Obama is announcing plans to cap executive compensation to $500,000 for any business receiving TARP funds. Is this a bold move or short sighted economic populism?
My gut reaction is that it’s ill conceived but thinking a bit more, it could end up being a clever strategy. What else can executives do but grin and bear it? Every company is going through the same thing so there’s not like there’s an escape route. Even moving internationally is not going to help as every other country is going through a recession as well. Might as well knuckle down and figure out the quickest way to repay the TARP money so they can go back to their original salaries.
As a taxpayer, I hate seeing my money go to bonuses and excess for the captains of industry who failed to prevent their companies’ (and our economy’s) ruin. I understand the need to attract the best talent to these key positions. If your company needs a bailout, you are no longer the Best and brightest, judging by results.
At first glance it* seems like it could be a good idea, but I disagree with the suggestion that it should be retroactive. If you make an agreement, you don’t turn around and add unpalatable clauses after the other side have committed themselves.
*the cap in general, not the retroactive version suggested by the OP and some members of congress
But the Administration can really lean on those who have already gotten theirs to conform. The suggestion that government auditors will be watching every cent, and publicizing every wasted penny will go a long way towards keeping companies with the program.
Pretty good idea to me, wish they’d done that with the initial buttload of free money they handed out like party favors. But of course, the Republicans would have never done anything like that. Hell, we had JACKASS Giuliani actually defending those companies giving huge chunks of bailout money to executives as bonuses. (Mind numbingly stupid cluelessness - glad he never got anywhere near the Presidency!)
I’d incompetently loot any of the Fortune 100 companies into oblivion for half that amount.
When will these people get the simple fact, to channel The Daily Show:
YOU HAVE NO BEST PEOPLE!
You were all incompetent at best, sociopathic looting crooks at worst. We have had to put our children and grand-children in hock to bail you out so we will dictate whatever terms we damn well please and change the deal whenever the hell we like.
Anything short of being having their families charged for the bullet before being driven penniless into the streets is getting off lightly.
Part of the problem is many think these financial geniuses were just there at the wrong time and are sort of blameless. But, they actually developed the system from, crappy mortgages to selling them in huge packages to swaps . They developed these instruments to game the system and get rich. They should be out on their asses.
I am just waiting for the fat cats to find the loopholes in these regulations. I have no idea what those loop holes might be but you can bet your bottom dollar they exist and these guys will find them and end-run around the whole thing.
Terrible idea. Would have been fine if it were something reasonable, like $2 million maybe, but a half mil isn’t much at all. There was a time in my life (now sadly passed) where I made half that in a year, and while it was very nice, it wasn’t more than I could find use for. There’s going to be a brain drain at those companies requiring bailouts – and given the condition of the markets today, there are plenty of companies that were well-managed that still need help. That’s going to cause chaos, confusion, inefficiencies, and will lead to more failures and more loss of jobs.
The US government is trillions of dollars in the hole. Can we put, say, a salary cap of, oh, 1/16th of all elected officials current salary in place too? If so the I say sure, let’s do it! Cap executives who use bail out funds to $500k and cap all elected officials to 1/16th of their current salaries.
Further, I think we should put in some caps on the salaries of any company being used for ‘economic stimulus’ who will be doing all these massive infrastructure projects it seems we will be doing to ‘stimulate the economy’. After all, THEY are going to be using government funds as well. So, let’s cap their executives as well…say at 1/4 of their current salary if they want the contracts.
I’m sure all of this is going to do wonders to stimulate the economy. It would be worth it just to see the effect on the politicians who, interestingly enough, never seem to come in for even a small share of the blame for our current economic mess…despite having a large percentage of the blame for it.
I actually think the bailouts are a bad idea, personally. Let em fail. I’m guessing that wouldn’t be too popular though with a lot of Democrats right now since failing would lead to even higher unemployment. Which begs the question here…who all has an interest in making sure some of these companies don’t fail? And if the answer is more than just the executives…well, I find it funny and a bit ironic about people who complain about these executives salaries in this context.
If I were in charge I’d make the limit lower, perhaps at America’s median household income. I’m not worried about “brain drain”. It seems that these clever folks spent the last few years cleverly designing new financial instruments that nobody understood for the specific purpose of making an end run around rules and regulations. If they’re replaced by more ordinary, old-fashioned business types, they might refocus on the basic idea of earning money by lending to people who are able to repay. That would be a good thing.
