Obama reining in CEO pay
President Obama is backing up his outrage over Wall Street pay with action today, announcing plans to put a $500,000-a-year limit on the salaries of CEOs whose companies dip into the government's financial rescue fund.
Firms that want to pay executives more than $500,000 would have to use stock that could not be sold until the firms pay back the government.
"In order to restore trust, we’ve got to make certain that taxpayer funds are not subsidizing excessive compensation packages on Wall Street," Obama said.
"We all need to take responsibility. This includes executives at major financial firms who turned to the American people, hat in hand, when they were in trouble, even as they paid themselves their customary lavish bonuses. As I said last week, that’s the height of irresponsibility. That’s shameful. And that’s exactly the kind of disregard of the costs and consequences of their actions that brought about this crisis: a culture of narrow self-interest and short-term gain at the expense of everything else.
"This is America. We don’t disparage wealth. We don’t begrudge anybody for achieving success. And we certainly believe that success should be rewarded. But what gets people upset – and rightfully so – are executives being rewarded for failure. Especially when those rewards are subsidized by US taxpayers...
"For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis isn't just bad taste, it’s a bad strategy and I will not tolerate it as president. We’re going to be demanding some restraint in exchange for federal aid – so that when firms seek new federal dollars, we won’t find them up to the same old tricks."
Obama's full prepared remarks are below. The new pay regulations, as outlined by the White House, are also below.
Obama last week lambasted as the "height of irresponsibility" and "shameful" the $18 billion-plus in bonuses that Wall Street firms paid last year, one of their worst in history that forced them to seek government help.
Obama, back when he was a US senator running for the nation's highest office, voted for the $700 billion financial bailout. But now, he agrees with many that the first $350 billion spent -- mostly by investing to prop up banks -- has not done the job to free up credit.
Geithner plans to unveil next week a new framework for spending the remaining money.
As the Obama administration retools the plan, a watchdog group reported today that firms receiving the bailout money have reaped a huge return on investment.
The Center for Responsive Politics said that the finance and auto companies spent a total of $114.2 million on lobbying in the last year and in campaign contributions for the 2008 election. The companies received have received $295.2 billion so far from the rescue plan, "an extraordinary return of 258,449 percent."
"Even in the best economic times, you won't find an investment with a greater payoff than what these companies have been getting," Sheila Krumholz, the center's executive director, said in a statement. "Some of the companies and industries that have received payments may now consider their contributions and lobbying to be the smartest investments they've made in years."
Obama's remarks:
Thank you, Tim, for your hard work on this issue and on our economic recovery.
The economic crisis we face is unlike any we’ve seen in our lifetime. It’s a crisis of falling confidence and rising debt. Of widely distributed risk and narrowly concentrated reward. A crisis written in the fine print of sub-prime mortgages, on the ledger lines of once-mighty financial institutions, and on the pink slips that have upended lives and cost the economy 2.6 million jobs last year alone.
We know that even if we do everything we should, this crisis was years in the making, and it will take more than weeks or months to turn things around.
But make no mistake:
A failure to act, and act now, will turn crisis into a catastrophe and guarantee a longer recession, a less robust recovery, and a more uncertain future. Millions more jobs will be lost. More businesses will be shuttered. More dreams will be deferred.
That’s why I feel such a sense of urgency about the Economic Recovery and Reinvestment Plan that is before Congress today. With it, we can save or create more than three million jobs, doing things that will strengthen our country for generations to come. It is not merely a prescription for short-term spending – it’s a strategy for long-term economic growth in areas like renewable energy, health care, and education.
Now, in the past few days I’ve heard criticisms of this plan that echo the very same failed theories that helped lead us into this crisis – the notion that tax cuts alone will solve all our problems; that we can ignore fundamental challenges like energy independence and the high cost of health care and still expect our economy and our country to thrive.
I reject that theory, and so did the American people when they went to the polls in November and voted resoundingly for change. So I urge members of Congress to act without delay. No plan is perfect, and we should work to make it stronger. But let’s not make the perfect the enemy of the essential. Let’s show people all over our country who are looking for leadership in this difficult time that we are equal to the task.
At the same time, we know that this Recovery and Reinvestment plan is only the first part of what we need to do to restore prosperity and secure our future. We also need a strong and viable financial system to keep credit flowing to businesses and families alike. My administration will do what it takes to restore our financial system; our recovery depends upon it. And so next week, Secretary Geithner will release a new strategy to get credit moving again – a strategy that will reflect the lessons of past mistakes while laying a foundation for the future.
But in order to restore our financial system, we’ve got to restore trust. And in order to restore trust, we’ve got to make certain that taxpayer funds are not subsidizing excessive compensation packages on Wall Street.
We all need to take responsibility. And this includes executives at major financial firms who turned to the American people, hat in hand, when they were in trouble, even as they paid themselves their customary lavish bonuses. As I said last week, that’s the height of irresponsibility. That’s shameful. And that’s exactly the kind of disregard for the costs and consequences of their actions that brought about this crisis: a culture of narrow self-interest and short-term gain at the expense of everything else.
This is America. We don’t disparage wealth. We don’t begrudge anybody for achieving success. And we believe that success should be rewarded. But what gets people upset – and rightfully so – are executives being rewarded for failure. Especially when those rewards are subsidized by U.S. taxpayers.
For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis is not only in bad taste – it’s a bad strategy – and I will not tolerate it as President. We’re going to be demanding some restraint in exchange for federal aid – so that when firms seek new federal dollars, we won’t find them up to the same old tricks.
As part of the reforms we are announcing today, top executives at firms receiving extraordinary help from U.S. taxpayers will have their compensation capped at $500,000 – a fraction of the salaries that have been reported recently. And if these executives receive any additional compensation, it will come in the form of stock that can’t be paid up until taxpayers are paid back for their assistance.
Companies receiving federal aid are going to have to disclose publicly all the perks and luxuries bestowed upon senior executives and provide an explanation to the taxpayers and to shareholders as to why these expenses are justified. And we’re putting a stop to these kinds of massive severance packages we’ve all read about with disgust; we’re taking the air out of the golden parachute.
We’re asking these firms to take responsibility, to recognize the nature of this crisis and their role in it. We believe that what we’ve laid out should be viewed as fair and embraced as basic common sense.
Finally, these guidelines we’re putting in place are only the beginning of a long-term effort. We’re going to examine the ways in which the means and manner of executive compensation have contributed to a reckless culture and quarter-by-quarter mentality that in turn have wrought havoc in our financial system. We’re going to be taking a look at broader reforms so that executives are compensated for sound risk management and rewarded for growth measured over years, not just days or weeks.
We’ve all got to pull together and take our share of responsibility. That’s true here in Washington. That’s true on Wall Street. The American people are carrying a huge burden as a result of this economic crisis: bearing the brunt of its effects as well as the costs of extraordinary measures we’re taking to address it. The American people expect and demand that we pursue policies that reflect the reality of this crisis – and that will prevent these kinds of crises in the future.
Thank you.
The specifics on the restrictions:
Today, the Treasury Department is issuing a new set of guidelines on executive pay for financial institutions that are receiving government assistance to address our current financial crisis. These measures are designed to ensure that public funds are directed only toward the public interest in strengthening our economy by stabilizing our financial system and not toward inappropriate private gain. The measures announced today are designed to ensure that the compensation of top executives in the financial community is closely aligned not only with the interests of shareholders and financial institutions, but with the taxpayers providing assistance to those companies.
The Treasury guidelines on executive pay seek to strike the correct balance between the need for strict monitoring and accountability on executive pay and the need for financial institutions to fully function and attract the talent pool that will maximize the chances of financial recovery and taxpayers being paid back on their investments. The proposals below, such as emphasizing restricted stock that vests as the government is repaid with interest, seek to strike exactly that balance.
The guidelines distinguish between banks participating in any new generally available capital access program and banks needing “exceptional assistance.” Generally available programs have the same terms for all recipients, with limits on the amount each institution may receive and specified returns for taxpayers. The goal of these programs is to help ensure the financial system as a whole can provide the credit necessary for recovery, including providing capital to smaller community banks that play a critical role in lending to small businesses, families and others. The previously announced Capital Purchase Program is an example of a generally available capital access program.
If a firm needs more assistance than is allowed under a widely available standard program, then that is exceptional assistance. Banks falling under the “exceptional assistance” standard have bank-specific negotiated agreements with Treasury. Examples include AIG, and the Bank of America and Citi transactions under the Targeted Investment Program.
As part of President Obama’s efforts to promote systemic regulatory reform, the standards today mark the beginning of a long-term effort to examine both the degree that executive compensation structures at financial institutions contributed to our current financial crisis and how corporate governance and compensation rules can be reformed to better promote long-term value and growth for shareholders, companies, workers and the economy at large and to prevent such financial crises from occurring again.
I. COMPLIANCE AND CERTIFICATION:
All Companies Receiving Government Assistance Must Ensure Compliance with Executive Compensation Provisions: The chief executive officers of all companies that have to this point received or do receive any form of government assistance must provide certification that the companies have strictly complied with statutory, Treasury, and contractual executive compensation restrictions. Chief executive officers must re-certify compliance with these restrictions on an annual basis. In addition, the compensation committees of all companies receiving government assistance must provide an explanation of how their senior executive compensation arrangements do not encourage excessive and unnecessary risk-taking.
II. ENHANCED CONDITIONS ON EXECUTIVE COMPENSATION GOING FORWARD:
A. Companies Receiving Exceptional Financial Recovery Assistance:
· Limit Senior Executives to $500,000 in Total Annual Compensation – Other than Restricted Stock: Current programs providing exceptional assistance to financial institutions forbid recipients of government funds from taking a tax deduction for senior executive compensation above $500,000. Today’s guidance takes this restriction further by limiting the total amount of compensation to no more than $500,000 for these senior executives except for restricted stock awards.
· Any Additional Pay for Senior Executives Must Be in Restricted Stock that Vests When the Government Has Been Repaid with Interest: Any pay to a senior executive of a company receiving exceptional assistance beyond $500,000 must be made in restricted stock or other similar long-term incentive arrangements. The senior executive receiving such restricted stock will only be able to cash in either after the government has been repaid – including the contractual dividend payments that ensure taxpayers are compensated for the time value of their money – or after a specified period according to conditions that consider among other factors the degree a company has satisfied repayment obligations, protected taxpayer interests or met lending and stability standards. Such a restricted stock strategy will help assure that senior executives of companies receiving exceptional assistance have incentives aligned with both the long-term interests of shareholders as well as minimizing the costs to taxpayers.
· Executive Compensation Structure and Strategy Must be Fully Disclosed and Subject to a “Say on Pay” Shareholder Resolution: The senior executive compensation structure and the rationale for how compensation is tied to sound risk management must be submitted to a non-binding shareholder resolution. There are no “Say on Pay” provisions in the existing programs.
· Require Provisions to Clawback Bonuses for Top Executives Engaging in Deceptive Practices: Under the existing programs providing exceptional assistance, only the top five senior executives were subject to a clawback provision. Going forward, a company receiving exceptional assistance must have in place provisions to claw back bonuses and incentive compensation from any of the next twenty senior executives if they are found to have knowingly engaged in providing inaccurate information relating to financial statements or performance metrics used to calculate their own incentive pay.
· Increase Ban on Golden Parachutes for Senior Executives: The existing programs providing exceptional assistance to financial institutions prohibited the top five senior executives from receiving any golden parachute payment upon severance from employment, a ban that will be expanded to include the top ten senior executives. In addition, and at a minimum, the next twenty-five executives will be prohibited from receiving any golden parachute payment greater than one year’s compensation upon severance from employment.
· Require Board of Directors’ Adoption of Company Policy Relating to Approval of Luxury Expenditures: The boards of directors of companies receiving exceptional assistance from the government must adopt a company-wide policy on any expenditures related to aviation services, office and facility renovations, entertainment and holiday parties, and conferences and events. This policy is not intended to cover reasonable expenditures for sales conferences, staff development, reasonable performance incentives and other measures tied to a company’s normal business operations. These new rules go beyond current guidelines, and would require certification by chief executive officers for expenditures that could be viewed as excessive or luxury items. Companies should also now post the text of the expenditures policy on their web sites.
B. Financial Institutions Participating in Generally Available Capital Access Programs:
The Treasury intends to issue proposed guidance subject to public comment on the following executive compensation requirements relating to future generally available capital access programs.
· Limit Senior Executives to $500,000 in Total Annual Compensation Plus Restricted Stock – Unless Waived with Full Public Disclosure and Shareholder Vote: Companies that participate in generally available capital access programs may waive the $500,000 plus restricted stock rule only by disclosure of their compensation and, if requested, a non-binding “say on pay” shareholder resolution. All firms participating in a future capital access program must review and disclose the reasons that compensation arrangements of both the senior executives and other employees do not encourage excessive and unnecessary risk taking. Under the current Capital Purchase Program, the companies were only required to review and certify that the top five executives’ compensation arrangements did not encourage excessive and unnecessary risk-taking.
· Require Provisions to Clawback Bonuses for Top Executives Engaging in Deceptive Practices: The same clawback provision that applies to companies receiving exceptional assistance will apply to those in generally available capital access programs. Thus, in addition to the clawback provision applicable to the top five executives as under the Capital Purchase Program, a company receiving assistance must have in place provisions to claw back bonuses and incentive compensation from any of the next twenty senior executives if they are found to have knowingly engaged in providing inaccurate information relating to financial statements or performance metrics used to calculate their own incentive pay.
· Increase Ban on Golden Parachutes for Senior Executives: Even under generally available capital access programs, the golden parachute ban will be strengthened: Upon a severance from employment, the top five senior executives will not be allowed a golden parachute payment greater than one year’s compensation, as opposed to three years under the current Capital Purchase Program.
· Require Board of Directors’ Adoption of Company Policy Relating to Approval of Luxury Expenditures: This policy will be the same for companies accessing generally available capital programs as it is for those receiving exceptional assistance. There are no guidelines on luxury expenditures under the current Capital Purchase Program.
[These new standards will not apply retroactively to existing investments or to programs already announced such as the Capital Purchase Program and the Term Asset-Backed Securities Loan Facility.]
III. LONG-TERM REGULATORY REFORM: COMPENSATION STRATEGIES ALIGNED WITH PROPER RISK MANAGEMENT AND LONG-TERM VALUE AND GROWTH:
Even as we work to recover from current market events, it is not too early to begin a serious effort to both examine how company-wide compensation strategies at financial institutions – not just those related to top executives – may have encouraged excessive risk-taking that contributed to current market events and to begin developing model compensation policies for the future. Such steps should include:
· Requiring all Compensation Committees of Public Financial Institutions to Review and Disclose Strategies for Aligning Compensation with Sound Risk-Management: The Secretary of the Treasury and the Chairman of the Securities and Exchange Commission should work together to require compensation committees of all public financial institutions – not just those receiving government assistance – to review and disclose executive and certain employee compensation arrangements and explain how these compensation arrangements are consistent with promoting sound risk management and long-term value creation for their companies and their shareholders.
· Compensation of Top Executives Should Include Incentives That Encourage a Long-Term Perspective: Over the last decade there has been an emerging consensus that top executives should receive compensation that encourages more of a long-term perspective on creating economic value for their shareholders and the economy at large. One idea worthy of serious consideration is requiring top executives at financial institutions to hold stock for several years after it is awarded before it can be cashed-out as this would encourage a more long-term focus on the economic interests of the firm.
· Pass Say on Pay Shareholder Resolutions on Executive Compensation: Even beyond companies receiving financial recovery assistance, owners of financial institutions – the shareholders – should have a non-binding resolution on both the levels of executive compensation as well as how the structure of compensation incentives help promote risk management and long-term value creation for the firm and the economy as a whole.
· White House -Treasury Conference on Long-Term Executive Pay Reform: The Secretary of the Treasury will host a conference with shareholder advocates, major public pension and institutional investor leaders, policy-makers, executives, academics, and others on executive pay reform at financial institutions. Treasury will seek testimony, comment, and white papers on model executive pay initiatives in the cause of establishing best practices and guidelines on executive compensation arrangements for financial institutions.
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Any compensation expert will tell you that "bonuses" are "at-risk" pay meaning that if the company does not perform, bounuses are either diminished or not paid at all. As a former employee of a major insurance and financial firm, I can state from experience that all bonus eligible employees were effected by negative business business results. Bonuses were not paid. Increases were not given. I am appalled that all these financial institutions receiving bailouts and those with their hands still out, continue their errant ways. These initiatives are a good start but don't go far enough. Maybe their should be a retro active pay-back provision, fines, etc
Krisfor top executives
the govt cannot even monitor their own actions, how are they going to monitor the actions of private industries?
I hate when people just drop the word socialism. That's it. That's their whole argument. Like socialist=evil. Is getting the mail delivered evil, borrowing a library book, or going to public school? Please people. There is no risk of us becoming completely socialized. Visit a country that is. Americans are way too competitive and capitalistic by nature to have the janitor and the CEO making basically the same salary. We will always be capitalist with a few things that are socialist and pretty soon probably more things. Like banking and healthcare. These things are too important to the running of our society to be left to Joe CEO in hopes that he will be making decisions for the common good over his own interests.
We've all now seen what happens when Capitalism is allowed to go unchecked and unregulated!... ! Workers of the world unite! Posted by adamsmithsucks
Your comment is ignorant. Why do you think the government HAS so much money to throw around in the first place? Every penny of the money for the bailout came from, and will come from, taxation. So, obviously Capitalism was working. The top 5% of earners in country pay most of the taxes already. Just wait and see what happens when the government starts raiding your earnings, and the earnings of our children to pay for this ridiculous bailout.
So ... the government becomes an investor (using taxpayer dollars) in our banks. So then they unilaterally decide they can stipulate private industry compensation?
Does that mean that since I own stock in those banks I can do the same thing?
Bonuses and lavish severance packages, known as 'golden parachutes' are forbidden in this bill until the company has repaid their bailout.
I have long had a problem with CEOs who get big salaries and then bigger bonuses despite their company's profitability. How many others get a bonus for showing up for work, even if they don't do a good job? And get a company paid car and more besides? If a company is failing so badly that they need taxpayer assistance, then the people who are running it certainly should not be rewarded for being bad managers; they should be glad they still have jobs. It's one thing if stockholders agree to the excessive CEO pay, but when taxpayers are also defacto owners it has to change. Kudos to Obama for having the guts to do this!!
How long before we see this email from the CEO:
....................................................................
Greeting to all workers.
As you may know, I have recently had to accept a 75% reduction in compensation because of the extraordinary financial times that we live in. While painful, I'm doing this in the spirit of working together so that we can all come out of this a better company and country.
With that in mind, I'm also asking each employee to make the same sacrifice. Effective immediately, we will implement a 10% across-the-board salary reduction for all employees. This reduction, although far less painful than the one that I am accepting, will ensure that we remain a viable and profitable company in the future.
"Together, we can" weather this storm and return to profitability.
Sincerely
your CEO
You clowns would believe anything this socialists says.
This is all lipservice for the communist sheeple to get all worked up about.
How about capping the term limits of hacks like Barney Frank.
Is this the change you expected?
It doesn't matter because your rock star has colored skin.
This marks the end of entrepreneurship in the U.S.A.
I will concede to the high $500,000/yr salary for execs, but, IN ADDITION:
NO employee (not just the CEO or top exec) should make more than $500K during the same period
AND
There should be some formula set so that the highest paid FTE cannot earn X% more than the lowest paid FTE. The X% should be based on fairness and a liveable wage, and include benefits like healthcare & retirement. Execs should not get package A for benefits while non-exec employees get lower quality benefits.
I get as angry as anyone when executives at companies who take bailout money spend like drunken sailors. But I question the legality of this move and don't like the precedent it might set. It's not the government's place to tell businesses how to spend money. Now, if the government had set terms on the loan BEFORE making it, and executive pay was included in those terms, that's different. But now they're just trying to stop themselves from looking like they made a bad decision (which they did).
I see 14% in the survey said to leave exec pay alone - let it go wherever they can convince their owners/boards to negotiate to. Hmmmm - that's a lot of (rich?) people who think that no matter what a CEO does to the bottom line of a company or a company's mission(say the company is "environmentally" aware), they should get whatever "the traffic will bear". Of course, we should bear in mind that many of the people who sit on the boards of corporations were once(or are currently) highly placed themselves and have the sense of belonging to an exclusive club, whose members must take care of each other. Sic : Treasury Paulson placing no constraints on the compensation of CEOs of the banks receiving TARP funds. Paulson may, of course, desire to return to an executive position on Wall St from where he came and certainly would like similar compensation.
I'm glad Obama is concentrating on important issues like this, rather than sending FEMA to Kentucky, keeping lobbyists and tax evaders out of his cabinet, or coming up with an economic stimulus plan that really works.
What's next? Does the President tell them what assets to acquire? Does it tell them how to manage their portfolios, what stocks to buy, which investments are good?
This is the next step towards socialism and the end of demcracy as we know it.
Let us all not forget that these "bailouts" were needed because many financial institutions over-leveraged their balance sheets by investing too much in....ready for it....AMERICANS. This "crisis" is the result of the government, over the last 20 years through influence and legislation, forcing banks to make loans (mostly mortgages) to people who couldn't qualify for them based on their own financial standing. The government (both the GOP and the Dems) threatened banks with a freeze of Fed funds if they didn't increase the number of their loans to lower income people (a nice way of saying "bad loans").
The investment banks are plenty to blame in basically betting on the bets of bets on the return on these investments, but the fact that remains is that the majority of the "crisis" is because irresponsible Americans overleveraged themselves.
All of these banks believed that Americans would pay their bills. Heck, they even bet on it with their own investment funds. Americans failed to repay their debts and those bets are now losing bets. It's not the banks fault...it's not the governments fault....it's ultimately the fault of the irresponsible American public....but no one wants to hear that!
Brian, you do get that it was Merrill Lynch executives handing out $18 billion of your (and my) money to "reward" executives as the company was being bought by Bank of America. Maybe you don't. That's what happened. Rudy Guilliani condoned this as "Necessary" to save New York. It's not ALL CEOs, it's those top executives in companies taking government bailout money. That's not socialism. That's asking why billions of our tax dollars go to give bonuses to people whose actions led to the downfall of a company. He's not redistributing the wealth. He's simply stating how taxpayer money should be spent. If the government keeps subsidizing these companies without restriction, that leads to government ownership. A bank can place restrictions on your loan, right? No early payments, late fees. etc. Why can't the government, when lending money say you can't use it to reward employees, it needs to be used to increase lending or to restructure mortgages, etc. Look up "socialism", this ain't it.
400 million americans x 1 million dollars = 400 billion. Looks like they could of paid us all in the first bail out and problem will be solved. The bailout is only for the JONES!
I have to laugh -- there was so much negative publicity yesterday over a handful of MBTA workers making $100K with overtime pay -- yet we are going to "limit" the salaries of CEOs who have run their companies into bankruptcy and require bailout to FIVE times that amount. Hmmmmm -- who said the state jobs are the ones to have???
There seems to be confusion among the comments. I hope this helps clear things up: (1) This is not a proposal or a plan for consideration, it is an actual (enforceable) rule that now exists; (2) for those crying "socialism" - do you understand that those $1.8 billion in bonuses was paid with your money? This is how it works, the bank pays its bonuses while it is (or near) insolvent. The bank takes taxpayer money to balance its sheets (including the bonuses). Therefore, the taxpayers have provided the funds to allow the bonuses to be paid.
Agree w/ S.Sabourin. A few other thoughts...
1.) Why isn't every exec who takes govt. money subject to this?
2.) There isn't a salary cap in baseball because MLB MAKES MONEY!...hello? Those teams that don't make money get propped up by the money makers for the sake of diversity of competition and maintaining the talent pool. It's a self-sustained oligolipoly. I don't go to ball games to see the owner's latest hairdo. I go to see one of the few guys on the planet that can throw a baseball 95 or 100mph. Or can hit a baseball 400 feet or more.
3.) Speaking of the planet earth, what planet did those of you grow up on that think $500K isn't a lot of money? Would that possibly be the "Planet of Conspicuous Consumption"?...Hmmmm?
4.) I think alot was said about these exec's sense of reality when they all showed up at congress on there seperate private jets.
5.) I personally think that any exec that can't limp buy on $500K should have their job out-sourced to India. I mean think about it. Many Indian qualified executive caliber people are fed up with the Indian govt's corrupt bureacratic govt. The country has a great education system. They are all English speakers. Many of the population are fed up with India's bureacracy. Wait a minute! That's what the exec's in the US did to a good deal of service sector (high skill) jobs for Americans! That wouldn't be fair!!! US execs getting a taste of their own medicine!!!
OUTSOURCE any US exec's job (to India) who can't live on $500K.
J.
Great idea but very confused as to why this wasn't the way from the beginning? Did we not see this coming? Why wasn't the salary/bonus restriction put in place at first? No regulations = more greed as long as they are able.
While I like this rule for those taking bailout money sadly the people who did their jobs, and there are some, get shafted by this.
Also. Maybe we should take the same approach to our government. No pay increases until this is over. Or are they the ones who don't have to suffer?
Really Banks and CEO's are the only ones to blame? what about the stupid consumer who thought they could afford a ridiculous house? I work for a bank and work over 60hours a week and I dont get a bonus because the average american is an idiot? yes we the banks are to blame for some of this but not all. Maybe we should go to the idiot southerner who spent beyond his means and deport him to mexico or take whatever little he has left. What about the rating agencies? oh most of you probably dont know what a rating agency is. LOOK UP FACTS BEFORE CRITIZIZING JUST BANKS!
I agree with most other posters here, if the companies have to go to the US Treasury for a bail out then they don't deserve these exorbitant salaries and bonuses. These are our *lending* terms; if they don't like it, find another funding source.
How is this socialism???? If ANYTHING the socialist activities started when they got gov't money to bail themselves out of debt. That money should be handed out with restrictions and conditions. Socialism is when the gov't says no company exec can make over a certain amount. This is only for the companies with their hands in the tax payers pockets. The narrow minded individuals who are screaming "socialism!!!" should realize this is for YOUR benefit!!!!
I think it's a great idea.....
Now maybe we can get him to cap the Sports players salaries. $25mil for one year, give me a break, Manny. I understand he does not donate to "any" charities either. $25mil for one year is so beyond what anyone should be offered. Lower and cap the salaries so the players are still competitive, but give people/families who want to go to the games a chance to go with out taking a second mortgage.
The President is placing a limit on executive compensation for companies who need government (our) aid. Well done! About time!
These companies are asking for money from us the tax payers. In that case, they should limit their compensation to what we, the taxpayers, are earning. Even $500K is too much.
When they can run their companies and make a profit without needing handouts/"investments" (or whatever term they want to use) from us, then they can claim to be earning their pay and can ask to be paid what their owners (shareholders) will agree to.
As with everything else Obama has done as president, this is a rash, ill-considered, grandstanding move which will accomplish nothing.
While I understand the frustration felt by many of the people commenting, I would urge you all to look forward a few steps in the journey on which we are all traveling. If the Government determines to restrict compensation at companies receiving government assistance do we really believe it will stop with the financial sector. If past performance is any indication, it will not. Therefore, let us look at other areas that receive substantial governmental assistance. We can start with the colleges, universities and hospitals that are tax exempt organizations and therefore receive substantial benefit from the government in the form of tax benefits in the form of taxes not paid on their income, real estate and other properties as well as deductions received by their contributors. A quick scan of the local organizations in these categories yields a significant number of senior executives earning more than $500,000 - should these executives have their salaries reduced as well. What impact will such compensation restrictions have on these entities. We do not know and that should cause people to at least pause before leaping to the conclusion that government involvement in the setting of salaries is a good idea.
Finally, and this is sure to elicit a response, if a corporate CEO running an organization with 300,000 employees is limited to $500,000 in compensation then should we limit other compensation in other areas. For example, should state troopers be paid $200,000 in total compensation? Put that in there as it always easiest to point to others, but we need to be careful as to how far it could really go once we start heading down that hill of government involvement in all aspects of our lives.
Keep the discussions coming as it is the most valuable part of the entire process as people are genuinely involved in the issue and proposals to bring America back to greatness.
Why aren't we telling the CEO's and other top management people to stop taking their salaries for 6 months and put that money to could use, like re-training of employees or paying for Health Insurance for their retirees. I have no complaints about people earning money, but most of these people, just sit around and earn hundreds of thousands of dollars and also expect to receive bonuses while the rest of us struggle.
The government shouldn't be mandating how free enterprise/corporations compensate their executives unless the government is giving them the money. This, however, brings up another issue...the government shouldn't be using my money to bail out companies that are failing or have failed. Do you invest your money or buy stock in companies that aren't making money? What is capitalism?
I do not think that Government should ever get involved with the pay structure of private industry. BUT, if my tax dollars are going to bail out these industries, then government has every right to put a cap on salaries.
Sad times people.
This is a great first step towards fixing what's wrong with capitalism but the problem is much larger. Many corporations are controlled by a small group of "top-level executives" who have no real accountability except to boards of directors (more of the same) and stockholders.
These guys can and do go crazy awarding themselves ridiculous salaries, bonuses, stock options, expensive perks, etc. The scumbag with the $5000 shower curtain serves as an example. Another is the CEO of a company I actually worked for who got a $200,000 raise in a year in which the rest of company was on salary freeze. But for each one of these that gets caught, there are a thousand others that aren't quite as flagrant and don't get caught.
Fixing this problem has nothing to do with socialism. It's about controlling corruption, which affects any form of goverment. One of strongest aspects of capitalism is that it can recover from corruption, even outrageous corruption on the scale of an Enron. Socalism cannot.
Be thankful that after eight long years, there's finally a man with a brilliant mind in the White House. He may not be able to accomplish as much as we all hope in his first term, but at least he's moving in the right direction.
We, as citizens, also have a responsibility to stop this corporate corruption. Executive salaries are public record and we had darned well better start paying attention to them. And if those salary numbers don't represent overall compensation, we had better fix that problem too.
The bigger picture here is that the government now owns/controls the major banks. Its been a while since we heard of a state agency advocating perfomance based pay to this degree. Hoipefully they will roll this level of scuitiny out to all governement employees. While people are on here bashing failed CEOs they are not seeing the wood for the trees and focussed on the wrong issue. Whether you make $20K or $500K if its government money, the precident has been set. You have to perform now if you work for the government.
While I agree they make a lot, I do not feel its the governments place to be setting their income. Sounds a little too socialist for my liking.
Wow, a lot of dumb people here...scary dumb. My one comment for all those complaining about CEO's, ballplayers, and anybody else making a lot of money: Grow up, and stop being so jealous. These people are the cream of the crop of their industries- the best athletes, actors, singers, surgeons, writers, businessmen- they ALL make a lot because they are the best of the best, and you are not. Deal with it. I would love for all of you to be reviewed so publically- are you supposed to be working right now while you're reading this? You should be fired! ha ha
Only if they limit politician pay. Daschle makes $5 million in 3 years as an unregistered lobbyist? How is that OK?
Plus he gets a lifetime guaranteed pension.
Plus he gets unlimited healthcare.
Limit one, limit them all.
M I like your comment. All you have to do is fire anyone making less than $100K and outsource those jobs overseas or something. Then at $500K you are only 5x and can go back an argue a pay rise. Hey Citizen's bank is owned by the Roal Bank of Scotland. In turn that had a massive bail out from the UK government but I don't hear the UK telling its banking sector what pay they can earn.
Barry you are too naive for words.
THIS IS A GOOD FIRST STEP, BUT IT FAILS MISEABLE ON ONE FRONT: HOW ARE WE GOING TO CHANGE THE CULTURE BY REIGNING IN EXECUTIVE PAY IN THESE FIRMS, ALL THE WHILE, ALLOWING MANY OF THEIR BANKERS, TRADERS AND SALESPEOPLE TO MAKE MILLIONS.
SLASH ALL PAY AT "BAILOUT" BANKS AND PEOPLE WILL GET BACK TO BASICS. UNTIL THAT HAPPENS, THIS IS LIPSTICK ON A PIG.
The biggest single problem with our democracy and economy is the huge and growing gap between the top two percent and all the rest of us. They have most of the money and power. A temporary curbing of CEO salaries (and what about the bonuses, stock options and perks which generally are way more than their salaries?) will accomplish nothing. We need permanent curbs through dramatic reform of corporate, tax and labor laws.
Heck, why stop at regulating pay for CEO's. Let's have the government set the pay for everyone. The worker's paradise is finally here! Marx would be so proud!
I know that our country was built on the principle that hard work is rewarded with monetary gains but the disparity in income between the working public and the executives is an abomination. You may say that executives work but they are rewarded for failure. An answer to the disparity would be to have a 100% tax on all income over an arbitrary figure--say one or two million dollars. This would apply to all forms of employment and would include ballplayers, actors and actresses, stock brokers, doctors , lawyers etc.
Lori, are you serious?
Did you really just say 400 million Americans x $1 million = $400 billion?
Are you 3 years old, or just so high on Obamamania that you can't do simple math?
It's no longer a free market when the tax dollars are bailin y'all out so stop using that rhetoric.
Barry ever heard of the $DOD's $640 toilet seat or the National Park Services $797K outhouse? No private sector CEOs doing the buying there...
YOU REALLY DONT HAVE TO DO THIS if you want to solve all the rpoblems, then do this one thing.
1. starting now all income per person over 3 million a year, is going tobe taxed at a 75% rate.
Think about it, the government coffers would be full in 1 year. every over priced sports star, movie star, ceo and oil company wouldbe working to make america strong.
Course theres no way it would pass. the politicians make more than that a year and they have never voted themselves paycut before.
To all who support this move... would you be OK if the government decided to lower and cap salaries for everyone who does your job? If not, then you're a hypocrite.
The government has no right to decide this. If they wanted to make it part of the terms of the bailout, they should have done that BEFORE doling out the money.
Pure class envy...the Democrats are so good at it....
While they are busy pointing fingers at the private sector, they are robbing the treasury.
Let's limit our public servants to 100K, and limit them to hiring only two layabout relatives on the public payrolls...
Yes, TAHOS, you can -- assuming you own enough of the shares.
And so begins the long, slow march to socialism...
Why would you seriously think that this is a good idea? You do not think that those CEO's can go and get better paying jobs elsewhere? Do you want to attract the best talent to manage these financial institutions or the ones that will settle for $500K/yr? You might as well state that the CEO's are now going to be public servants in our new nationalized banks.
This is a ridiculous proposition. President Obama is too intelligent to actually try to enforce this policy.
It is obscene to see some of these CEO salaries . These CEOs are laughing at us and taking our money. I am still waiting for somebody to go to jail for $4.00 a gallon gas, not that long ago.
At the turn of the 20th century the "robber barons" ran America's industries and their workers were treated a little better than slaves, We have returned to that era. The media loves to point out at a cop making $100k a year. I think every middle class American should make that or more.working a skilled job. Especaily when these CEOs are making $10- $15- $25 million a year. You can not ,nor will not be the next Bill Gates. A good job at a good wage and benefit package should be right in America.
If companies have to go to the US Treasury for funds to stay in business, then the executives were not doing a very good job managing the company. Anyone worth a $1M+ salary should have a good grasp of economics and finance and should have been able to forsee this downturn and prepare for it; those companies aren't asking for help. The ones that are asking have caused a lot of their own problems, and I absolutely agree that there should be some very specific limitations and conditions that go along with taxpayer funds and restricting executives' salary is a great start. Don't like the terms? No $. We've seen too many flagrant abuses just in the last few months to trust that they wown't recur. Good job Mr. President!
In general I don't agree with capping a CEOs salary. Government should not be able to dictate what a company pays its executives However, I think they have a right in this case since companies are receiving financial help from the government. No bonuses either.
It kills me when executives who have led their companies down the toilet somehow deserve a bonus. I wish I could have a job where I get a huge bonus whether I succeed or fail. Hopefully, this financial crash will make boards of directors rethink the contracts they make with these executives including limits on bonuses and no bonuses for failures.
These restrictions apply to those corporations that requested bailout. Those CEO's,CFO's needed the money due to their ineffectiveness--They must now conform to the 'LOAN'S' requirements. GENIUS. Personally I think the President lenient.
There should also be upfront punishments (upon the likelihood of indictments)
listed in the CEO/CFO candidate's packet prior to hiring. They should know that
the punishment will fit the crime. These guys are heroes to their contemporaries.
DuffyLewis,
Boo Hoo!
Everyone is entitle to their opinion, your's is far beyond the only one, get over it.
Funny how you think it's a jealous thing, when you don't even know who you are talking to. That's a bit telling.
PS..I put the athletes in the blog to get a reaction..hahahaha! I guess it worked...
Oh and yes, some of us are at home, some of us are at lunch, some of us are on vacation, some of us don't need to be told what to do.............
As difficult as it is to accept that employees of institutions that lost billions of dollars are being paid relatively large compensation, Obama’s plan is shortsighted. The $500k cap will impact the ‘ground troops’- the traders, the wealth managers, the sales force. People who had nothing to do with the mortgage paper, CDO, CMO, swap groups that contributed to the meltdown. People who made substantial positive contributions to their firms’ P&L statements (yes, there are divisions of banks that were profitable last year). Yes, people who make tons of money for themselves in the process. Now with the cap they are being forced to take major cuts in their salary- up to 90% in some cases. Meanwhile, the non TARP bank across the street says to these ‘ground troops’ you can work here and you won’t need to take the major salary hit. What would you do? Stay and work the same long hours at a sick (dying) bank for 10% of your old compensation or take your ball and work for the bank across the street? So back at the sick bank while the taxpayer money is being shoveled in the front door, the healthy, profitable parts of the bank that could help save the bank from the brink, those ‘ground troops’, are fleeing out the back door. Have our chances we see that tax money back just improved? (answer: No) Do we really want the guys in the mailroom running the Tarp banks? (answer: (insert your frustrated smarmy comment about bank CEOs here). correct answer: No, you don’t).
Most of America is against the bailout anyway, so if companies that want to pay their CEO's more, they don't have to take the bailout money. So in effect there will be no bailout.
I would go a step further and say that some of these current and former CEO such as Richard Fuld should be in jail.
If I was a CEO making $10 mill- $20 mill a year, and then was forced to take $500k a year, I would just retire. Many of these CEO's would make more in retirement. I like the idea to a degree, but it really takes the incentive out of working in the future for these CEOs.
If Deval and Menino would give a similar same speech to the labor unions, Massachusetts would be a lot better off.
Llllloooooonnnnnnngggggggg Overdue!!! Imagine how this would fly if considered by Congress! Ouch.
Something has to change,.....
WHAT'S BEEN DONE TO THIS POINT HAS NOT WORKED!
kudos to obama for having the power to cap these useless crooks. If they are so talented why is did their companies collapse? you want free money from the government than be prepared to give up some rights and life style or we can just let your underperforming company go down the drain. Capping income is not socialism when your company is a wastefull and uncompetitive operation. My life style changed when my hard earned portfolio fell by 50% why is it so hard for these arrogant idiots to keep on wanting?
Too many bad analogies.....
This is not capping all salaries, or all CEO salaries, or all compensation, this is capping the salaries of CEOs getting a handout and I totally agree. He is also NOT saying their compensation should be capped, just their base salary and the rest should be tied to the good work they do until they turn their company around and pay back the taxpayer. If they aren't willing to bet on themselves, why should we?
#129: "As with everything else Obama has done as President"...
He was sworn in a couple of weeks ago. You can't fill a page of what he has or has not yet accomplished.
Bush spent 8 years destroying America and starting 2 wars and Obama is expected to part the Red Sea in 2 weeks?
You'd think Barney Frank and his pack of fools in congress would have thought of something like this before they gave our money away....What a bunch of knitwits...
The Banks that are accepting TARP money engage in middle market lending to privately held businesses that are the backbone of our economy. Typically, the bank's credit agreements contain not only salary and other distribution limitations for the time period when loans are owed, but also financial covenants related to the company's performance. Don't perform and you're defaulted. In addition, these credit arrangements typically provide that the borrower's principals will personally guaranty the loan in the event that the corporate borrower defaults. The banks' executives not having this sort of personal liability creates "moral hazard" and leads to recekless decision making. How about they play by their own rules?
Nothing destabilizes a society, and promotes an unhealthy economy, quite like gross disparity in the distribution of wealth: a rich man and a poor man can each only consume only so many pork-bellies. For the past 25 years, this movement of wealth towards the few has been the dominant paradigm of the US economy, and now the number of people who can afford to purchase pork-bellies has fallen off dramatically.
It would be nice to think that this accumulated wealth has 'trickled down', and perhaps it has -- in China, Latin America, the Marianas, and other places not hampered by minumum/living wage, OSHA requirements, work day and week limitations, child labor laws, etc. The irreducible fact is that getting rich usually does not predispose the rich to charity -- it just makes them greedier. Most of these people did not accumulate their wealth by playing fair and square: think Trump, not Buffet.
So yes, there are times even in an otherwise free-market environment when collective greed gets out of hand and it is appropriate for government to step in and take steps to level the playing field a bit. Teddy Roosevelt -- a Republican -- did this with anti-Trust legislation. His nephew's New Deal saved this nation from the Scylla and Charbidis of Communism and Fascism that was dividing the world in the wake of the Great Depression. And yes, for all their well-documented excesses, Affirmative Action legislation and Great Society entitlement programs afforded both women and persons of color an opportunity to participate in the American Dream from which they had been excluded.
I am all in favor of radical government intervention to re-distribute wealth that will revitalize the market for for pork bellies and mid-sized cars. I am also content to see Detroit recieve the harshest of upbraidings from the Invisible Hand for putting all their eggs in the SUV basket: they never learn and deserve to go out of business.
If he were consistent we'd see a speech from Obama about capping excessive compensation when the bailout funds are allocated to the states- "...If you accept the bailout money Massachusetts, you'll have to accept salary caps for your highly compensated employees- salaries and total compensation packages capped at no more than the national average for each position- incuding unions!!!" Somehow I don't think we'll hear that speech....
Proof positive that liberals HATE achievers.
A little hypocrisy - Obama wants to limit executive pay. Does that mean he will not accept campaign contributions from them? How about $64,000,000.00 from financial execs to his election campaign. How about $17,000,000.00 from the financial execs to the Obama Inauguation. I think BO should give it all back since much of that money came after TARP. I think BO (and all of Congress) should not accept more than one dollar from the financial execs for election campaigns until all the Tarp money has been returned to the US Treasury. I think the President should limited the amount any trial lawyer can recieve if the clients he represents are suing banks, etc. I think the President should limited the amount any lobbyist
can earn if that lobbyist is working to get fed funds for anything. Didn't Daschle 'earn' over $5,000,000 since leaving the Senate - and he got that from the health care industry as he worked to get more federal money into medical care? So many sucking off of the same 'whatever'.
From each according to his ability, to each according to his needs
I don't think, anyone should make more then the president of the United States.
He has the most resposiablity in this country. And what is his pay!!!
ha
I would settle for a little more oversight in how money is spent even. Surely, those companies on the brink of bankruptsy that need our tax dollars to stay afloat could forego the annual executive retreat to lavish hotels in Vegas, when the average worker paying for that mini-vaca with our taxpayer dollars has to give up so much more.
It's about time!!! What a difference reading Pres. Obama's transcript compared to W's. It is hilarious the "better not touch my money" attitude people are taking against Pres. Obama's plan. Just where did that $700+ BILLION BAILOUT come from? Oh yeah YOUR taxes, and MY taxes. These Wall Street guys ALREADY have started taking YOUR money. Understand, if the foundation of our economy is not strengthened, all will come tumbling down. I think a great analogy is comparing the Trickle Down method to a spinning top and a Bottom Up method to a pyramid. The Trickle Down is so top heavy, once it loses momentum, it collapses because the lower end can not supprt it. Pyramid is self explanatory.
Why should anyone be surprised with Obama's 'suggestion' or 'edict'? Private sector - don't take handouts because in the long run, it will cost you. I have to work about 10 years to earn $500K but then again, I am not qualified or have no desire to run an organization. Let's face it; few of us truly are capable of being CEOs. LIke President Reagan once said "Beware when someone says - "I am from the government and I have come to help you". Government is no friend of any business (big or small) - they love to have one hand in your pocket and look at the sinecures they themselves have!!! All the Wagon Pullers of America - WAKE UP !!!
BRAVO. GW Dopey should have done the same, but he was too stupid to even understand the process before he handed over billions. For those that say this is unfair, TOUGH SH!!T. Once a company is off the government hand out list, their CEO can go back to making whatever he wants. But as long as you and me are bailing his sorry @ZZ out - he has to take a cut in pay.
I disagree with the idea pay CEO's more money, because we need their talent to turn things around. Who is kidding who? These clowns took advantage of the companies they led even in terrible times. They did that without guilt. And they were incompenent or their companies wouldn't be in that situation to begin with. They are responsible for the financial crisis. Shameful. I appauled President Obama, he isn't going to take this crap anymore. "Pop the golden parachute and let the air out" Love it. Should have been done years ago. Go Obama. Clean up this dirty mess.
Just change their compensation to stock options tied to the current price and you don't need a cap. Allow them to cash in yearly. They only get paid if the company improves.
I am a big open market guy but these companies are taking bailout money so they have no right to act like a free market business until the repay the taxpayers.
P.S. Most CEO's are not crooked or greedy. Most national politicians are liars and cheats.
We're all adults here (at least I hope) so therefore, everyone is accountable for their own action. I also do believe in pay for performance philosophy whether is through base pay or bonuses. If you think you deserve to have a high salary, then prove it but don't expect it! A company is team, when 1 goes down, they all go down together - sink or swim together.
I agree the govt should have put a leash on all the bailout money. Unforunately, when the bailout money was granted, it was Bush on his way out the door and did jack. Now Obama has to take this wrath. I do also agree that the govt. jobs need to take a clsoer look especially at the top. Lately, we've been hearing too many scandals involving money with these politicians. What a disgrace to thsi country!
Finally, as I mentioned before that we're all adults here. You know how much you make (if not, then you're an idiot), you know how much you can afford (if not, then you're an idiot). If you have to ask how much? Then most likley, you cannot afford it. Too many people want to live the so-called "American Dream" and yet they do not have the means for it. Who cares what next door Mr. Jones have. It's all about status and agreed in America. Thanks to the media, and hollywood. What can't people just be happy with they got?
I think this recession/depression is a good lesson to all of us. A very expensive lesson but it was bound to happen. Hope everyone lives long enough to tell their children, grand-children, and great-grand children to be smarter about money and the concept of finance than we will ever be!!
I'm shocked at all the defenders of a Capitalist system that is so broken and so flawed. How can we maintain the status quo when so many are uninsured, homeless, and hungry? It is simply not a fair system that allows the captains of industry to exploit the working class upon whom they rely to pad their already bloated bank accounts. Democratic Socialism is a Capitalist system that allows the free market to operate but also protects citizens by ensuring social programs like health care and education. People see the word "Socialism" and freak out because this country has done such a good job scaring people with the specter of Communism that we are unwilling to explore a system that gives people some measure of equality. How can you defend a system that allows 10% of the population to possess 90% of the wealth?? Unless of course you're in that top 10%.
Reading the above posts, I must say that I'm disappointed in the number of people who can't see the hypocracy in their words. People who are saying this rule violates free market principles are either in denial or very confused. How is a government bailout supportive of a free market??? In a free market if your company tanks, you go out of business. That's what SHOULD happen. However, the government bails them out and everyone gets to keep their jobs. That is the very definition of socialism. Free market died the day they accepted the government bailout. They don't like it, then don't accept the bailout. It's that simple. Obama didn't kill the free market, anyone accepting the bailout did.
I am thrilled that my tax dollars won't be spent on somebody's outrageous salary!
There is certainly some faulty logic above. This is not the end of capitalism; if anything is threatening capitalism it's the bailout itself. This is just putting conditions on the help the companies begged for. If we are going to pay to save private companies, we certainly have the right to do it on our own terms.
As for CEOs who are going to flee these companies, best of luck finding new jobs in this economy! I'm not buying the "these guys deserve massive salaries because of their talent" argument. Anybody who has worked in any industry knows that getting ahead does require talent and work, but also luck, self-selling and politicking... Not to mention that there are many fields that are far more useful to society and satisfying to the employee than finance that pay far less, no matter how talented the individual is.
I think all CEOs are over paid. So while they will have their salary capped at $500K they will get $10M in stock options. These guys always make out. It is the little guy who they squeeze every nichel out of so that they can make their profit numbers and get their bonus. I've had it with these fat cats.
I'm also tired of public employees getting an annual raise, better healthcare and vacation time and a pension plan. I'm in the private sector with a tanking 401K and I havn't had a raise in years. How can my property taxes keep up with the continually escalating cost of public employees?
"I know that our country was built on the principle that hard work is rewarded with monetary gains but the disparity in income between the working public and the executives is an abomination."
No, it's an Obama-nation.
Sully Sullenberger couldn't land this disaster safely...
Citibank executives (a/k/a "subprime charlies' ) ought to be forced to live in a trailer park, let alone get 500K. That will fix em!
There are some many things wrong in these posts my head hurts while typing this. First capitalism has not been left unchecked, as an example our wonderful rep Barney Frank made a wonderful job pressuring banks into lending to unqualified people under the auspices of racial discrimination.
Second a CEO's pay is what he can negotiate it to be and should not be capped even if he is taking bailout money. I base this on what a CEO has to do for a company - for one he as to listen all of his employees complain about their lives, roles, and current pay while dealing with all of the shareholders complain that they aren't seeing enough of a return and elected officials who think that the sun rises and sets on them and
continually changes the business rules.
Third based on this country's pathetic savings rate I am going to qualify that most of the posters here are not qualified to manage a family of four let alone a large enterprise, so stop complaining.
Finally if you are going to continue to complain about CEO pay they you better start complaining about what our elected officials receive in compensation. Whether it is their ability to use campaign contributions to pay for their meals & travel or something much more fun like their specialized social security plan which is actually backed by real assets (maybe if they had the same plan we did they would actually try to fix what is broken)
Arbitrarily arrived at government intervention in private-sector administrative decision-making should be enthusiastically opposed by any American as it is an attempt to infuse Socialistic principles in a free market economy that has sustained and grown the United States into the most consummate democracy on the face of the earth.
GOOD! The same people who have driven these companies ( and the American economy) into the ground should be fired, not just given a salary cap. Too valuable? The Best Talent? BS! You can find 10,000 highly qualified men or women who would take those jobs in a heartbeat and do a BETTER job! These are the same people who get 7 or 8 figure bonuses but gladly send American jobs overseas so they can see an extra nickel on their stock options. If any of them cry about this, show them the door! Most of us in the corporate world won't be getting a cost of living increase this year, let alone ONLY making $500K
You all have it wrong. This was written so that they can not use bonus and stock to circumvent this. The magic word here to circumvent this is the CEO can not make more that $500,000. Who says the CEO can't be a figure head (CEO's brother in law) and the CFO, COO, Chairman etc can't make $50 million dollars? Says CEO all over the place here.
> Barry ever heard of the $DOD's $640 toilet seat or the National Park Services $797K outhouse? No private sector CEOs doing the buying there...
Not specifically, but I think those represent a different issue. I mentioned the $5000 shower curtain because it's an example of the kind of over-the top, outrageous, and disgusting arrogance that makes CEOs think they can get away with anything and has lead us to the economic conditions we're enduring in this country.
Think about what that $5000 would mean to a family that just lost its home due to a layoff. Then think about how many desperate families could be rescued by the $18 billion in bailout money that went to Merrill Lynch executives. Anyone who would give or accept that kind of bonus is beyond contempt. Nothing is going to bring prosperity back to this country while we have people like that in positions of power.
I have no problem capping all those pay. Even our government should do that until all the trillions of debt has been paid. Look what are we paying for when we pay someone so much that he/she could retired within a month?? Next we have heard so much of all those graduates from Harvard ... don't you think that some of these new brains could take over for much less and perform a better job? There are hundreds of CEO out there that could do the job. This challenge if they are looking at challenge should put them in good standing if they could resolve what the current CEO cannot do. So think about it.
most of them should go to jail because they are mostly crooked S O Bs!
so the idea they can only make 500K really is there welfare payments for laying off thousands and caving in retirement accouts...
in fact, I would not give one of them the time of day if I even had a armful of watches because they absolutely do not care about their customers or the average person...it's all about them!
to Dave Singleton...
You say most CEOs are not crooked or greedy? You are a fool to believe that. Where have you been the last 10 years with all the CEOs who were indicted? We only heard about the large companies like Tyco, Enron, HealthSouth, Broadcom, Intermune, ImClone, UBS, Quest, Worldcom etc.
Wake up and smell the roses!
NOBODY is worth $70M /year.
You can get better talent for a fraction of that.
"Government 'help' to business is just as disastrous as government persecution… the only way a government can be of service to national prosperity is by keeping its hands off."
i say to make this really fair , all the CEO'S can only make 10% more than the lowest paid full time person in their respective companies.Then at the end of the year.The profits get to be split among each employee ,from the CEO's to the lowest paid employees equally. Afterall aren't we all working for the same goals in each company.So the profits should be split equally among all employees as they ALLdid a good job.
CEO's are the problem. They are overvalued, overpaid and full of themselves. The hire people to outsoure work to other countries to save money, increase their bottom line to fill the fat pockets and when it comes time for annnual increases, if they anything like the company I work for cannot give their employees a decent annual increase. They try to make you believe that 3.5 - 4 percent is great for an employee who exceeds expectations.