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President Barack Obama kicks off a campaign to rein in corporate compensation with rules limiting executive pay to $500,000 a year for companies getting taxpayer bailout funds in the future.
Obama, who sharply criticized Wall Street chiefs for accepting billions of dollars in bonuses last year while the economy fizzled, had promised compensation reform as part of a package of stricter regulations on the financial industry…
An Obama administration official said the new rules would require companies that get exceptional government funds — such as financial giant Citigroup and insurer AIG have in the past — to abide by the cap.
Additional compensation must be limited to restricted stock that does not vest until government money is paid back with interest.
Companies that have previously received bailout money would have to agree to stricter oversight and prove that they have followed already established restrictions on executive compensation, which are widely seen as being too lax…
They will also put restrictions on golden parachutes — the lavish severance packages common for senior executives — and require more transparency for costs such as aviation services, big parties, office renovations and conferences.
Do you think executives of the corporations receiving bailout bucks have been earning their salaries, bonuses, perks? Think their payscales should remain unchallenged?
Paddy, the only thing I have seen many times on this blog on this issue is you reposting the conclusions you just have above.
I have stated CEO pay is completely controlled by the Articles of Incorporation which are controled by the State of Incorporation.
There are no constitutional rights involved.
Post a relevant link contradicting this, or give us your line of reasoning that suggests an alternative, or kindly STFU.
#58 “..What the hell, does he think he can dictate to anyone what their maximum pay should be?..”
Before republicans go on your usual tirade filled with much belly aching and zero ideas, Obama has the right to get something in return for a government bail out.
Again, just step aside and quit your whining. My God, it’s annoying. Isn’t there some sex scandal somewhere to keep you guys busy while liberals fix this mess?
Stupidest concept of this administration yet.
1) All of these companies are smart enought to defer the compensation somehow.
2) If you actually want these companies to succeed, you can’t expect them to do so facing non-bailout competitors paying 10x this wage. They will only be able to attract lower echelon ceo’s.
I doubt if this will be the last poorly thought-out idiocy of this infantile administration.
#67 I’d like to know how some schmuck named “Montanaguy” blogging on Dvorack.org using his work computer claims to outsmart an army of well recognized economists working on this problem.
Again, more bullshit whining from a party with no ideas and part of the problem.
Where do you live? I want your address so I can punch you in the neck.
# 66 Dallas said, “Obama has the right to get something in return for a government bail out.”
That’s right. If they went into BK a judge could do the same thing.
To reaffirm–Constitutional Rights are non-existent in this area.
Apparently in your world, people shouldn’t have the right to freely enter into contracts either. If you and I establish a firm together, incorporate that firm, and hire somebody to run things for us, it should be none of the state’s business how much we decide to pay him as long as it is decided within the confines of the contractual terms of our incorporation.
#66, Obama has the right to get something in return for a government bail out.
No disagreement from me. It’s the suggestion by people like bobbo that salaries should have a ceiling placed on them across the board is where I object.
@Bobbo
“do you need to see before you recognize we “all” have an interest in how businesses are run”
I only have an interest in how the government runs. If that is done well then everything else falls into place.
Citi Group is large company has bought other banks and insurance companies, gutting jobs and moving them away from their customer base into centralized locations where isolated from their customers, do a great job of providing poor customer service and inflexible services.
Then their world collapses and they need a bailout.
Assuming the statements above are correct, what would your action have been? They should have received “stimulus” in the form of the government buying some of their debt at a big discount during Citi Group bankruptcy and reorganization proceedings.
Instead, our Congress had an “urgent” need to quickly pass a fat $700 billion bill to be overseen by a president whose term is about to expire.
Now we should be worrying about Citi Group compensates their executives?
We just converted a failed business damaging to the US economy long before the current crisis into a government-favored corporation.
bobbo…exec comp plans are often objective-based. Profit is one objective. Maybe the CEO misses the corporate profit objective, but that doesn’t negate the achievement of other objectives and the % of bonus tied to them.
#70–SL==rarely have you posted so insipidly. There are three parties to every contract==A + B + The Government. Thats what makes contracts legal vs illegal, enforceable and what not.
You can argue all day long what the law “should” allow contracting parties to do and that is fair enough. Stupid to confuse what you might prefer with what the law actually allows.
#71–HMyers==I’m having trouble seeing exactly what your question to me is. I don’t fancy myself expert at all, much less someone knowing what “should have” happened during the Bush/Paulsen meltdown recovery plan and its too easy to fill in with hindsight.
Certainly, getting value for what is advanced seems a base line–ie, no free bailout but rather loans secured by equity positions seems too basic to ignore. Requiring complete transparency seems like a minimum requirement. Issuing funds and modifying the plan as reality dictates makes sense–ie, at least Congress only issued half the funds rather than all of them as the TheifinChief initally requested. That being the case, the second half of the funds should not be issued without a clawback of irresponsibily issued funds.
Changing the way ALL EXECUTIVES ARE PAID is NOT ABOUT the money they get paid which is peanuts. IT IS ABOUT the incentives to destroy a company/industry that those same pay standards encourage. Incentivize GREED and you shouldn’t be surprised by what GREEDY people do.
Change the incentives to be a CEO and you change how business is practiced in the USA. Don’t change them and we’ll just have more meltdowns.
The cry of “we need the best qualified people and they won’t work for respect, honor, and $500K per year” is the statement of a crack addict. Total BS. Think that way and I do positively hope you establish your “business” overseas. Get the hell out!!!!!
#72–olo==what would those other objectives be? Again==I’ve never seen a bonus program that wasn’t BASED on exceeding expectations.
Thats why I would like to see the bonus program in place at Merryl/Lynch. So–a common element would be the opening of new accounts, retention of old ones, reduced employee turn over, etc. Yes, I can “imagine” elements of a bonus program==but all of them conditioned on the Company/Division exceeding profit estimations.
Have YOU EVER seen otherwise?
#18 – Named,
Also… please remember everyone that the US is NOT a “capitalist” system but a corporatist one. Very important denotion.
Excellent point.
#20 – Paddy-tr0ll,
Dare I ask how you see it otherwise?
#24 – Paddy-tr0ll,
Do you know what CAPITALism is? Hint. Nothing to do with free market enterprise.
Apparently, according to you and you alone, it has a lot to do with the caps lock key on your keyboard.
#29 – Neo-Postdarwinst Ben,
I disagree on so many levels. If your company is being bailed by the government then executives should not just have a limit on their sallary [sic], they should forgoe [sic] their salary entirely until they fix their business. Just like when you are starting a business … you don’t make any money until you make some money!
Good point, but get a spell checker.
If your company isn’t being bailed out, then its up to your shareholders. All a limit on executive salary’s would do is move executives out of US… cause whats the point of running your own business if there is a limit on how much proffit [sic] you can make out of it!
I don’t agree with bobbo about a limit on all exec salary. However, to play devil’s advocate here, executives do not own the business, shareholders do. CEOs and other execs are mere employees. They are not actually entitled to any of the profit. Shareholders may give them an incentive based on the profit, which is different.
bobbo, if we were to limit all executive salary, I would prefer to make the cap a multiple of the salary of the average worker. This would give incentive to pay a better salary all around, instead of only to the
leeches *executives at the top.* Sorry for insulting leeches.
#32 – chuck,
I think the pay that some CEOs make is obscene. But a CEOs pay is not the reason their companies are going bankrupt.
No. It’s not because of the salary. It’s because they personally ran the company into the ground. The CEO is, by definition, responsible for the actions of each and every one of his employees and is responsible for the company as a whole, with the exception of any covert and subversive actions taken against a company by employees.
As long as all employees are doing their jobs per their job descriptions and in line with company policy and stated goals, the CEO personally is responsible for the work done. Therefore, it is because of the CEOs, the policies that they set, and their personal actions under the corporate umbrella, that these companies went bankrupt.
There are real people making stuff happen (or not) within a company. A corporation is not a life form.
@Bobbo
“Requiring complete transparency seems like a minimum requirement.”
Even auditing firms take months to make sense of corporate finances, and they have access to everything.
“Changing the way ALL EXECUTIVES ARE PAID is NOT ABOUT the money they get paid which is peanuts.”
I agree with the peanuts thing.
“IT IS ABOUT the incentives to destroy a company/industry that those same pay standards encourage.”
These gigantic financial businesses are built around a single objective: buy or destroy all competition to establish a non-competitive environment where only giant non-responsive companies exist.
And it never works.
But that is the business these companies are in.
Nothing you do with executive pay is going to change that.
They need to change the laws to prevent the formation of companies that reach a size that they no longer have any hope of competing in quality, performance and services.
It worked with AT&T for about 20 years until we had an administration that didn’t care about anti-trust.
Corporations naturally don’t want to compete. That is the dream of any executive. We need a government that protects us from non-competitive situations, which destroys jobs and communities.
I think its brilliant
It will stop any one from taken help if they don’t really need it.
It’s an incentive for these CEOs to get their companies off the dole fast or just let them crash if they’re not really viable and move on. To bad we can’t make it retroactive to be a stipulation on the money that the Busheys handed out.
How many of these CEOs have been complaining about government waste all these years?
# 78 hidden agenda said, “To bad we can’t make it retroactive to be a stipulation on the money that the Busheys handed out.”
Talk to Pelosi. Her guys in the House originated that bill.
#43 – Named
Author of the quote: Pat Caufield of the Department of Education in a satirical United
States who started a re-education program for kids to prepare the transition to communism
http://tinyurl.com/co9qys
Sorry I couldn’t find it on snopes.
Obama is doing the right thing.
If you take money from the government (public) to save your failing business, there should be a limit on your salary.
Anyway, $500,000 a year is not a bad salary – there are a lot of talented people that will be happy to have this kind of money and a challenging position such as a CEO of a big company – especially young people.
Whoever will succeed in moving his company out of this crisis and will repay the money to the Public, will be worth in his next job much much much more money anyway.
#58 – Mr Diesel,
What the hell, does he think he can dictate to anyone what their maximum pay should be?
Nope. Only the ones who take their salary from the public coffers now that they bankrupted the companies.
#59 – Hmeyers,
And what you do care anyway unless you are a major shareholder?
I care because it’s not the shareholders paying the salaries anymore. They paid until they went bankrupt. Now, they are on the U.S. Government payroll. When they get off of it, they can go back to conning their boards of directors into giving them ludicrous salaries once again.
#67 – Montanaguy,
Stupidest concept of this administration yet.
1) All of these companies are smart enought [sic] to defer the compensation somehow.
2) If you actually want these companies to succeed, you can’t expect them to do so facing non-bailout competitors paying 10x this wage. They will only be able to attract lower echelon ceo’s.
1) That’s fine. Let them defer it until they can pay it instead of the Federal Government.
2) They competed at high salaries last year. Obviously, they got top echelon talent then. Fat lot of good it did them.
Give the $500K/yr salary to a member of the custodial pool who will be happy with it. I doubt s/he can do much worse. This sorry lot has already bankrupt the company and caused severe damage to the global economy.
Upper echelon indeed.
# 83 Misanthropic Scott said, “Nope. Only the ones who take their salary from the public coffers now that they bankrupted the companies.”
Correct. They can always refuse the $ and go the BK route.
You know . . . we wouldn’t be arguing about this if the government hadn’t given them the money in the first place.
So, while we’re arguing over a couple billion dollars, the Senate is about to approve 350x that . . . again.
Yeah, Obamessiah has got some smart guys working for him. They managed to deflect the entire argument about the bailout into a flare-up against the CEOs. Smart indeed.
Neo-PostDarwinist Ben,
My apologies. I just remembered an earlier post by you regarding spelling. I will refrain from criticizing you on it again. My mistake entirely.
#87 yeah, sure..
How quickly you schmucks forget Bush’s $168B “help my shitty approval stimulus package” in February of 2008.
There went $168B down the toilet and you fucktards are complaining now when something real is being done about the economy?
What’s your address?
# 89 Dallas said, “There went $168B down the toilet and you fucktards are complaining now when something real is being done about the economy? ”
ROFL! Apparently, you haven’t read the “stimulus bill”.
Real? ROFL!
#87 – you mean the one that was voted for by our current Chimperer-in-Chief? But that was just a warm up for the one this last Fall.
something real is being done about the economy?
As Paddy-o said . . . you really need to read the bill if you think it’s doing something constructive.
What’s your address?
How does it feel to challenge someone on an open forum knowing that no one of average intelligence or higher will post their address in that fashion?
Does it give you a spurious sense of manly esteem?
#90 – Paddy-tr0ll,
When will you realize that rolling on the floor drooling all over yourself is not an argument. It just makes you look like a fool.
Here’s a link to an article with the full texts of both the senate and house bills. Knock yourself out reading them.
When you have a particular paragraph or several hundred about which you would like to make a point, consider posting them. Otherwise, as many have told you for months, STFU!
http://tinyurl.com/alqfxs
This is BS if you’ll pardon my digression, I dont give a shit about what some pig CEO makes. I want to know why the bailout money is given without conditions. Banks should get the bailout but with conditions on how that money is to be used and audits to make sure it is. Controlling what the CEO makes isn’t going to help the economy. It’s a distraction, damn it! I guess my honeymoon with Obama’s over.
# 92 Misanthropic Scott said, “blah”
I read it before it voted on in the House. As I posted earlier. Less than 20% of the total is directed towards job creation of infrastructure projects.
Since it’s clear that you haven’t read it, I suggest you do before trying to defend it. Or, is that too logical for you to grasp?
#91 . . . um, ah, that should have been directed to #89, not myself.