Following management techniques first propounded by Marie ("Let them eat cake") Antoinette, the board of directors of German engineering firm Siemens AG (ADR) (NYSE:SI) voted 10 days ago to boost compensation for its top twelve executives by almost 30%. It proposed this increase at the same time that the company was negotiating a new collective bargaining agreement with its unionized workforce, 5,400 of whom have already been let go. Just to make negotiations interesting, this increase was awarded at the same time an additional 3,000 German jobs were put at risk due to the bankruptcy declaration of a Siemens subsidiary, BenQ Corporation in Taiwan, maker of mobile handsets.

Heinrich von Pierer, Siemens' board chairman, argued in face of criticism that the compensation of Siemens' executives is low compared to comparable German companies. Currently, the twleve executives split a bucket of money worth about $35 million U.S. Siemens stock has risen only modestly over the past several years. It increased 12.3% over the past three yaers, while the DAX (German equivalent to S&P 500) has climbed 82.3%.

The union boss in charge of negotiations with Siemens management stated: "Siemens wants management salaries like in the US, corporate taxes like in Cyprus, and employee salaries like in China." The backlash has been so severe in Germany that politicians on both sides of the aisle have united to condemn what they consider a flagrant example of corporate greed. Given the outrage, Siemens' board has temporarily halted the implementation of the pay increase, and will put the $6.3 million saved into employee re-training for fired workers, but seems tone deaf to the ongoing fallout.