# 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:** 20\ **Page:** 3
**Author:** ![Martin\_Hyde](https://avatars.discourse-cdn.com/v4/letter/m/47e85d/32.png) [@Martin\_Hyde](https://boards.straightdope.com/u/Martin_Hyde)\ **Post date:** [February 4, 2009, 5:39pm UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/41 "2009-02-04T17:39:17Z")
> [@elucidator](#): > > But these guys are patriots, no? Hell, most of them are Republicans, and you can’t get more patriotic than that, what with the patriotic lapel pin and all! I’ve no doubt…none!..that these patriots will take one for their country, and will rush to sacrifice a bit of financial comfort for the sake of their country and their countrymen! > > Me? Tequila and bongwater, why do you ask? CEOs are greedy, self-centered, egomaniac people as a group. There are some exceptions (like the founder of Costco), I’m guessing you already knew this, though. CEOs are only interested in their bottom line, except for the rare CEO that has some other non-financial interest in the company (such as it being a family company that has been ran by the family for generations or some such.) ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [February 4, 2009, 5:40pm UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/42 "2009-02-04T17:40:51Z")
> [@xtisme](#): > > You never heard of a board of directors or stockholders, have you? You actually don’t know how businesses run…do you? > > -XT Not very well, given available evidence. ---
**Author:** ![Martin\_Hyde](https://avatars.discourse-cdn.com/v4/letter/m/47e85d/32.png) [@Martin\_Hyde](https://boards.straightdope.com/u/Martin_Hyde)\ **Post date:** [February 4, 2009, 5:41pm UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/43 "2009-02-04T17:41:24Z")
> [@silenus](#): > > Good. Let them leave. They’ve already proven themselves to be, at best, incompetent and at worst, criminal. Fuck 'em. The quicker we can get them out of the system the better. Best if they leave voluntarily. That way the angry mobs have fewer miscreants to track down while carrying hot tar and feathers. And who replaces them? Someone with no experience? How does that affect investor confidence in a company? I don’t disagree that **some** of the current crop of CEOs wanting bail out money were poor managers and probably aren’t good at their jobs. But do you not concede that some companies in bad shape may have gotten there simply because the market tanked and took good companies down with bad? Not all the companies that are going under right now were particularly badly run companies, recessions and economic downturns don’t exclusively fuck over the “evil” or “incompetent” companies anymore than they don’t exclusively fuck over evil or incompetent individuals. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [February 4, 2009, 5:44pm UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/44 "2009-02-04T17:44:31Z")
[QUOTE=elucidator] Not very well, given available evidence. [/QUOTE] 😛 That’s sort of like saying the French have always been surrender monkeys and cowards based solely on a small time window in 1940. Over a century of prosperity with a few setbacks and suddenly they aren’t doing a very good job of it. But…they turned the economy into a newt! Sure…but it got better… -XT ---
**Author:** ![Martin\_Hyde](https://avatars.discourse-cdn.com/v4/letter/m/47e85d/32.png) [@Martin\_Hyde](https://boards.straightdope.com/u/Martin_Hyde)\ **Post date:** [February 4, 2009, 5:44pm UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/45 "2009-02-04T17:44:49Z")
What I find distressing about this thread is people seem wholly incapable of extracting rage from their logic. That’s a terrible way to make decisions. Do you guys on the left genuinely believe **every** CEO is a fat cat moron who brings no value to their company and could be replaced on a whim? That no good CEOs have seen their companies get screwed over by the generally bad economic situation? Really? You think that can’t happen? Do you really believe that investors are going to pump money into companies with rookie CEOs with no top-level management experience? They might, in some cases, but compound that with the fact that these are companies that are in bad enough shape to be taking government bail out money and I just don’t see it happening. I’m an investor, I wouldn’t invest money in a failing company that replaces a CEO with someone who has never been an executive before. ---
**Author:** ![silenus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/silenus/32/166_2.png) [@silenus](https://boards.straightdope.com/u/silenus)\ **Post date:** [February 4, 2009, 5:45pm UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/46 "2009-02-04T17:45:59Z")
> [@Martin\_Hyde](#): > > But do you not concede that some companies in bad shape may have gotten there simply because the market tanked and took good companies down with bad? Not all the companies that are going under right now were particularly badly run companies, recessions and economic downturns don’t exclusively fuck over the “evil” or “incompetent” companies anymore than they don’t exclusively fuck over evil or incompetent individuals. Agreed. Some companies are hurting “just because.” But CEOs need to suck it up just like the rest of us. If they are that good at what they do, they can get stock options out the wazoo that will pay off in 10 years. In the meantime they can pinch pennies like the plebes. ---
**Author:** ![Martin\_Hyde](https://avatars.discourse-cdn.com/v4/letter/m/47e85d/32.png) [@Martin\_Hyde](https://boards.straightdope.com/u/Martin_Hyde)\ **Post date:** [February 4, 2009, 5:47pm UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/47 "2009-02-04T17:47:39Z")
> [@silenus](#): > > Agreed. Some companies are hurting “just because.” But CEOs need to suck it up just like the rest of us. If they are that good at what they do, they can get stock options out the wazoo that will pay off in 10 years. In the meantime they can pinch pennies like the plebes. Like I said, CEOs are greedy egomaniacs. I don’t see very many of them doing this. They **don’t have to** , unlike “the plebes.” That’s the truth of a capitalist system, the rich are going to be able to weather the storms better than the poor–sorry, that’s just the way it is. You can’t change that fact no matter how much you want to, degrading the management quality of a company is no way to improve the company. These guys **can and will walk away** , thousands of their employees cannot. ---
**Author:** ![ivylass](https://avatars.discourse-cdn.com/v4/letter/i/9de053/32.png) [@ivylass](https://boards.straightdope.com/u/ivylass)\ **Post date:** [February 4, 2009, 5:50pm UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/48 "2009-02-04T17:50:17Z")
Are we going to cap the top salaries all industries that get a bailout…the auto industry, the real estate industry, etc? I fear limiting salaries is similar to rent control…you create an artifical undersupply/overdemand situation. I would think you would want the best minds at the companies in trouble. If I’m working at Successful Company X for $5.5 million a year, and Needs Help Company Y is begging for my services and waving $6 million a year in my face plus all the free neck massages from Sven that I want, I would consider it. But if Needs Help Company can only offer $500,000, then they’re not going to attract the talent they need to turn their company in to Successful Company Z. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [February 4, 2009, 5:51pm UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/49 "2009-02-04T17:51:07Z")
What some of us on the left believe is that we need a conversation about values and compensation. What do we value? We value the salesman over the teacher and the fireman. We permit the sacred Free Market to make our decisions of value, secure in the certainty that the Invisible Finger is always right. ---
**Author:** ![ivylass](https://avatars.discourse-cdn.com/v4/letter/i/9de053/32.png) [@ivylass](https://boards.straightdope.com/u/ivylass)\ **Post date:** [February 4, 2009, 5:52pm UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/50 "2009-02-04T17:52:30Z")
> [@elucidator](#): > > We permit the sacred Free Market to make our decisions of value, secure in the certainty that the Invisible Finger is always right. **'luci!** You’re coming around! _blows kisses_😃 ---
**Author:** ![Martin\_Hyde](https://avatars.discourse-cdn.com/v4/letter/m/47e85d/32.png) [@Martin\_Hyde](https://boards.straightdope.com/u/Martin_Hyde)\ **Post date:** [February 4, 2009, 5:53pm UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/51 "2009-02-04T17:53:04Z")
> [@elucidator](#): > > What some of us on the left believe is that we need a conversation about values and compensation. What do we value? We value the salesman over the teacher and the fireman. We permit the sacred Free Market to make our decisions of value, secure in the certainty that the Invisible Finger is always right. And who better to make these decisions, the government? ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [February 4, 2009, 5:53pm UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/52 "2009-02-04T17:53:18Z")
[QUOTE=elucidator] What some of us on the left believe is that we need a conversation about values and compensation. What do we value? We value the salesman over the teacher and the fireman. We permit the sacred Free Market to make our decisions of value, secure in the certainty that the Invisible Finger is always right. [/QUOTE] Who exactly should make them then? You? Me? We ARE the market. Should we leave it up to elected officials then to make these sorts of value judgments? What should they base it on? Goat entrails? Feelings? Channeled wisdom from Elvis? -XT ---
**Author:** ![Steve\_MB](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/steve_mb/32/5339_2.png) [@Steve\_MB](https://boards.straightdope.com/u/Steve_MB)\ **Post date:** [February 4, 2009, 5:53pm UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/53 "2009-02-04T17:53:22Z")
> [@Martin\_Hyde](#): > > These guys **can and will walk away**. No, they can’t. A few lucky ones might – if they all do, they glut the market to the point where their compensation gets severely depressed (by their former standards) anyway. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [February 4, 2009, 5:54pm UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/54 "2009-02-04T17:54:06Z")
> [@](#): > > 'luci! You’re coming around! blows kisses Reinstall sarcasm detection software. But I’ll keep the kisses anyway. ---
**Author:** ![Martin\_Hyde](https://avatars.discourse-cdn.com/v4/letter/m/47e85d/32.png) [@Martin\_Hyde](https://boards.straightdope.com/u/Martin_Hyde)\ **Post date:** [February 4, 2009, 5:56pm UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/55 "2009-02-04T17:56:12Z")
> [@Steve\_MB](#): > > No, they can’t. A few lucky ones might – if they all do, they glut the market to the point where their compensation gets severely depressed (by their former standards) anyway. Or they could just sit on the boards of a bunch of other companies, maybe even get a job at some consulting firm; work 1/10th as much and still make more than $500,000 a year. CEOs don’t always jump from CEO to CEO position. When you have millions upon millions in the bank you don’t have to make tough decisions about employment like regular people do. Many of these guys could just afford to _retire_. If you’ve already made $40 million in your career you may not need to work again, especially at 1/10th of your current pay. Most of them can almost certainly sit on the sidelines for a long time. ---
**Author:** ![ivylass](https://avatars.discourse-cdn.com/v4/letter/i/9de053/32.png) [@ivylass](https://boards.straightdope.com/u/ivylass)\ **Post date:** [February 4, 2009, 5:56pm UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/56 "2009-02-04T17:56:29Z")
Sarcasm Detection Software working as designed. Hence the big cheeky grin. 😃 ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [February 4, 2009, 6:00pm UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/57 "2009-02-04T18:00:36Z")
> [@Martin\_Hyde](#): > > And who replaces them? Someone with no experience? How does that affect investor confidence in a company? I don’t disagree that **some** of the current crop of CEOs wanting bail out money were poor managers and probably aren’t good at their jobs. But do you not concede that some companies in bad shape may have gotten there simply because the market tanked and took good companies down with bad? Not all the companies that are going under right now were particularly badly run companies, recessions and economic downturns don’t exclusively fuck over the “evil” or “incompetent” companies anymore than they don’t exclusively fuck over evil or incompetent individuals. What investor confidence are you referring to. These financial experts have trashed that long ago. The market did not tank. The financial pros gamed and twisted it into their piggy bank. They looted it for all it was worth. They deliberately created confusing and complicated fake instruments and sold them around the world. It was not an accident . How can you feel confident in a financial institution that is run by one of those guys. Paulson made 800 million dollars in the mess he helped create. He should be in front on congress not leading a bank. ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [February 4, 2009, 6:04pm UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/58 "2009-02-04T18:04:23Z")
This is such a good idea that I would go so far as to say that it’s essential. The problem is that previously, all the wrong incentives were in place. If we assume that the executives are economically rational, then what they’re seeking to maximize is their own pay, not the well-being of their company. So, in their position of authority at a company, they can be expected to make decisions which may be bad for the company, but are good for themselves. But now, if the company gets too bad and needs government help, they’ll see a sharp decrease in their own salaries, so they have an incentive to make sure that doesn’t happen. Yeah, it won’t do much good for the current crop, but if the policy is maintained in the longer term, it might mean that we end up with fewer companies who need a bailout, since the people making decisions for the company will actually want them to not need bailouts. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [February 4, 2009, 6:04pm UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/59 "2009-02-04T18:04:37Z")
> [@xtisme](#): > > Who exactly should make them then? You? Me? We ARE the market. Should we leave it up to elected officials then to make these sorts of value judgments? What should they base it on? Goat entrails? Feelings? Channeled wisdom from Elvis? … The conversation is begun, your contribution is shrill mockery. It’s a start. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [February 4, 2009, 6:06pm UTC](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413/60 "2009-02-04T18:06:55Z")
> [@](#): > > Who exactly should make them then? You? Me? We ARE the market. Should we leave it up to elected officials then to make these sorts of value judgments? What should they base it on? Goat entrails? Feelings? Channeled wisdom from Elvis? It stopped being the free market when they accepted government bailout money. Now they work for us and have to play by our rules. If they don’t agree to the salary we want to pay them they can go look for another job. [Previous page](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413.md?page=2) [Next page](https://boards.straightdope.com/t/no-bailout-exec-can-earn-more-than-500-000-good-idea/484413.md?page=4)