Isn't this rich? Bill Gates, the richest man in the whole country, thinks Wall Streeters are paid too much.
The compensation problem is a very interesting problem. I do think compensation is often too high, but it's a very tough problem to solve.
Gates blamed a 1993 federal law capping executive salaries at $1 million--"a bad milestone"--which he said wound up backfiring, encouraging huge bonuses and stock option awards. He doesn't like that, he said during a discussion on philanthropy in New York yesterday, but he's wary of doing anything about it, worrying that, like the '93 law, it will just make things worse.
The cap on salaries turned out to be one of the greatest causes to increase compensation.
Indeed, it seems that Gates touched on just about everything except giving away his $50 billion fortune at yesterday's forum. He blamed too much optimism and ebullience for the financial crisis and said he was "worried" about the federal government owning big stakes in financial companies.
It's an unnatural situation when the government owns a lot of a private company. Unfortunately, there is a view that that should exist for a long term. There's some devaluation of what that asset would have been worth if it hadn't had to go through that kind of management structure. It's unavoidable.
Like those annoying commercials for Windows 7.
Microsoft's Bill Gates Says Wall Street Pay Is 'Often Too High' [Bloomberg]