Who wants a $500k Job?

Obama’s move to limit salaries and bonuses for companies receiving taxpayer funds seems like a no brainer in the political popularity game and one wonders why it was never put in place in the beginning. Why are such high salaries expected by executives when they’ve allowed their companies to get into so much trouble. One could argue that they their pay must reflect their huge responsibility, company performance from previous years or keeping up with market inflation yet they never get penalized for poor performance.

While some argue that this will cause high talent to go elsewhere, I tend to disagree in an economic depression. With so many companies facing financial problems, I’m sure someone will be happy to take a five hundred thousand dollar salary away from someone else and probably do a half descent job. Those that want to receive high salaries elsewhere would have to wonder where are they going to go? Most of the other major financial companies and institutions are also feeling the pinch and probably not thinking about expanding their executive staffing levels.

High priced talent doesn’t always result in success. I can think of one company as an example. When Nortel crumbled back in 2001 during the dot.com market bust, they ran into accounting problems. Nortel went through a few seemingly worthy candidates with no positive results. They could have thrown all the money they had at the best and the brightest and the most experienced but it probably would not have made a difference. The reason is the market was not willing to throw huge sums of money at them in the form of new orders and contracts.

With the current economic crisis spread across so many sectors, fresh liquidity and spending required to quickly grow business is highly unlikely. If banks continue to hoard their funds, purchase executive jets *cough* citigroup *cough*, make borrowing difficult for even creditworthy customers at higher than expected rates, the little guy at the bottom doesn’t stand a chance. Foreclosures continue and are starting to affect regions which were thought to be strong.

January is over and the job toll for the first month of 2009 continues. Every few days another company announces tens of thousands of job cuts. Most of these people will become the burden of tax payers and most of them will probably not be able to find similar level paying jobs right away. Depressions tend to take a while to get out of the last I heard.

So who wants a $500k a year job?