The real executive compensation solution…and a bid for some terrorists I can call my own…

Maybe the problem in the United States isn’t that we’re paying our business executives too much. Perhaps it’s that we pay our government officials too little.  The Obama administration has made headlines this week by appointing yet another czar, this one to ensure we don’t pay too much to the executives of the financial institutions ...

584955_090612_palau2b2.jpg
584955_090612_palau2b2.jpg

Maybe the problem in the United States isn't that we're paying our business executives too much. Perhaps it's that we pay our government officials too little. 

The Obama administration has made headlines this week by appointing yet another czar, this one to ensure we don't pay too much to the executives of the financial institutions the United States has bailed out. They have also made noises about trying to tackle the broader issue of executive pay in the United States. The second point is idle posturing that almost certainly will amount to little constructive change. The first has already sent the companies we bailed out scurrying to the exits of the TARP program and it will be a while before we see whether this is a healthy step, getting them off the dole, or an unhealthy one, with institutions hopping out of their hospital beds before they were fully cured. I also can't help but wonder if cutting executive pay is the best way to attract the kind of brains and efforts that will be needed to fix our busted banks.

Maybe the problem in the United States isn’t that we’re paying our business executives too much. Perhaps it’s that we pay our government officials too little. 

The Obama administration has made headlines this week by appointing yet another czar, this one to ensure we don’t pay too much to the executives of the financial institutions the United States has bailed out. They have also made noises about trying to tackle the broader issue of executive pay in the United States. The second point is idle posturing that almost certainly will amount to little constructive change. The first has already sent the companies we bailed out scurrying to the exits of the TARP program and it will be a while before we see whether this is a healthy step, getting them off the dole, or an unhealthy one, with institutions hopping out of their hospital beds before they were fully cured. I also can’t help but wonder if cutting executive pay is the best way to attract the kind of brains and efforts that will be needed to fix our busted banks.

Meanwhile, I have arrived in Singapore, home according to one count, of the 30 highest paid government officials in the world. And trust me, given the extraordinary success this city state has enjoyed, none of the people with whom I met today were complaining that those officials were overcompensated. This country wants the best minds in the government and recognizes that they have to pay to get them there otherwise they go work in the financial community, sell their souls and ultimately add to the overcrowding problem that is currently one of the biggest social issues facing Hell.

Come to think of it, the overcrowding in Hell probably plays directly into the hands of management down there. I know this because I was in Mumbai airport last night. And for all my enthusiasm for India, Mumbai airport, thronged with people as the late night flights prepare to depart, hot, fetid, and chaotic, would have had Beezelebub feeling right at home and Hieronymus Bosch reaching for his paint brush. In fact, I think I may actually have seen the Prince of Darkness himself there. He was manning a security line and he gave me such a thorough pat down that I think we are now engaged.

It would have been unbearable were it not for the staff of Singapore Airlines who met us, mere ticket holders albeit of premium tickets, at the door and whisked us through the crowds and ultimately onto the plane. And once on the plane, I knew exactly how Dante felt once he left Virgil behind and had reconnected after all those years with his old squeeze Beatrice. 

Suffice it to say that it does not appear that Singapore Airlines is even in the same business as American Airlines or United. From the meticulous, exceptionally well-appointed aircraft to a seemingly enthusiastic commitment to service, the airline that was one of the first of the businesses created by the Singapore government when it gained its independence in 1965, is achieving its strategic goal. It makes you want to travel through Singapore on every flight. Treat me like they did last night and I’d be happy to have a Singapore Airlines connection on my next flight to New York from DC. Especially when the only other option is travel on run down U.S. airlines whose flight attendants seem to have been trained under some footbridge somewhere by a particularly obnoxious family of trolls. 

Then you arrive at Singapore’s Changi Airport and you are powerfully reminded that the excellence of the airline is not a fluke. This is the best airport in the world, spacious, efficient, and attractive. As such, it is the perfect preparation for Singapore itself, almost certainly the best run political entity on the planet. Admittedly, the country, led from the start by the man who is now known as its Minister Mentor Lee Kwan Yew, has practiced what I would characterize as constrained form of democracy but few places have ever so compellingly made the case that what is trade away in terms of the occasional citation for spitting gum on the sidewalk is more than made up for in a society that is prosperous (Asia’s second richest), innovative, and safe.  

It is a government that has led the way by behaving in many ways like a corporation, taking ideas like competitiveness and strategic planning seriously. (At dinner tonight with a senior business executive who is one of the country’s great entrepreneurial success stories, she said, “In the beginning, in Singapore, the state was the entrepreneur.” And that was said with a genuine appreciation for all the state achieved in that role.) Even in the midst of a global recession it has been seen as not just responsive, but creatively responsive, promoting retraining of workers and focus on new growth industries. 

Part of the credit must go to its unique system of senior government official compensation. Ministers are paid via a formula: two thirds of the average of the eight highest salaries in six key professions (lawyer, accountant, banker, multinational executive, local manufacturer, and engineer). As a result in recent years the president and the prime minister have made in excess of $2 million a year in salary and other ministers in excess of $1 million. The result is that many of the best minds will be found in the government, zero corruption and terrific results. Want an example of the innovation? The president, prime minister, and ministers took an almost one-fifth pay cut this year because of the recession. What? Accountability among public officials? Real incentives? Imagine the loud “gak” you would get out of the U.S. government as they choked on those ideas. 

I could go on regarding the innovation here, and perhaps I will tomorrow, but while we’re on the subject of incentives, one last thought. Yesterday, I noticed that in exchange for taking those 17 Uighur terrorists, Palau was getting $200 million from the U.S. government. That’s $14 million or so per terrorist. And incentives being what they are, I immediately concluded that I want some of that terrorist action.

I will take 100 of them or however many they have left. 100 will fetch me $1.4 billion. With this I will spend maybe $200 million on a small island on which to house them (and my appropriately comfortable warden’s compound). Maybe I could buy Devil’s Island from the French space agency — which apparently currently controls it — for about that much. Then I would set aside another $200 million to care for the prisoners (at $50K per year for an average of 40 years each that would cover it). And I’ll pocket the billion as my fee. Secretary of Defense Gates or his representatives can contact me at FP to work out the details.

luxtonnerre/flickr

David Rothkopf is visiting professor at Columbia University's School of International and Public Affairs and visiting scholar at the Carnegie Endowment for International Peace. His latest book is The Great Questions of Tomorrow. He has been a longtime contributor to Foreign Policy and was CEO and editor of the FP Group from 2012 to May 2017. Twitter: @djrothkopf

More from Foreign Policy

An illustration shows George Kennan, the father of Cold War containment strategy.
An illustration shows George Kennan, the father of Cold War containment strategy.

Is Cold War Inevitable?

A new biography of George Kennan, the father of containment, raises questions about whether the old Cold War—and the emerging one with China—could have been avoided.

U.S. President Joe Biden speaks on the DISCLOSE Act.
U.S. President Joe Biden speaks on the DISCLOSE Act.

So You Want to Buy an Ambassadorship

The United States is the only Western government that routinely rewards mega-donors with top diplomatic posts.

Chinese President Xi jinping  toasts the guests during a banquet marking the 70th anniversary of the founding of the People's Republic of China on September 30, 2019 in Beijing, China.
Chinese President Xi jinping toasts the guests during a banquet marking the 70th anniversary of the founding of the People's Republic of China on September 30, 2019 in Beijing, China.

Can China Pull Off Its Charm Offensive?

Why Beijing’s foreign-policy reset will—or won’t—work out.

Turkish Defense Minister Hulusi Akar chairs a meeting in Ankara, Turkey on Nov. 21, 2022.
Turkish Defense Minister Hulusi Akar chairs a meeting in Ankara, Turkey on Nov. 21, 2022.

Turkey’s Problem Isn’t Sweden. It’s the United States.

Erdogan has focused on Stockholm’s stance toward Kurdish exile groups, but Ankara’s real demand is the end of U.S. support for Kurds in Syria.