“If they limit pay, how does a company attract competent people to clean up the mess and take it in new directions? New people aren’t going to give their work away for pennies on the dollar... “
If you are tens or even hundreds of billions of dollars in the hole, you give up the right to attract top talent with exorbitant salaries. They take the bailout loans with the conditions and do the best with what they get or they file Chapter 7 and liquidate...it’s that simple.
If the top execs making 500k a year turn the company around and regain profitability, they can then (after paying the tax money back) offer incentives as they please based on their good performance. They can’t do this beforehand.
If I am a desperate small business owner with a track record of years of mismanagement and huge losses, no bank in their right mind would just give me a huge loan with zero questions asked. No venture capital firm would dare do that either. They would impose serious restrictions and most certainly would impose salary parameters as protection on their investments. The tax payers should expect the same.
There is the law of unintended consequences. 500K might seem reasonable to you and me, but it may not be acceptable to people that are having the restrictions placed on them. You might have personel in a really profitable divison of the firm bolt for the exits with the firms clients...