THE HEIGHT OF HYPOCRISY

Today, for the second time in three weeks, Congress asked the chief executives of the Big Three automakers to give up their salaries and work for $1 in 2009. When Ford CEO Alan Mulally was pushed on the question before Thanksgiving, his response was, “I think I’m O.K. where I am.” But since then, his position has changed.

Today, as part of their assistance from the Federal Government, Mulally, General Motors CEO Rick Wagoner and Chrysler head Robert Nardelli all pledged to take a salary of $1 for the coming year. And while millions will be cheering, I will not be among them. Not because these overpaid, underachieving execs will take one in the shorts. But because, in my opinion, they’ll take it in the wrong pair of shorts.

Are the CEOs of the Big Three overpaid? Probably. But in most cases, their salaries aren’t the problem. To the average American, a salary of $500,000, $1 million, $2 million seems completely exorbitant because 99.99% of us will never even sniff that kind of salary even though, in all fairness, many of us work as hard or harder than the guys in question. The difference is, we’re not responsible for hundreds of thousands of employees, productivity of a dozen car lines, and if you believe the press over the last month, a large part of the financial solvency of the United States. These guys earn their salaries. Where they deserve to get hammered is in their bonus structure.

If you want to get outraged about something, be angry at the Freddie and Fanny execs, the Morgan Stanley execs, and all the other execs who made millions in bonuses while their companies went down the tubes on their watch. Get pissed at the execs who continue to earn millions in bonuses at companies that have failed for years, but have been too stuck, rutted, short-sided, lazy – whatever - to get fresh management. Shoot, reach back and stoke your ire at Enron and WorldCom. Bonuses are by definition an earned extra. In principle, they should be tied to the financial performance of the company. But in too many companies, bonuses and stock options are guaranteed regardless of company performance.

Who the Hell do these guys think they are? Professional athletes?

Now we have Congress, standing on a whopping 12% approval rating, calling out Detroit for inefficiency and overindulgence asking its leaders to take a 2 million% pay cut as a largely symbolic gesture. Talk about hypocrisy. Had Congress done its job over the past 12 years, much of what we’re going through right now could have been avoided completely. And I certainly don’t see anyone in the Senate or the House stepping up with solutions.

You want to send a message to America, pay these guys their $1 million dollar salaries and either tie all their bonuses, ridiculous stock options, company jets and spa trips to the Mediterranean to the performance of the company or get rid of them all together. And while you’re at it, figure out how to tie the Unions into it too. As long as every car coming off the line at Ford, GM and Chrysler has five times the legacy cost of a Honda or Toyota, they’ll never catch up. As long as Union rules require three people to do the job of one and allow for laid off employees to earn 95% of their salary for up to two years for sitting in a “job bank” playing cards with their buddies, they’ll never catch up. As long as innovation is stymied because it’s too hard, too costly, or might cause a negative quarter, they’ll never catch up. And neither will we.

Since rejoining Apple in 1997, CEO Steve Jobs has taken a salary of $1 per year. In 2007, he exercised an option on 120,000 shares of stock that were set to expire worth $14.6 million. He owns almost 5.6 million additional shares of Apple stock worth more than half a billion dollars. The company gave him a $90 million jet. Steve Jobs makes plenty of money and you know what? Nobody begrudges him a dime of it. iPod. iPhone. iTouch. Macintosh. Apple has consistently produced the most revolutionary products of the 21st Century. They have earned their way to category dominance.

When the automakers finally decide on evolution or revolution and can match Apple’s sense of innovation and customer connection, their money will come and it will come in a Tsunami. It’s all out there waiting. The question is, who wants to step up and earn their way.