CNBC's Deutsch Doesn’t Want 'Idiots' on Wall Street Making $10 Million a Year; Calls for Education System to 'Breed' Executives
Want a little populist outrage? There's nothing like hearing it from a multi-millionaire advertising mogul with a spot on CNBC.
Donny Deutsch, the host of "The Big Idea," a show the network has shelved, explained to viewers on the March 25 broadcast of "CNBC Reports" he wants measures put in place to keep prevent people he regards as "idiots" from making $10 million a year.
"The issue is even now, with the new asset program, basically if it works, the taxpayer's taking up all the risk," Deutsch said. "God forbid it doesn't work, taxpayers are really going to take it on the chin. And let's say we get it right and the banks are lending again and everything is fine again - what is now put in place on Wall Street to make sure idiots are not getting paid $10 million a year?"
In December 2000, Ad Age reported Donny Deutsch signed off on a deal that sold his advertising agency with clients including Domino's Pizza, Mitsubishi Motors of America and Snapple to Interpublic Group. The report estimated Interpublic spent $200 million-$250 million in stock for the agency, which stock Deutsch had an 87-percent stake in according to New York magazine.
"That's my fundamental problem," Deutsch said. "There is such an out-of-whack compensation structure, entitlement structure."
Deutsch's co-host, Melissa Lee explained that if there was such a backlash against the compensation structure, it would be solved by the shareholders. Traditionally, executive compensation and salaries of every executive employee are decided by the company owners, or the shareholders, through the board of directors and the management team.
"If there is such a populist surge Donny, then we as shareholders, the collective ‘we' will vote against some of these schemes," Lee said. "We do have power."
Deutsch wasn't convinced, however his other co-host CNBC's Jeff Macke, founder and president of Macke Asset Management said the public shouldn't expect the U.S. Congress to solve the compensation crisis based on their recent performance.
"I'm sorry Donny, but were you spectacularly impressed with the level of questions and answers that we heard from the House and the Senate over the past couple of weeks?" Macke said.
Deutsch's answer had a touch of Plato's "The Republic" in it, calling for an education system that would "breed" executives and that would solve what he perceived as a lack of a value system.
"It's not going to come from government guys," Deutsch said. "That's my point - it's got to come from our education system. We got to start breeding executives. No guys, this is not a fairy tale - we're out-of-whack as a country. There's no value system. There's no sense of what's right and wrong. It is just what I can get, how I can wet beak, how much money I can take without any accountability. We've become a gluttonous society."
Macke retorted by pointing out politicians were pandering to the gluttonous society."And how many votes I can get by pandering to that society," Macke replied.