Quick question:  Why did the banks fall?

Answer:  Greedy banks.

All these terms being tossed around, sub-prime mortgages, adjustable rate mortgages, home owner insurance, housing bubbles.. they’re all rooted in plain and simple greed.  And lack of accountability.

First, the greed.  We can’t blame these institutions for trying to make as much money as they possibly can.  That’s their job.  They have a duty to their stockholders to do so.  But that’s what happened.  How else do you explain the share buybacks and the lax mortgage policies?  It was a high-risk, high-reward scenario.  Fair gamble, right?  Wrong.

This is where CEO accountability kicks in.  If CEO A goes out and takes this gamble, two things can happen.  One, things will work out, he’ll be a legend on Wall Street, and he’ll walk away FILTHY STINKING RICH.

Two, things will flop, the company will lose money, he’ll be the goat of Wall Street, and he’ll walk away FILTHY STINKING RICH.. with his severance package.

Do you see what I’m getting at?  Would you be OK with making a fool of yourself, if it bags you around $20 million?  Me too.

These CEOs have very little incentive to not screw up.  Sure, they’re given bonuses for doing well, but they screw up?  Here’s a slap on the wrist, and $20 million in severance pay.  Is that right?  I don’t think so.

I say CEOs who leave their company worse off than when they got it be required to pay off the margin of difference, or at least some of it.  Put guidelines in place.  Maybe pay the CEO in stock, a large amount of which he must default if the company becomes worse off.

There’s a plan in my head somewhere for this, I just can’t quite get it in writing.  So see you later.

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