Government has no business determining what anyone is paid. That’s the job of a good board of directors.

In the wake of the financial crisis there has been a move around the world to curb executive pay. In the U.S. the rhetoric from our politicians has fueled this misdirected initiative.

People who make several million dollars a year or receive a large bonus to leave a job where they screwed up are easy and popular targets. Just last week in Switzerland voters approved a law that prohibits sign on bonuses and severance packages. This is both short-sighted and dumb. Such moves tend to filter down to lower level employees hurting their compensation and inhibiting flexibility in job seeking. But apparently the Swiss are not done, Bloomberg is reporting that the recent vote will put wind in the sails of two more referendum initiatives. One would set a legal minimum wage of 4,000 Swiss francs ($4,218) a month; the other is the so-called 1:12 initiative, which would restrict the highest salary in a Swiss company to no more than 12 times the lowest one. So, if a big international Swiss company somewhere in its organization had a low level employee doing a minimal skill job for $25,000 a year the CEO could not be paid more $300,000 a year. Brilliant; do you want the job? Or perhaps we should pay the mail clerk $100,000 a year. Yikes, the CEO of UBS could end up making less than Nancy Pelosi … can you say travesty of justice?

Let’s face it, some executives are overpaid (some politicians too), but compensation is a concern for the board of directors and shareholders. If, as was the case for banks in the recent crisis, those leading an organization put it in jeopardy or require government bailout they should take responsibility and suffer the consequences … they get fired just as a lower level person would if they screwed up and cost an organization millions of dollars. That’s the job of the board of directors.

Hiring bonuses at nearly all levels are essential in attracting new employees to an organization, they help offset lost pay, and lost vacation when leaving a job and help offset some of the risk of taking a new job. Severance pay too is an important compensation tool, not to pay someone who is fired, but to protect individuals who are laid off or lose a job as the result of a merger, sale, etc. What executive will be motivated to seek a merger or other organizational change that is best for a company and its shareholders if he or she knows the result will be them losing their job with no compensation?

The value of bonuses is less clear, but nevertheless the business of the board of directors, not government. The problem with a bonus is that it motivates people, sometimes to reach the bonus goals regardless of right or wrong and sometimes jeopardizing more important corporate goals. Assessing goal accomplishment is a difficult process fraught with manipulation and game-playing. This does not mean total compensation should be less, but rather that performance should be assessed after a period of time based on the overall results for the organization without setting individual goals.

And now let’s look at the board of directors where we place a great deal of responsibility. It’s a tough job and one that requires a great deal of skill, expertise, commitment, time and effort. To me that means that board members must be able to focus on the job at hand and have the time to do their job. However, all too often board members are spread very thin which brings into question their ability to devote the required time to do this important job (for which they are paid well).

Look at this example. This is a highly skilled person, an accomplished person with outstanding credentials, but how can one person do all this with the commitment required of the jobs? Perhaps some uniform criteria is desirable when selecting members of a board of directors.

In addition to a full-time job as president of a prestigious university, XXX serves as a director of IBM Corporation, FedEx Corporation, Marathon Oil Corporation, Medtronic Inc., and Public Service Enterprise Group Incorporated

XXX serves on the Board of Regents of the Smithsonian Institution, is a Member of the Board of the Council on Foreign Relations, and is a Trustee of the Brookings Institution. XXX also serves as the University Vice Chairman of the U.S. Council on Competitiveness.

XXX serves on the U.S. Comptroller-General’s Advisory Committee for the Government Accountability Office (GAO).

In April, 2009, U.S. President Barack Obama appointed XXX to serve on the President’s Council of Advisors on Science and Technology. PCAST is an advisory group of the nation’s leading scientists and engineers who advise the President and Vice President and formulate policy in the many areas where understanding of science, technology, and innovation is key to strengthening the economy and forming policy that works for the American people.

XXX is co-chair of the President’s Innovation and Technology Advisory Committee (PITAC), part of the PCAST. Through PCAST, PITAC advises the President on matters involving science, technology, and innovation policy.

So, where is the real problem, assuming there is a real problem? Surely any problem in executive compensation is not something to be solved by voters or politicians. If voters are concerned what companies spend, maybe they should vote to limit the amount a company can spend on its employees benefits.