Does Highest Retail Industry CEO Compensation Abuse the Executive Pay System?

At least someone stood up in court and objected to the Gottschalk bonuses, right? Nine days later, however, the bonuses were approved by the Delaware bankruptcy court, without further justification or explanation. You want half of a million dollars for the people who led your company to the brink of bankruptcy? Approved! It's like one of those loud payday advance commercials on late night television.

(Let's all remember to incorporate all future businesses in the state of Delaware, where there seems to be few consequences for doing a really bad job.)

If Gottschalk's goes the way of Circuit City, it's the creditors who will pay for those executive bonuses, right? Initially, yes, but rest assured that the price tag on your next Liz Claiborne sweater, Jones New York jacket, or Hanes cotton under thing will have a little Gottschalks belly-up bonus markup tacked onto it.

We, the consumers, ultimately pay the price for everything. If we, the shareholders, don't stand up and object to executive compensation when our portfolios are fat, our objections probably won't be heard over the noise when the organization is imploding. If we, the customer, do business with companies without regard to their values or the choices of their leaders, then we, the taxpayers, may find ourselves paying the price of our own unconscious participation.

I once worked for a client who decided to raise prices without first notifying any of the customers who were billed automatically each month for his company's services. When I questioned the integrity of that decision, his response was, "Most people won't even notice if we don't make a big deal out of it."

It seems that the inner workings of "the system" that Barney Frank referred to are a big deal, and the big deal has now been noticed. This leaves one big question hanging in the air. What, if anything, do we, the people, want to do about it?