I agree. The bailouts were of course a bad idea to begin with and should be frozen ASAP. However, the bailouts are a reality for the time being and it seems right to me that executives feeding at the public trough should have strict limits placed on their compensation. Only after they have stopped collecting public money are they entitled to whatever pay is approved by shareholders and the board of directors. And in fact strict limits on pay is a good motivator for these executives to put their businesses back in order and stop begging for public funds, even if its not as good of a motivator as ending the bailouts immediately.
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?