Rich Lowry

But there's nothing truly wasteful about executive compensation. It takes extraordinary talent to run a major public company. CEOs in every industry make lots of money, and they deserve it.

If it's hard for all large firms to find skilled CEOs, it's even harder for the large airlines. Their CEOs have to be willing to work at companies perpetually on the verge of bankruptcy. Indeed, the stock packages that inflate the reported compensation figures for airline executives might be worthless by the time they vest. That's not because money is thrown away on salaries, but partly because of unavoidable economic factors -- fuel prices, terrorism worries -- and partly because the major airlines are saddled with inflexible arrangements with pilot, mechanic and flight-attendant unions.

Jim Parker, the CEO of the profitable Southwest Airlines, gets paid less than the CEOs of the major airlines. But Southwest has none of the inherited union problems of the other airlines, so his job is easier. For him to leave Southwest to work instead at, say, American, he would: a) have to be crazy; b) have to get paid more.

In limiting executive pay, Congress is only making life for the airlines marginally harder by limiting their ability to keep, and attract, talent. Typical perversity from the people who make $155,000 a year telling other people how much they should make a year.

Rich Lowry

Rich Lowry is author of Legacy: Paying the Price for the Clinton Years .
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