First, the cap is only on the tax deductability of the first $500k of salary. If a company wants to pay more they can do so but will not be able to expense it.
Second, only 'C' level employees and division Presidents are included.
Third, benefits are not included (ie, options).
Fourth, companies that already took TARP monies are excluded.
Fifth, it assumes that the execs who ran the company will stay with the company. Why would they if they could get exponentially higher pay by jumping to a non-TARP company. Which leads to...
Sixth, how will TARP companies compete for the best talent to replace existing execs if they are limited in the compensation offer?
Right.
I think it is PR and grandstanding on the Pres. part
“Sixth, how will TARP companies compete for the best talent to replace existing execs if they are limited in the compensation offer?”
They won’t, so they will fail. Then all the people who are all for this - including many freepers because the companies are spending our tax money - will get screwed again because the TARP funds will never be paid back. Of course, they never were going to be paid back anyway.
What’s scary is the precedent this sets, namely that salary caps are good. The left is already talking about caps for everyone, recipients of fed money or not. The reasoning is that this will prevent flight of talent to non-capped companies. The reality is that this wil utterly kill what is left of the economy...