Tom Reese/Paul Rubillo, Dividend.com
Many top execs in the finance space may find it difficult to stay in their current positions if government-imposed compensation limits are put into place.
Let's look at Goldman Sachs (GS) CEO Lloyd Blankfein's compensation in 2007. Factoring in salary and bonus, which includes stock and options granted at the beginning of the fiscal year to reward performance the previous year, the total compensation amounts to $57.6 million. That is an amazing amount of money, and certainly one of the reasons that Main Street America is livid about the state the economy is in right now.
While we agree that sort of compensation (on paper) is extremely high, we're fearful that the top talent that may normally be attracted to top level positions in government-aided firms may instead look to other areas where profits may be limitless, such as private equity.
The Bottom Line
If we had confidence in the government being able to right the economic ship, then we wouldn't worry about these sort of things. The November election certainly adds a layer of uncertainty as to how long this present bailout team will actually be in power.
We're not in favor of over-the-top compensation, but we as a country cannot afford to have our largest banks being run like so many other money-losing government operations (of which there are plenty). Hopefully, whoever the new administration is, we be prepared to tackle the change-over.
Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.
