Enron ain't the problem.

• Author: Sosnoff, Martin T.
• Position: Compensation Committee - Excessive executive compensation

I always thought corporate scams originated in Beverly Hills, like Equity Funding's creative computer inputs, but steamy Houston takes the palm. How much longer are we going to kick around Enron, Ken Lay, and Arthur Andersen for their debasement of sound accounting principles? Myopically, Congress, the regulators, the public, even Wall Street so far have missed the big picture stuff.

The unremarked gut issue today is that over the past decade there was a landslide transfer of wealth from public shareholders to corporate managers.

Enron was just the tip of the iceberg ready to happen. Process the salaries, all the $10 million annual bonuses, the issuance of zero-cost stock and tens of million of options to top management. It adds up to hundreds of billions. It wasn't just high-tech properties, but financial services and media largesse that created a new crop of billionaires ranging from Jack Welch to Michael Eisner and Sandy Weill.

High-octane managers like Weill and Eisner did not go unnoticed by other corporate managers. Options programs covering 10% to 15% of the outstanding capitalization of public companies became the norm, everywhere: Merrill Lynch, Morgan Stanley, Time Warner...you name it. They have the full package! Apple Computer's board gave Steve Jobs a Gulfstream V for masterminding the turnaround.

I know the rejoinder -- "Yes, but these headmen created tens of billions of shareholder value during their reign." Granted, but they took no financial risk and tapped other people's equity money. Professional athletes command $10 million paychecks, but Derek Jeter won't end up owning the New York Yankees; Derek goes to the Hall of Fame in Cooperstown, N.Y., in his sunset years.

The big issue of the transfer of hundreds of billions in wealth from shareholders to corporate managers is percolating but not yet boiling over. Enron's management has done our country a big favor. They speculated with their shareholders' and employees' capital, enriched themselves and then lost it all -- tens of billions in credit instruments and $70 billion in equity market value. The public's awareness of this scam hopefully will end the passivity of audit committee board members and put a lid on compensation committee handouts.

Normally, billionaire status is reserved for entrepreneurial success, as in Bill Gates, Michael Dell, Sumner Redstone, and John Kluge. Gates doesn't need options in Microsoft Sadly, Michael Dell, who owns 12% of Dell Computer...