06/24/2008 05:12 am ET | Updated May 25, 2011

John McCain's New Populism?

Obscene CEO payouts and stock options, golden parachutes and now golden coffins?

Golden coffins are "severance packages", which have been hidden from shareholders until new disclosure laws launched in 2007 finally kicked in.

Last week, the first ones surfaced and the Wall Street Journal published the worst examples: $298.1 million for Comcast CEO Brian Roberts; $288 million for Nabors CEO Eugene Isenberg; $115.6 million for Occidental CEO Ray Irani and a posthumous fee of $17 million for CEO J.M. Bernhard, of Shaw Group, to insure he doesn't compete from the grave.

This latest greed-gimmick finally smoked out a comment about CEO excesses from Republican candidate John McCain. Last week before a small business organization, he pledged to crack down on abuses and to bring about laws which would let shareholders approve all CEO compensation, including severance packages.

But just hours later, he performed at a fundraiser hosted by some of the most obscenely compensated Wall Street denizens in the country. McCain's pledge to attack Wall Street's greed wasn't repeated apparently.

It's also important to note that McCain last spring opposed a shareholder rights measure in the Senate (called the Shareholder Vote on Executive Compensation Act) which had been sponsored by Barack Obama. It was passed in the House but stalled in the Senate.

Under Obama's Shareholder Vote Act, shareholders could not veto a compensation package offered to an executive and would not place limits on pay but would have a means to publicly express their position.

McCain the Hypocrite
McCain's maneuver last week should not disguise that he is simply another front man for America's "capitalists" who appear hellbent on destroying capitalism through payouts that often add up to more money than the GDP of third-world nations. Worse, these payments are often not benchmarked to performance nor are they in tandem with benefits for fellow shareholders.
There is nothing wrong with making fortunes, but the role of government is to insure that these executives are accountable to their partners, or shareholders, and that they pay their fair share of taxes to the country.

Neither is the case in the United States at the moment.

And McCain can "pledge" all he wants but he hasn't walked the walk in the Senate in past years, nor has his party ever done so.

CEO compensation soars, irrespective of poor results or shareholder objections, because executives and their board cronies often hide amounts, rig their corporate bylaws, and lobby Congress, to maintain shareholder disenfranchisement. This is the corporate equivalent of dictatorships whose control is automatically rolled over unless shareholders mount oppositions which are both expensive and sometimes impossible.

McCain the Wimp
Where is the champion of the downtrodden, the maverick McCain who takes on any bully, foreign or domestic, no matter how powerful? Making a populist promise, the collecting funds from Wall Street.

Even President Bush waded into the issue last year but said government's role was to stay out of executive compensation.

That's just wrong. Policing executive pay is part of astute economic management and is essential in preserving the sustainability of corporations, insuring fairness in terms of taxes and incentivizing good managers, not subsidizing mediocre ones.

In the absence of intervention, the trend worsens. In 2007, the median compensation for CEOs at America's 50 largest companies was $15.7 million even though many of these companies performed badly.

This is the way free enterprise can die, by a thousand cuts inflicted by greedy players and no cop in sight.