One of the things that arises in any discussion of economics with conservatives is that the market system is cruel but fair. They often bring up the term ‘creative destruction’ which refers to the demise of both individuals and businesses (economically speaking of course) when they simply cannot compete. The consequences of failure being failure for the people involved is a great thing they say, because it makes for a more efficient system. It’s why Mitt Romney likes to be able to fire people.
Of course when it comes to their own compensation conservatives have a different take on this thing. Case in point is Meg Whitman, previously an unsuccessful conservative Republican candidate for Governor of California and current an unsuccessful CEO of Hewlett Packard. But this lack of success hasn’t stopped Ms. Whitman from accepting about $15 million in compensation for her failures.
|Why so concerned Ms. Whitman - You Made $15 million and the shareholders lost 40% of their investment|
Not your problem or fault is it?
Whitman, who took a salary of $1 last year, reaped a performance-related bonus of $1.7 million, more than $7 million in stock awards and $6.4 million in options, Hewlett-Packard said in a yesterday. Whitman, who was already on the board, became CEO in September 2011, just before the end of that fiscal year. In that period, her compensation was $16.5 million.
Wow, performance related bonus. Well how good was that performance?
Shares of Hewlett-Packard have declined 39 percent in the past year, as Whitman works to turn around the world’s biggest supplier of personal computers after five straight quarters of declining sales and years of botched deals, management tumult and strategic missteps.
Well everyone can see how well Ms. Whitman performed and how lucky the shareholders were to have her. After all, had the shares just performed equal to the S&P 500 Index the shareholders would have had a nice taxable gain, instead of the huge loss. Oh, wait a minute.
It is still too early to see if Ms. Whitman will be successful in turning around HP, but wouldn’t it be nice if her big compensation waited until she actually did that? Oops, that’s not the way conservatives operate, pay for performance is something for everyone else, they get paid regardless.