Editorial: Cradle of liberty missing signs of revolution

Staff Writer
Mount Shasta Herald

As the executive pay controversy starts to take on a Boston Tea Party vibe, the revolutionary tone seems to be resonating everywhere except Boston.

A report this week shows a growing number of companies in corporate America are freezing salaries, reducing bonus pools and considering rules that would give stockholders more say on pay.

A similar shift is emerging among nonprofits, where consultants who devise standards for executive compensation say salaries will be subject to far closer scrutiny.

And in the wake of the AIG debacle, Washington is working on legislation to give shareholders more control over pay and keep bailout recipients from giving out obscene bonuses.

More than anything this is an act of self-preservation. Joe Six-Pack – taking on the mantle of a modern-day revolutionary – is close to throwing the mother of all nutties.

And who could blame him.

While he worries about having to go on the dole, he’s barraged with stories that make it appear as if much of what he pays in taxes and donates to charities is feeding an ever-increasing number of six- and seven-figure salaries.

On the national front, attention is focused on the extreme end of the spectrum, where million dollar bonuses are going to executives at bailout recipient AIG. But comparatively modest numbers locally are also fueling the frustration.

Even if the compensation is justified, people beaten down by the recession feel even poorer when they see how many public employees make more than $100,000 a year and how many local charitable groups pay leaders two or three times that.

The median CEO salary at the nation’s largest nonprofits in 2008 was $326,500, according to The Chronicle of Philanthropy.

Executives at nonprofit hospitals came under fire recently after an IRS survey found many – including those in our area – earn $500,000 a year on average.

Many of these people have immensely pressure-filled jobs and market forces should play a role in figuring their salary.

But the IRS was justified when it recently revised its form 990 – which nonprofits must file annually – to require more details on executive pay. We are also encouraged to hear from Wellesley compensation consultant Lindalee Lawrence that nonprofit boards nationwide are largely holding down compensation.

The one place where the salary orgy continues unchecked is Beacon Hill.

Among the stories coming out of the state capitol this week:

State Sen. Marian Walsh is handed a $175,000 state job that had been vacant for a 12 years.

Transportation Secretary James Aloisi’s sister Carol is assigned to an empty State House office for six months and collects a $60,000 as a chief of a nonexistent staff.

Two sheriffs in the state’s quietest counties get $26,000 raises that put their salaries at $123,000.

Federal, corporate and nonprofit actions that may have appeased voters on the issue of salary are undermined by such largesse. As is any campaign to justify steep cuts to state programs and aid.

Gov. Patrick, this is not “trivial” and it must stop. If you and the Legislature don’t read the tea leaves soon, the revolution may yet come.

The Patriot Ledger