atans1

Holding highly paid to account

In Corporate governance, Political governance, Public Administration on 05/04/2015 at 4:53 am

Hmm, maybe PM should think of adapting these ideas for himself, his ministers, senior bureaucrats and CEOs of TLC and other commercial GLCs.

HOLDING EXECUTIVES ACCOUNTABLE Should top executives be required to contribute a chunk of their pay to a pool that would pay penalties if misdeeds were later uncovered at the company? That is a nonbinding proposal that Citigroup shareholders will vote on next month, notes Gretchen Morgenson in the Fair Game column.

A somewhat similar idea can be found in a law journal article by Greg Zipes, a trial lawyer for the Office of the United States Trustee. Mr. Zipes proposes that top executives sign a contract pledging to pay back 25 percent of their gross compensation in the event of major corporate misdeeds. Such proposals, Ms. Morgenson says, are intended to combat the “perverse incentive” that encourages executives to take on huge risks in order to earn rich pay and bonuses, safe in the knowledge that the consequences won’t be costly.

Maybe there should be pools for the ministers, senior bureaucrats and CEOs where they contribute part of their gross remuneration.

If their peers cock up, the money in the pool gets forfeited to the Consolidated Account.

Maybe ministerial peer pressure can keep Lui on his toes. And the ex-SAF generals running SMRT and NOL. CEOs of DBS, SIA, Keppel, CapitaLand etc will make sure that incompetent peers are “moved” on.

Advertisements
  1. I think this is a great idea.

    However, given that these are public figures, such “clawbacks” should be moderate to light in economic effect ( not punitive) but maximum in social public broadcast and symbolism.

    A truly successful society is one where public leaders feel maximum accountability towards the enlightened aggregate social sentiment.. regardless of the economic effect.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: