# No bailout exec can earn more than $500,000. Good idea? **URL:** \ **Category:** Great Debates\ **Created:** [February 4, 2009, 2:53pm UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413 "2009-02-04T14:53:23Z")\ **Posts on this page:** 11\ **Page:** 10
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [February 9, 2009, 1:45pm UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/181 "2009-02-09T13:45:03Z")
Its quite simple, really. A group of people working collectively towards a common goal can be quite successful, so long as that goal is profit. The instant such a group becomes a government entity, their collective and individual IQ’s drop drastically, and they become inept and inefficient. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [February 9, 2009, 2:11pm UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/182 "2009-02-09T14:11:21Z")
> [@msmith537](#): > > Right, and the Liberal response is always salary caps, more regulation, and wealth redistribution. > > I’m not opposed to smart regulation. However the more regulation, the more you suck wealth away from companies that actually produce goods and services and give it to lawyers, accountants and “compliance experts” who produce nothing but paperwork. > [gonzomax = quote] > [http://sociology.ucsc.edu/whorulesam...er/wealth.html](http://sociology.ucsc.edu/whorulesam...er/wealth.html) The distribution of wealth in America has become as distorted as the Gilded Age. I do not know how the conservatives think the private sector is better at allocating wealth and resources. Because wealth and resources are created and acquired by the private sector, not by government. gonzomax [http://sociology.ucsc.edu/whorulesam...er/wealth.html](http://sociology.ucsc.edu/whorulesam...er/wealth.html) The distribution of wealth in America has become as distorted as the Gilded Age. I do not know how the conservatives think the private sector is better at allocating wealth and resources. [/QUOTE] Buy any peanut butter lately.? They sent out tainted peanut butter because they made money. People get sick and die ,but it is OK if they help the bottom line .The Repub mantra of trusting the companies to do the right thing results in looting ,poisoning and death. The government has to reign these companies in. They cheat. ---
**Author:** ![Ocean\_Annie](https://avatars.discourse-cdn.com/v4/letter/o/8797f3/32.png) [@Ocean\_Annie](https://boards.straightdope.com/u/Ocean_Annie)\ **Post date:** [February 10, 2009, 6:16am UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/183 "2009-02-10T06:16:32Z")
> [@Algher](#): > > It is called the Def-14 A and is filed with the SEC, it is also known as the proxy (as I stated). > > Anyone who is SERIOUS about understanding executive pay goes their first. I notice that you could not refute anything that I posted. > > To save you one more Google: > > [http://www.sec.gov/Archives/edgar/data/320193/000119312508010038/ddef14a.htm](http://www.sec.gov/Archives/edgar/data/320193/000119312508010038/ddef14a.htm) I agree that the filing statement is important. It is the primary source for all of the published analysis about executive pay. But the average person who doesn’t invest or have a background in finance will not understand the different components of executive compensation or the financial advantage of pay structure and perks without reading about it first. Executive pay is complicated and so are the accounting rules. A book that is researched and well documented is the best way to learn about a topic and doesn’t seem less serious than examining a proxy. If you believe facts should always be cross referenced, then I understand your perspective. But considering the pervasive dishonesty and fraud witnessed in corporate culture, the SEC filing statements may not be accurate and the purported _independent_ compensation board may not be unbiased. Two summers ago, a Congressional investigation discovered a number of companies misrepresented compensation consultants as _independent_ when they were employed by the firm. ---
**Author:** ![Deeg](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/deeg/32/2955_2.png) [@Deeg](https://boards.straightdope.com/u/Deeg)\ **Post date:** [February 11, 2009, 3:51am UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/184 "2009-02-11T03:51:56Z")
The following quote is from [Gregg Easterbrook](http://sports.espn.go.com/espn/page2/story?page=easterbrook/090210), someone who I normally would considered to be informed. Is there any truth to the bill being voluntary? > [@](#): > > Obama to Announce Voluntary Speed Limits: Given that TMQ has been railing against big bonuses to CEOs and Wall Street types, you’d think I would be happy about the executive-pay limits Barack Obama announced Wednesday. The announcement got fantastic press for Obama – our new president is the most gifted media manipulator since Ronald Reagan, and successful modern presidents have had media-manipulation skills. But the “limits” are not what they seem. For most firms that receive federal bailout money, the “limits” are voluntary. Golly gee whillikers, CEOs will voluntarily limit their own pay, won’t they? Corporate executives don’t need a presidential directive to place voluntary limits on their bonuses, they can do that on their own at any point. The “limits” apply only to firms that receive what the Treasury Department calls “exceptional aid,” meaning most of the millions and billions being handed out as gifts to banks around the country will continue to come with no strings attached. So far, three firms have received aid classified as “exceptional” – AIG, Bank of America and Citigroup. Guess what? AIG, Bank of America and Citigroup have been exempted from the limits. The “limits” announced by Obama would bind any firms that may receive “exceptional” aid in the future, but for now, bind no one. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [February 11, 2009, 5:08am UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/185 "2009-02-11T05:08:34Z")
> [@Algher](#): > > Interlocks are reported as required by the SEC. If you \*\*know \*\*of a BOD with such horrible interlocks, please let me know. I will run a check and report back here with what I find through a review of the filed reports, similar to what I posted for Apple as an example. > > There is no digging required - it is all publicly available information. That is part of why there is accelaration in pay. If everyone knew what their job paid at other firms, you would see similar pay movements in other jobs. > > As for adversarial - it is as adversarial as most jobs. I do not have an adversarial relationship with my CEO, though I report to him. If my performance drops, I am fired. I have a severance clause in my contract. I have change-in-control provisions for my options. I have shares in the firm granted to me as well. All of this I negotiated for, because I knew what I was worth in the marketplace and I knew many of the ways a company could screw me. > > CEO’s benefit from transparent information, and knowledge of the game. That is not criminal. If you wish to complain, the real target should be the comp committee and the BOD for not doing their job. [FAIR — Page 2870 — FAIR is the national progressive media watchdog group, challenging corporate media bias, spin and misinformation.](http://www.fair.org/index.php?page=2870) This is the interlocking directors from the media only. It is representative about how they they exert influence. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [February 11, 2009, 5:09am UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/186 "2009-02-11T05:09:56Z")
[http://papers.ssrn.com/sol3/papers.cfm?abstract\_id=11109](http://papers.ssrn.com/sol3/papers.cfm?abstract_id=11109) Interlocking directors have been known for a long time. It is real. ---
**Author:** ![Algher](https://avatars.discourse-cdn.com/v4/letter/a/3d9bf3/32.png) [@Algher](https://boards.straightdope.com/u/Algher)\ **Post date:** [February 12, 2009, 2:22am UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/187 "2009-02-12T02:22:05Z")
> [@gonzomax](#): > > [http://papers.ssrn.com/sol3/papers.cfm?abstract\_id=11109](http://papers.ssrn.com/sol3/papers.cfm?abstract_id=11109) Interlocking directors have been known for a long time. It is real. 8%, and that is only one Director out of many (and this from a 1997 article). Not exactly the conspiracy that is spun by the populists, is it? ---
**Author:** ![Algher](https://avatars.discourse-cdn.com/v4/letter/a/3d9bf3/32.png) [@Algher](https://boards.straightdope.com/u/Algher)\ **Post date:** [February 12, 2009, 2:23am UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/188 "2009-02-12T02:23:42Z")
> [@gonzomax](#): > > [FAIR — Page 2870 — FAIR is the national progressive media watchdog group, challenging corporate media bias, spin and misinformation.](http://www.fair.org/index.php?page=2870) This is the interlocking directors from the media only. It is representative about how they they exert influence. That list just shows who is on the board. While I WOULD consider this when reviewing how a particular media outlet reports on a certain company, it has little to do with interlocks that influence executive pay in some sort of a “you scratch my back, I will scratch yours” system that you seem to imply is endemic. ---
**Author:** ![raindog](https://avatars.discourse-cdn.com/v4/letter/r/2bfe46/32.png) [@raindog](https://boards.straightdope.com/u/raindog)\ **Post date:** [February 12, 2009, 4:28am UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/189 "2009-02-12T04:28:56Z")
> [@Martin\_Hyde](#): > > Maybe, I guess we’ll have to see. A big problem though, is that the health of a company is often times based on investors perceptions of said company. If some one is placed in the CEO position of a failing company because the previous big money guy left due to the salary cap, and this person has no executive experience and is clearly in the position solely because it’s a big pay raise for him and no one else wants it–how does that affect investor confidence? > > Listen, I’m not saying lots of CEOs making millions a year didn’t fuck up. Some of them fucked up royally, many of them wasted millions of dollars on frivolous shit. However there’s also the other side of the coin, sometimes a company gets fucked over by the ravages of the free market and the company’s management doesn’t really deserve any of the blame. The trouble Continental Airlines found itself in after 9/11 was genuinely simple “bad luck.” Anyone who has ever been in business for themselves understands that there are certain conditions you can’t control. Some of them? _Some_ of them? If you’re gonna hold a dance , you have to pay the band. They’ve come hat in hand for the government’s money. They screwed up individually and collectively. They don’t like the salary caps? No problem. Just don’t take the money. ---
**Author:** ![tagos](https://avatars.discourse-cdn.com/v4/letter/t/bbe5ce/32.png) [@tagos](https://boards.straightdope.com/u/tagos)\ **Post date:** [February 12, 2009, 10:43am UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/190 "2009-02-12T10:43:26Z")
In reply to Hyde ‘ravages of the free market’ schickt. You meant to say - ‘the absolutely inevitable consequence of a bubble collapsing, the warnings of which were ignored and the regulations designed to stop this sort of thing, hamstrung’. The ‘free market’ is not like the weather. The bubble itself was the product of incompetence, greed and malice of the very people who gorged themselves on the profits as they played pass the parcel with ridiculous emperor’s new clothes derivatives no one knew the value of or in most cases it turns out, even understood. Causing the misery these people have caused merits a bullet in the back of the head, not a bonus. An International Financial Crimes Against Humanity Tribunal should be convened and these people dealt with. ---
**Author:** ![MichaelQReilly](https://avatars.discourse-cdn.com/v4/letter/m/df705f/32.png) [@MichaelQReilly](https://boards.straightdope.com/u/MichaelQReilly)\ **Post date:** [February 12, 2009, 2:52pm UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/191 "2009-02-12T14:52:26Z")
There was a good editorial in today’s NYT on this: [http://www.nytimes.com/2009/02/12/opinion/12kristof.html?\_r=1](http://www.nytimes.com/2009/02/12/opinion/12kristof.html?_r=1) [Previous page](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413.md?page=9)