oversight for compensation, they will also continue to ignore shareholders whose interests have been trampled on since the late 1980’s.  They will conveniently forget that the taxpayers loaned these companies billions of dollars.  Additionally, they will use their selective memory to talk only about the recovery year of 2009, after drifting frightening near the edge of the cliff the year before.  Hearing about salaries of $500,000 that need to be rewarded with bonuses that will be as large as $11,000,000 or more will be a hard sell for those who are out of work.

The irony of all of this is that several studies have recently been completed showing that the performance of the stocks of companies that pay outrageous compensation to their top managers move in the opposite direction.  The ratio of top pay compared to average employee compensation has gone from approximately 25 times to over 250 times during the last 40 years.  In other words, if the average of all payments for other employees is $50,000 the top pay is $12,500,000.  The January 3, 2010 New York Times magazine found one interesting response to this differential.  “A lot of our folks have second and third homes and alimony payments and other obligations that require substantial cash, one banker said.”

Oh, well now that makes it easier for me to support all that money going for that! 

  Proverbs 10:23-24 (RSV) “It is like sport to a fool to do wrong, but wise conduct is pleasure to a man of understanding. What the wicked dreads will come upon him, but the desire of the righteous will be granted.”

Monday Morning Message Sent 1/11/10

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