HP’s Fiorina schools Obama on executive pay
Rest easy, Hewlett Packard employees, retirees and the legions of Coloradans laid off by the technology giant. Ex-CEO Carly Fiorina has some words of wisdom for President Barack Obama on how to run a business.
Fiorina criticizes the president’s mandate on capping executive pay following public outrage over loosey-goosey compensation standards among the Wall Street firms bailed out by taxpayer dollars.
In a guest commentary posted at CNN.com, she offers these pearls:
I don’t think this is the answer, although it is an understandable reaction. It’s arbitrary: Why not $400,000 or $600,000? It’s incomplete. It only applies to institutions that will receive more government assistance going forward. And it doesn’t strengthen our economy when government decides how much each job is worth. In America, we leave that job to markets.
So what’s the answer? To strengthen transparency, all aspects of CEO pay and perks should be fully disclosed on a regular basis. This should include airplanes, cars, golf-club memberships, bonuses, stock options, retirement plans and salaries — in short everything that a common-sense person would consider part of a CEO reward package.
In addition, “clawback provisions,” which require a CEO to return compensation to shareholders if promised results aren’t delivered, should be standard fare.
Finally, when a company comes to Washington for American taxpayer money, it is an admission that mistakes have been made and major bets have failed. These CEOs should be prepared to tender their resignations and those of their boards. To earn a bailout, a CEO and board should be held accountable.
Ironic advice to say the least from a vilified chief executive who scooped up a golden parachute in excess of $40 million after being fired by HP.
Fiorina’s stormy history doesn’t end there as political counselor. She was an advisor to GOP presidential candidate John McCain until she was “disappeared” from the campaign trail after bluntly declaring that neither he, nor vice presidential nominee Sarah Palin, were capable of running a major corporation.
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