Lee Iacocca Understood Bailouts

The web is rife with commentary about President Obama's $500,000 cap on pay for top executives of companies getting the biggest chunks of TARP money.

Perhaps the most enlightening thoughts come from Nell Minow, an expert on corporate governance. While today's government bailouts certainly seem unprecedented, Minow digs up the $1.5 billion Chrysler bailout of 1979 to great effect.

From CNN.com:

Lee Iacocca established instant confidence and credibility by taking $1 a year and escalated stock options. He showed that he was willing to bet on himself and the company, and that, more than any other statement he could make, made everyone -- employees, investors, government and taxpayers -- willing to bet on him, too.

First, the government got paid back and got a good return (though it should have been higher) and then the shareholders and then Iacocca, who made as much as any titan could ask for.

It would seem that today's Wall Street automatic-bonus culture--driven, it seems, by the almighty goal of "talent retention"--has abandoned something a bit more important--public opinion.

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