Yesterday, The Hill posted an article citing the response of Karen Ignagni, president and CEO of America's Health Insurance Plans to a report released by the Obama Administration listing the salaries of the top executives of health insurance companies. Ms. Ignagni points out that:
"This issue of executive compensation is a very important question for boards of directors in every stakeholder community and every part of our economy. And in fact, we are having those discussions. Boards of directors are increasingly through proxy kinds of initiatives in their own discussions are increasingly demonstrating that the compensation is aligned with productivity and performance. ... I think this is a question that ought to be raised across the economy."
I really do think that in a stockholder-held corporation it is not the government's business what anyone is paid--that is the stockholders' decision--not the governments. Ms. Ignangni also pointed out that the profit margin in the health insurance industry is in the two to three percent range, while other areas of healthcare have profit margins of 15 to 25 percent.
The charge of overpaying executives in the health insurance industry is not really related to anything except the President's desire to pass a very unpopular healthcare reform bill. The more he can shine his spotlight on the 'evil insurance companies', the easier it will be to convince the American people that we have to pass health insurance reform now. Fortunately, I think most Americans are paying attention to what is going on in Washington right now and will not fall for the sleight of hand that is being attempted.
Another aspect of the White House releasing executive pay scales in an industry is the attack on success that is being fostered by the Obama Administration. Senior corporate executives make a lot of money. They also shoulder a lot of responsibility, and most of them probably don't remember ever working an eight-hour day. If you take away the incentive to be successful, fewer people will be willing to put out the effort to succeed. That is how to ruin a country and remove it from its position as a world economic leader. We also need to remember that we are in danger of reaching a point where less than 50 percent of Americans pay income taxes. As fewer people pay income taxes, there are fewer people who care when those taxes are raised, and generally speaking, many of the people who are not paying income taxes are receiving money from the government. That is situation will eventually lead to a financially bankrupt country.
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