Friday, April 10, 2009

Stress Tests For Executives

Is Geithner planning a stress test for executives?

Rick Wagoner, the former CEO of General Motors was, in essence, fired by the government. And last week's announcement that more top executives may have to go ... seemingly at the discretion of Tim Geithner ... was enough to make heads in the C-suite turn like a page out of the Exorcist.

I have nothing against Geithner ... but last I looked, his title is Secretary of the Treasury and he's been a government bureaucrat his entire career. Having formerly run one of the country's largest federally-funded career development programs, I know something about government-controlled enterprises.

At best, they're cumbersome and at worst, they're incompetent.

Performance metrics modeled on Sudoku

If the administration follows through on its threat to replace more CEO's, it's not much of a stretch to envision them replacing the rest of a company's executives, officers and board members. And, if my experience is any gauge, this will be accomplished by utilizing numbers that may not even remotely resemble any valid criteria.

I'm sure they mean well, but how can one expect government officials to understand and manage the intricacies of businesses in which they've never participated?

I'd rather have Jamie Dimon than Barney Frank calling the shots at JP Morgan.

Be careful what you wish for

However, the public outcry of "off with their heads" has taken hold and executives are under siege. By refusing to take back TARP funds the government has signaled that it stands ready to dictate to - and who is in - the C-suite.

In a recent survey, only 53% of the country asserted that capitalism is superior to socialism.

I guess our new business leaders will be Nancy Pelosi, Christopher Dodd ... maybe Al Franken.

Unfortunately, they won't be subject to stress tests, but they will be capable of subjecting American business to stress.

No comments:

_______________________________________________________________________


_______________________________________________________________________

Executive Tribune* is an electronic publication of SIMON GROUP LTD.
80 Business Park Drive, Armonk New York 10504.
Email: tribune@simongroupltd.com
Tel: 914.273.2500

Executive Tribune* is a Registered Trademark.

Copyright 2008, 2009 Executive Tribune. All rights reserved.

All original content is the sole and exclusive property of the author(s)
and is prohibited from being reproduced or used, in part or whole and
in any manner or for any purpose, without the express written
permission of the author(s).
_______________________________________________________________________