Ask people what they are worth when doing their jobs and you are likely to get an answer of a payroll check much bigger than what you would be willing to pay.
But, when you ask people what they are worth and give them the authority to write their own check, what will happen? One possible outcome is that they will decide they are worth a lot.
That is what has happened with the new Public Company Oversight Accounting Board. Responsible to the Securities and Exchange Commission, the new board members took, as one of their first actions, a vote on how much to pay themselves.
Close readers of Fedsmith.com will remember they voted to pay the chairman $560,000 and each member $452,000. Arguing that they needed to be able to attract the “best and the brightest” to the new organization, the directors concluded they should receive salaries similar to what they would get in similar executive positions of some private sector companies in the financial industry.
When Congress heard about the new salaries, some quickly compared their salaries to others such as the President, Supreme Court justices, and the members of Congress. Not surprisingly, some Congressional representatives decided the salaries were “exorbitant.”
No action has been taken yet but, according to the Wall Street Journal, pressure is increasing on the Securities and Exchange Commission to roll back the salaries.