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Rewarding Incompetence

CBS News reports on the “business” of government: FDA Execs Reap Lavish Bonuses

(CBS) It’s been a bad year for the Food and Drug Administration’s top brass. The agency’s been accused by Congress of mishandling health scares linked to pet food, Heparin, Avandia and now, tomatoes, CBS News correspondent Nancy Cordes reports.

But based on their bonuses, you would think it was a banner year at the FDA.

Rep. Bart Stupak, D-Mich., says he was stunned to learn that 28 senior FDA executives took in a combined $1 million in bonuses last year, pushing their pay above that of members of Congress, federal judges – and even some cabinet secretaries.

“They’ve done such a miserable job these last two years, I think they should leave! Not get bonuses of $40,000 [to] $50,000!” Stupak said. “Good grief.”

Not all FDA employees hit the jackpot. The biggest bonus among the rank-and-file went to the “Inspector of the Year.” Her take? A mere $2,500.

Just like the corporate world, in the Hedgemony the executives get bonuses regardless of actual performance.  The Food and Drug Administration has been stumbling from disaster to disaster, and the management team is being paid more money than Cabinet Secretaries.

I’m sure the farmers who were ruined by the salmonella problem which doesn’t seem to actually be related to tomatoes will be thrilled to know that the people that pointed the finger at them received bonuses larger than the income of most family farms.


1 mapaghimagsik { 07.12.08 at 11:15 am }

This is a great topic, and one that I bring up when I have to deal with people whining about diversity enforcement policies or laws. As much as we would like to think the US system is a meritocracy, its not. And the “its not what you know its who you know” phrase gets lost when people complain about hiring practices that are “not completely capitalist”.

Its amazing how many executives don’t do their jobs, and still get multi-million salaries. This doesn’t seem to freak too many people out. However, if your diversity department starts to encourage you to look harder for diverse candidates, its an outrage.

2 Bryan { 07.12.08 at 1:15 pm }

In corporate Japan if a company has problems the first thing that happens is that executive compensation is cut 10%. The last thing that happens is firing workers.

In between they look at the problem and try to discover the reason and fix it.

In the US they fire workers, increase executive compensation and continue to function in the same fashion with a reduced capacity.

The justification is that you have to have high salaries to attract quality people, except the result really is, paying incompetent people high salaries.

The most destructive myth in US business is that managers don’t have to understand the business they manage. Looking at what happened to Apple when they hire an executive from Pepsi to run the corporation. He tried to sell computers like softdrinks. You have to understand your market, not the stock market to have a successful company. That fact is lost on CEOs and boards of directors.

3 Steve Bates { 07.13.08 at 2:26 pm }

“The most destructive myth in US business is that managers don’t have to understand the business they manage.”

Isn’t that the truth! And haven’t we all worked for such managers, and watched the business suffer as a result. One of the best managers I ever worked for was a former IT professional who insisted on keeping his hand in on at least one byte-pushing part of the job at any given time. He was good at that, too, and it gave him amazingly sound perspective on the development process.

“He tried to sell computers like softdrinks.”

Well, why not… in the old days, Apple was a lot like Pepsi: much sugar, much fizz, and no nutritional value. <grin_duck_run />

4 Bryan { 07.13.08 at 3:34 pm }

I don’t know how you can manage a system you don’t understand. If you don’t know what people do, how do you know if they are doing it right?

Wall Street and its analysts are only concerned with the stock price, not the health of the company. They assume that if the stock price is rising the company is successful, and the two are not that closely linked anymore. In the days of long term investing that view had some value, but in the casino that Wall Street has become, perception is more important than reality.

Under the Pepsi guy Apple became a product of marketing, not technology.