Sunday, October 19, 2008

A Ring of the Bell

Market mavens say they don't ring a bell at market tops or bottoms. Do you believe that? I don't. 

Can't you point to past instances where a little voice inside your head said, "This is a decisive moment in a trend line"? 

Here was one for me: When Blackstone went public last year. I don't think I was alone in thinking that, "Yes, this is some kind of a market top." What beautiful timing for the Blackstone partners. This was actually a second dip at the timing well — how about their great timing in buying and then immediately selling off huge chunks of the Equity Office building portfolio earlier in the year? What would their fortunes look like now had they held onto that real estate for even a few additional months.

I don't begrudge them their timing. I begrudge not acting on that little voice inside my head.

I just listened in to what might well be a ring of the bell on executive pay. 

My pastor at Sunday services, for the first time ever from this pulpit, railed against the unjust compensation practices of corporate America. When a conservative minister turns from Biblical passages for his weekly sermon to lash out at the salaries and bonuses given to company leaders who have led the nation into deep doo doo ... well, I hear bells — and it's not the usual melodious ringing from the parish steeple. 

Forget Barney Frank. Forget 'say on pay.' Forget Hank Paulson and his TARP-induced strictures on exec pay. When the clergy of America become so incensed over the unfairness of board-approved pay for failure that they feel an obligation to use the pulpit to express outrage, then we've hit some kind of a trend point. 

I don't know if you'd describe it as a top or a bottom. A top in the inequities of pay practices. Or, a bottom in the sense that the craziness finally ends here with the stock market crash of 2008 and that there is no way but up for boards in crafting pay plans that truly reflect management's performance. 

But I say a bell has rung.