Monday, October 06, 2008

Richard Fuld Jr. Lehman CEO.

Today Richard S. Fuld Jr., the Lehman chief executive sat through a congressional hearing about the collapse of Lehman bros. The questioning was not pretty and was quite to the point:

"You made all this money by taking risks with other people's money," Rep. Henry Waxman, D-Calif., the panel's chairman, said. "The system worked for you, but it didn't seem to work for the rest of the country and the taxpayers, who now have to pay $700 billion to bail out our economy."

I must admit I think this type of questioning and accusations are wrong. Mr Fuld was paid to run the company and that is what he did. Sure the system worked for him. Mr Fuld worked hard got promoted and was able to negotiate a fine pay package for himself. If the board of directors at Lehman Bros didn't think he was worth it they didn't have to pay him. I really think limiting executive pay is against the American way. Work hard, succeed and you should be paid whatever the market dictates. This is kind of like the NBA not allowing 18 year olds to enter the league. If the young men are talented enough to play....let them. I do understand it is in effect "a club" (the NBA) and as such can make whatever rules they want for entry, but the American way is to let people find their way to succeed in whatever chosen field they want.

By limiting executive pay you could divert strong candidates from applying for these jobs. Again I use a sports analogy. In the U.S. we struggle to have a top level mens soccer team. In a country with 300,000,000 people I find it hard to believe that we cannot get 15-20 young men and train them to compete on the world stage. We can that is for sure but these young men can get paid a much better wage by entering other sports or careers. Soccer here in the U.S. just does not pay enough (and there are not quite as many female groupies) for these men to pursue it as a full time career.

Don't limit executive pay. Sure Mr Fuld should be blamed for the failure at Lehman. If he misled the public then he should be prosecuted. But don't punish him because he made alot of money. Remember this is America !

Good Luck and Good Currency Trading



Post a Comment

Subscribe to Post Comments [Atom]

<< Home