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Thread: Obama to cap exec pay at $500,000

  1. #1
    Vulture of The Western World Eric's Avatar
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    Obama to cap exec pay at $500,000

    As reported today, Barack Obama is expected to announce Wednesday a series of new pay limits, including those for executive pay, for companies receiving significant amounts of bailout money. Obama is scheduled to make the announcement alongside Treasury Secretary Tim Geithner at the White House.

    While specific details regarding the type of pay limits that the Obama administration plans to set have so far been vague, the New York Times is now reporting that top executives may see their pay capped at $500K:

    The Obama administration is expected to impose a cap of $500,000 for top executives at companies that receive large amounts of bailout money, according to people familiar with the plan.

    Executives would also be prohibited from receiving any bonuses above their base pay, except for normal stock dividends. [...]

    Crucial details remained unclear on Tuesday night, including whether the restrictions would apply to all companies that receive money under the so-called Troubled Asset Relief Program, or TARP, or whether they would apply only to the "exceptional" companies that were being rescued from collapse.
    The Times article has more on which executives could come in for big pay cuts.

    The Wall Street Journal, which also reports the $500,000 figure, has more details on the plans:

    The Obama administration also plans to bar chief executives of such firms from receiving severance payments. And it is expected to require that firms receiving taxpayer money give shareholders more say in how top executives are compensated, according to people familiar with the administration's plans.[...]

    The administration's tighter restrictions won't apply to any of the existing financial-rescue programs, including Treasury's $250 billion effort to inject capital into banks. But as the administration prepares to launch the second phase of the financial bailout, it is promising to impose stricter rules for any firms that get taxpayer money.

    Speaking on NBC Nightly News Tuesday, Obama repeated his criticism of the industry's payments, saying: "If the taxpayers are helping you, then you've got certain responsibilities to not be living high on the hog."

    More details on what the administration may unveil, from the AP:

    Administration officials have said that the new restrictions would apply only to those struggling large firms that receive "exceptional assistance," such as the American International Group Inc., Citigroup Inc., and Detroit automakers. They would not apply to healthy banks that receive government infusions of capital.

    And Obama's chief economic adviser, Larry Summers, has proposed that firms that want to pay executives above a certain threshold would have to compensate them with stock that could not be sold or liquidated until they pay back the government funds.

    Top officials at companies that have received money from the government's Troubled Asset Relief Program already face some compensation limits. But elected officials want to place more caps, a sentiment reinforced in recent days by revelations that Wall Street firms paid more than $18 billion in bonuses in the midst of the economic downturn in 2008.

  2. #2
    Senior Member Mase's Avatar
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    More class warfare, envy and greed.

  3. #3
    Vulture of The Western World Eric's Avatar
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    Quote Originally Posted by Mase View Post
    More class warfare, envy and greed.
    There's no justification for paying the CEOs of failing companies millions annually. But so long as these are private companies, it's not a question the government should be involved in. Pay ought to be performance based - and up to the board/shareholders.

    However, if we taxpayers are going to be forced to subsidize GM, for example, then it's outrageous that we be forced to subsidize the high-rolling lifestyle of GM executives. $500k to run a business into the ground is still too much. These ass clowns aren't worth $40k per year.

    If that.

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    Quote Originally Posted by Eric View Post
    There's no justification for paying the CEOs of failing companies millions annually. But so long as these are private companies, it's not a question the government should be involved in. Pay ought to be performance based - and up to the board/shareholders.

    However, if we taxpayers are going to be forced to subsidize GM, for example, then it's outrageous that we be forced to subsidize the high-rolling lifestyle of GM executives. $500k to run a business into the ground is still too much. These ass clowns aren't worth $40k per year.

    If that.
    You have that right. I think that since public money is being used for this, that the salaries ought to be capped. I think that they should be paid what a comparable CEO makes in China.

    I heard this being compared with the 55 mph speed limit, with the government withholding funds from states that fail to comply. That's a bad analogy. The 55 mph speed limit was forced on the states by a federal government, big, fat and out of control. To add insult to injury, states are required to collect gas taxes for themselves and the Federal government. In return, for every dollar they collect, they get anywhere from 60 to 85 cents in return. Sounds like a pretty lousy deal to me.

    That is way different than a bunch of money shysters in line for our taxpayer money. They should be made to beg for it, not collect $500k.

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    Vulture of The Western World Eric's Avatar
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    Quote Originally Posted by swamprat View Post
    You have that right. I think that since public money is being used for this, that the salaries ought to be capped. I think that they should be paid what a comparable CEO makes in China.

    I heard this being compared with the 55 mph speed limit, with the government withholding funds from states that fail to comply. That's a bad analogy. The 55 mph speed limit was forced on the states by a federal government, big, fat and out of control. To add insult to injury, states are required to collect gas taxes for themselves and the Federal government. In return, for every dollar they collect, they get anywhere from 60 to 85 cents in return. Sounds like a pretty lousy deal to me.

    That is way different than a bunch of money shysters in line for our taxpayer money. They should be made to beg for it, not collect $500k.
    A-men!

    I have parted ways with many of my "conservative" friends/responders over this and related issues because they continue to operate on the premise that we live in (their) idealized "free market" - an economic Fantasy Island where opportunity abounds equally and merit rules and all you have to do is roll up your sleeves and pull yourselves up by your boot straps and you too can be a Big Success!

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