From Nicholas D. Kristof, an Op-Ed columnist at The New York Times, an amusing but saddening discussion of CEO pay:

Are you capable of taking a perfectly good 158-year-old company and turning it into dust? If so, then you may not be earning up to your full potential.

You should be raking it in like Richard Fuld, the longtime chief of Lehman Brothers. He took home nearly half-a-billion dollars in total compensation between 1993 and 2007.

Last year, Mr. Fuld earned about $45 million, according to the calculations of Equilar, an executive pay research company. That amounts to roughly $17,000 an hour to obliterate a firm. If you’re willing to drive a company into the ground for less, apply by calling Lehman Brothers at (212) 526-7000.

Oh, nevermind.

As Warren Buffett has said, “in judging whether corporate America is serious about reforming itself, C.E.O. pay remains the acid test.” It’s a test that corporate America is failing.

An excerpt from columnist Bill Virgin of the Seattle PI:

How do I get me one of those CEO jobs like at Washington Mutual, Fannie Mae and Freddie Mac where I get paid millions to run a company into the ground and millions more to leave?

The job of running an American corporation with billions in assets and thousands of employees is reserved for a select few with the necessary experience, expertise, vision and wisdom to handle such a grave responsibility -- or else, for those with the right connections and friends.

Who are these friends who are handing out the company's money like that?

The directors -- the people who are ultimately responsible for overseeing operation of the company and looking out for the interests of shareholders.

Damn fine job they're doing of it. Can't someone stop them? Who voted for those guys, anyway?

You did -- if you're a stockholder.

Me? I'd never vote for people who did foolish things like that. Why didn't we know about it?

You did -- if you read the proxy statement that spells out in numbing detail the compensation package -- salary, bonuses, options, retirement plan, perks -- for people such as now-deposed WaMu CEO Kerry Killinger, as well as what they get if they're fired, they leave or the company gets sold. Not that anyone reads that stuff when the company is doing well -- which, lately, it hasn't been.

Now that Fannie Mae and Freddie Mac are under the control of The Federal Housing Finance Agency (FHFA), payment of as much as $24 million in severance to their fired CEOs is being stopped.

Senators had urged FHFA to eliminate bonuses for former Fannie CEO Daniel Mudd and Freddie CEO Richard Syron, citing their "failed leadership," and it looks like the political pressure combined with simple common sense got through to FHFA Director James Lockhart.

"We find it way out of line that these two executives will be rewarded with millions of dollars in bonus compensation at a time when taxpayer dollars may have to be deployed to cover any financial losses caused by errors in management," Democratic Senators Charles Schumer and Jack Reed wrote.

BusinessWeek features an article on deceased management consultant Peter Drucker's view of executive pay:

Drucker's stance on the issue, articulated consistently over many years, was controversial. But it was rooted in his belief that the best leaders are those who understand that what comes with their authority is the weight of responsibility, not "the mantle of privilege," as writer and editor Thomas Stewart described Drucker's view. It's their job "to do what is right for the enterprise—not for shareholders alone, and certainly not for themselves alone."

What Drucker thought was more appropriate was a ratio around 25-to-1 (as he suggested in a 1977 article) or 20-to-1 (as he expressed in a 1984 essay and several times thereafter). Widen the pay gap much beyond that, Drucker asserted, and it makes it difficult to foster the kind of teamwork that most businesses require to succeed.

"I'm not talking about the bitter feelings of the people on the plant floor," Drucker told a reporter in 2004. "They're convinced that their bosses are crooks anyway. It's the midlevel management that is incredibly disillusioned" by CEO compensation that seems to have no bounds.

This is especially true, Drucker explained in an earlier interview, when CEOs pocket huge sums while laying off workers. That kind of action, he said, is "morally unforgivable."

With some news coverage painting the current situation as a financial apocalypse, you might expect that CEO pay might temporarily cool-off given it is often pointed to as partially responsible for our problems. Fear not, CEO pay fans, things seem to be progressing as usual.

Washington Mutual Inc.'s (NYSE: WM) incoming CEO Alan Fishman is effectively guaranteed $12.65 million next year in addition to his $7.5 million signing bonus. Also, in case things go south for Fishman before the end of his first year even, he is guaranteed a golden parachute of $10.5 million for "termination without cause."

Turns out it is a bad time to hold WaMu stock, but a good time to be WaMu CEO.

A new paper, "Beyond the Boardroom: Considering CEO Pay in a Broader Context," argues that excessive CEO pay is bad for a company (not surprising), but the authors also give suggestions for aligning pay and performance throughout company ranks:

• As many employees as possible should be part of an organization-wide, pay-for-performance model; merit increases should allow for significant differentiation between employee and company performance.
• The organization's bonus plan generally should use similar metrics for both employees and the CEO; the funding percentages should be somewhat alike.
• Stock incentive plans should stem from board-level decisions over who is eligible, but participation should be limited to top performers.
• Limits should be placed on special awards and perquisites not linked to performance.

Expect Fannie and Freddie executive compensation to become even more of a hot-button issue as more politicians take note of the contradictions of huge pay followed by a huge government bailout. From Reuters:

Democrats on Tuesday criticized the multimillion-dollar pay packages awarded to the former chief executives of Fannie Mae and Freddie Mac at a time when taxpayers could foot a massive bill for the companies' bailout.

In a joint letter to Fannie and Freddie's regulator, Senators Charles Schumer of New York and Jack Reed of Rhode Island said the combined pay and bonus packages of about $24 million should be revised.

"We find it way out of line," they said in the letter, saying the severance pay for former Fannie Mae CEO Daniel Mudd and former Freddie Mac CEO Richard Syron should be questioned especially if any financial losses could have been caused by errors in management.

The U.S. Treasury Department over the weekend seized control of the two government-sponsored entities, which together back about half the country's $12 trillion in home mortgages.

A letter to the editor from Larry Checco running in today's The Washington Post:

As the federal government moves to rescue Fannie Mae and Freddie Mac ["U.S. Seizes Control of Mortgage Giants," front page, Sept. 8], perhaps this is the perfect time to send a clear signal to the rest of the financial services industry that executive compensation packages need to be more in line with executive performance.

For years, while this whole mortgage crisis was festering, the top executives of Fannie Mae and Freddie Mac were taking home multimillion-dollar salaries and bonuses. Oh, sure, they suffered some. For example, Fannie Mae CEO Daniel H. Mudd took a 15 percent pay cut in 2007 and took home a measly $14.2 million in total compensation, a pittance in comparison with what some of his predecessors received. Meanwhile, his company's stockholders watched in horror as the value of their shares eventually decreased by 90 percent.

So, I'd like Treasury Secretary Henry M. Paulson Jr. to start setting the example for every industry and organization through decisions on compensation for Fannie's and Freddie's new top executives.