Posted on 02/04/2009 11:23:21 AM PST by Oldeconomybuyer
The new pay cap for some of America’s top bankers is rooted in the short-term exigencies of a government bailout, but it also may signal a turning point that affects executive pay for years to come.
On Wednesday, President Obama put a $500,000 limit on annual pay of bank executives whose firms receive government assistance during the financial crisis.
But he also said the new guidelines are “only the beginning of a long-term effort” to realign the way business leaders are paid, beyond the banking industry and other firms getting bailouts.
The announcement comes at a time of public anger about the meltdown of a once-strong financial industry, and as the Obama administration is about to unveil additional bank-rescue plans that are likely to cost taxpayers more than the $700 billion already allocated by Congress.
It also comes as many investors and financial executives say that reformed pay practices need to be part of any long-term solution for the industry’s problems.
“There is a serious problem with compensation [in the financial sector],” says Charles Elson, director of the University of Delaware’s Center for Corporate Governance. Top bankers “convinced the world that they were the smartest human beings on the face of the earth…. It turns out they weren’t all that smart.”
The financial sector has moved to the forefront of the long-simmering national debate over executive compensation, largely because it is receiving the greatest government assistance. But what happens in that industry could set trends that will affect others.
[snip]
(Excerpt) Read more at features.csmonitor.com ...
I’d like to end the era of excess, too. I think public “servants” like the Clintons, Daschle, and some day the Obamas, aren’t allowed to sell access and become millionaires when they leave office.
So......what is to stop these outfits from moving their corporate headquarters to the Caymens, Switzerland, etc????
The government has no right to lend money to private businesses. This is unconstitutional.
What in the Constitution gives Congress or the Presdient the authority to “bail out” banks in the first place?
(Plus, most corporations are created under State law are they not?)
If you are saying the “bailouts” shouldn’t be happneing in the first place then we are in agreement on that point.
Happiness is a warm gun.
This is all a diversion, with the Federal government kicking up dust in an effort to deflect or obscure the cause of this melt down, when in reality, the Federal Government is the most corrupt of them all, and is the cause of this epic disaster.
Interstate commerce clause!!! As to corporations. As to the tarp, bailout should have never taken place!
If that thing were a burro it would have died from exhaustion decades ago.
How about capping the fees that former members of Congress get as lobbying and consulting fees and speaking fees? How about capping the amount that a current member of Congress can take from their trust funds?
This proposal seems like a slippery slope. Suddenly anyone who has any affiliation with these banks or companies will be held to the same rules. How will Katie or Brian or any of the other “news” faces feel, if they are suddenly capped at five hundred thousand dollars?
Don't trust them as far as I can throw them.
I agree with you 100% on this.
But, those count as entitlements not regular pay.
Exactly and why aren’t these corporations fighting?
Good question. It doesn’t make sense.
Good for you Mr. Obama, good for you.
I don’t see why wall streeters would whine over this, they’re still getting more than what their H1-B visa replacements will recieve.
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