The Methodist Cure for Executives
The Methodist Cure for Executives' Excessive Compensation
The American populace has been stirred to a mighty anger in the present economic downturn at the news of Wall Street executives who, though receiving billions in subsidies from the government, have continued to do business - bad business, that is - as usual. Which means bonuses and Las Vegas junkets and private jets and $1400 parchment wastebaskets, perks in perpetuity, while the companies they head go bankrupt.
The president of the United States wants to put a cap on the executive pay of any bank or company that accepts federal billions. $500,000, or one hundred thousand more than the annual salary of the president himself, is the amount announced from the Oval Office. Several times this morning listening to reports on the radio, the announcer said, without irony, that executives would be limited to "just five hundred thousand dollars a year." "Just"!!! Heads of households east and west, north and south, would be happy to make that much in a decade. But, to be fair, someone has to keep Paul Stewart, Louis Vuitton, and Trump Tower in business.
Of course, the rejoinder from Wall Street will rise, that I don't understand. How can a poor parish priest tending a flock full of journeyman wage-earners possibly comprehend the gruelling stress of taking other people's money and multiplying it, you know, like Jesus feeding the five thousand on five barley loaves and two fish? Except AIG et al took the bread and fish, ate them, asked for more, and to the other place with the five thousand hungry mouths.
Here's what I don't understand: how anyone can spend $500,000 a year in the ordinary course of living. From what I have read I have an ally in this perplexity in Warren Buffet. Howard Hughes, were he alive and flying, might also concur. I never earned more than $50,000 per annum in fifty years of employment, but my clothes closet still holds more sports jackets than I'll be able to wear out before I shuck off this mortal coil and its tweed covering. But then I get no kick from champagne; and mere alcohol doesn't thrill me at all. Well... maybe I might spring for a brand new kitchen. My wife would like that. But the excess, my intimates fear, would probably go to charity. I guess I've simply lived too long with thrift to get the hang of luxury. Forgive me, Bernie. (Madoff, that is)
It appears that John Thain (of $1400 wastebasket fame) and others for whom large bonuses are an entitlement will have to learn to live like me. I shall be happy to share the secret of my thrift. It's really quiet simple. It isn't something I searched for. Rather, it was a strategy visited on me in the course of my employment as a Methodist minister. Those of you unfamiliar with the inner workings of a white middle class Protestant Church might be surprised to learn that some of the most stringent rules aren't written down in a book of polity. Like, the pastor should never own a convertible. Or visit the sick and infirm garbed in Bermuda shorts and a Hawaiian shirt. More to the present point, one such rule limits the pastor's salary to the median income of constituent families. Because if you, a layman, are paying the salary, you reflexively compare it with your take home pay. Not that you would be comfortable standing in the pulpit every Sunday and preaching; but, then, neither would the pastor, most of us anyway, be comfortable crawling under the kitchen sink and unclogging the drain. Equal pay for equally un-interchangeable labor. Which rule works favorably only for those pastoring flocks in Silk Stocking districts.
The Methodist Church unofficially endorses this rule by printing annually booklets listing churches (by name) and pastoral salaries (not with name). Here is an illustration of such a listing, from Central Connecticut, excerpted, I hasten to add, from a public document.
This practice seems to be uniquely Methodist. Over the course of the past six and a half years of retirement I have obtained several annual reports from churches of other denominations. None of them list in the annual financial reports to the membership the specific amount set for the pastor's salary. Usually the figure is lumped together with other salaries in the category of "Administration." The rationale for disguising the amount was explained to me years ago by the leading layman volunteer in a church agency where the executive clergy was paid more than the "going rate" and the amount was a mystery known only to the personnel committee. The leading layman claimed the average member of the board (half clergy and half lay) couldn't handle it.
From what I have been reading about executive compensation in banks and big publicly-owned companies that rationale - that the average joe or jane can't handle it - largely explains the multi-million dollar salaries and golden parachutes of those who lead the companies and lately driven the economy off the road of success into a deep, deep hole. Plus, by way of explaining the excess, they have crowded their board rooms with like-minded CEO's (not working stiffs, however talented and competent they might be) to whom the favor of a salary increase can be returned.
The Methodist cure would be to have the congregation - that is, the shareholders, not an executive committee or the board - vote approval of the salary and other perks. Ownership, whether it be a car company or a cathedral, is entitled to openness and full disclosure... and a say in how much the CEO and his underlings are paid. That kind of communal restraint will work a whole lot better than new federal laws.