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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?
#125–Sea Lawyer==I withdraw. You very obviously can’t understand the distinction between a corporation and a natural person. I’ve told you the difference 3 times and you continue to confuse the issues.
A CEO is a legal construct who’s position is filled by a natural person but the CEO’s rights and duties are subject to statute==not the Constitution.
Its simply “not interesting” to discuss the more challenging issues without this foundation being understood.
If you have any further relevant questions, please ask and I’ll answer if I can.
To your irrelevant question==the stockholders. They can be natural people or corporations. Articles of Incorporation set forth their rights as well.
OMG. I just realized it’s almost the first thursday of the month and Obama hasn’t fixed the economy yet.
No wonder, Paddy-O’s facebook friends are fleeing for the next quick fix solution.
I hear Joe the Plumber has great stimulus ideas under way. He’s talking it over with Palin and Susie at the donut shop.
# 126 bobbo said, “A CEO is a legal construct who’s position is filled by a natural person but the CEO’s rights and duties are subject to statute”
Actually not. I can open a popcycle stand and be the CEO and my rights and duties are no more subject to statute than before I opened the stand.
# 127 Dallas said, “blah, blah, blah,”
Have you read the House version yet?
#129 Nope, I have not read it “yet”.
Unlike you and the rest of the wannabe economists in here, my role is to grade the results and not propose the medicine.
Bush got an F minus and expelled for fraud and lying. I have faith Obama will do much better.
# 130 Dallas said, “#129 Nope, I have not read it “yet”. ”
Then what are you babbling about?
Bobbo, you seem capable of going beyond the caricatures and stereotypes. Try reading up a little on Marx. The best in depth book is still Thomas Sowell’s from over thirty years ago. For some shorter stuff try:
http://tinyurl.com/aa9xof
#132–Thank you Mike. Marx was actually one of the first “Important Books” I ever tried to read. I was blown away with the notion that someone would actually think and write about classes/conditions/functions of man–whole new concept to me. It got too deep for me real fast.
I wonder how many books ever written really have more to say than what can/should be captured in 1-2 pages? We think in sentences, I would think 1-2 pages would be a full meal==but we get 100’s of pages instead to what avail except to make the ideas inaccessible?
Can you whet my interest? In 1-2-3 sentences tell us what Marx has to teach/demonstrate/explain to us that is worth the time to understand?
#132– Mike == hahahah. Ok, scratch that. Excellent Summary at your thoughtfully provided link. Some other good reads there as well.
Thanks–and keep that good stuff coming.
I see that the intellectually lazy liberals (Dallas, #1)are still as hostile as ever, even after putting their child messiah into office, on false pretenses. Only in a borderline-personality liberal mind could “give me your address, so I can punch you” pose as commentary. Dallas, put down the Milltowns or whatever is making you so hostile and take a walk.
@ Paddy-O
You must really give Obama some major credit.
He has managed to totally misdirect and please those who judge ideas not on substance but on the basis of emotional appeal. What this has to do with stimulating the economy, I don’t have the slightest idea.
This occasional misdirection will allow him to pursue reasonable policies because he can throw in a little red meat here and there to otherwise please people who his policies won’t fully satisify on substance.
Rest assured, there will always be someone willing to do the job for $500,000 a year, though. At a minimum, upper levels of management will see some new blood.
#120 Bobbo- I’m still not sure how my source is biased. She is going to BENEFIT from the shuffling of execs. Her bank clients did not take bail out funds and they have already been approached by execs who are ready to bolt. My original point was and still is that I don’t think this is going to help these companies rebound if they are shackled with an executive wage freeze. It makes for good rhetoric though.
@ Robart
“Her bank clients did not take bail out funds and they have already been approached by execs who are ready to bolt.”
I am convinced that Obama thinks through most of these actions.
I think he wants to see some younger and newer people in management and these companies.
#105 – Paddy-tr0ll,
BTW Scott. There IS some cool stuff in the bill. Just not near enough and, WAY to much Hormel.
For the record, I have not defended the idea of the bailout in any way. I have very mixed feelings about it. On the one hand, I’m morally opposed to the idea. On the other, we have to do our best to save our economy.
What I have objected to, however, is your complete and utter disregard for any attempt to actually make a point. You repeatedly make off the cuff remarks without any attempt to back them up in any way.
This is what makes you a total and complete troll.
If you claim that only 20% is going to create jobs, please, by all means back up your claim. You may indeed be right. However, you flatly refuse to make any attempt to prove it.
You are among the worst debaters I’ve ever come across.
I doubt you have read the 680 pages of the house version or the shorter version with any more attention to detail than that with which you have read my posts. Your horrifically bad reading comprehension, as evidenced by your repeated misreadings of my posts, does not exactly inspire confidence in your opinions. When coupled with your unwillingness to back up your claims, you simply come across as a moran.
If that is OK with you, keep going. If not, you may want to work on this.
#122 – Sea Lawyer,
#109, No, the corporation is not a natural person, but the people who own/established it are. They have every right to decided how much the guy they put in charge of running things gets paid.
As long as the corporation is actually footing the bill, you’re right. In this case though, the government is footing the bill. So, why should a corporate CEO make more than the POTUS when both are drawing their salaries from the same pot of money, i.e. our money?
If you’re arguing only with bobbo’s point about limiting all executive salary, you make a point. If arguing about Obama’s policy of limiting the salaries of the executives of the recipients of the stimulus package checks, check again who’s paying the bills.
It’s called the power of the purse strings.
#137–Robart==you say: “My original point was and still is that I don’t think this is going to help these companies rebound if they are shackled with an executive wage freeze.” /// And my point is just the opposite that I think finding CEO’s who are focused on their JOBS rather than their own personal bonus program would be a nice fresh breath of air. You have to be a bit nuts to think there aren’t very intelligent motivated competent and experienced people ready to do a good job for up to $500K. Now, any of those people would be more happy to do the same job for 40X more money==but then would the corporation really get the same attention?
Its a philosophical question that can be argued either way. If you can only argue one side of the question==you are unqualified to argue either side.
#128, Cow-Patty,
# 126 bobbo said, “A CEO is a legal construct who’s position is filled by a natural person but the CEO’s rights and duties are subject to statute”
Actually not. I can open a popcycle stand and be the CEO and my rights and duties are no more subject to statute than before I opened the stand.
We have been down this so many times I lost count. Repeatedly you have been asked to back up your assertion that Congress does not have the right to regulate commerce. You can’t. Why? Because Congress does have the right.
How they use that right to regulate commerce is up to them. It doesn’t matter if they get to decide if every tomato grown in the country must be inspected, or every company must pay a minimum wage (or less that a maximum wage), or comply with health and safety regulations. Commerce is Congress area.
What the eff is a popcycle? Is that anything like a bicycle?
#131, Cow-Patty,
# 130 Dallas said, “#129 Nope, I have not read it “yet”. ”
Then what are you babbling about?
Let’s see, which part of the bill do you specifically object to. Please cite the exact paragraph.
Simply put, I know you didn’t red it. You have heard your icons on the FOX SPEWS shows deriding it. And they haven’t read it either.
#137, Robert,
If you ran a bank or finance company and someone came knocking they wanted a job you would look at their resume. If they come from another bank that was driven into the ground then why would you want this person?
They have experience in bad business habits. If they received bonuses and are looking for more bonuses then they won’t really looking out for you, their potential employer. They would be a very bad risk. Or should be.
The healthy banks stayed away from all that bad paper. They will stay away from people looking for jobs that previously handled it too.
#122, SL,
#109, No, the corporation is not a natural person, but the people who own/established it are.
Regardless of what kind of people establish a corporation, the corporation is still not a natural person and as such may be regulated by Congress.
The only thing I can possibly think of to support you claim of legitimate power to put a ceiling on salaries … would be if you could somehow establish some relationship between executive salaries and the liability protection the government grants to the corporation’s owners.
Actually, no. The Commerce Clause in the Constitution gives Congress the authority to regulate commerce. Almost since the beginning of the nation, the Supreme Court has ruled that that authority is near unfettered.
It has long been realized and accepted that Congress has the authority to assert a minimum wage. It is not a long stretch to assert they would also have the same authority to impose a maximum wage.
#132–Mike==read over half the summary at your link. Its good to be refreshed on these important ideas in the History of Man.
Right off the bat, I would have put Marx in the Late 1800’s maybe even early 1900’s but he wrote in 1847–at a time when slavery was extant in the USA and many would not even call the USA a real democracy.
As is true of much of what we think, the author notes that “a great many modern economists attribute to Marx positions he expressly did not advocate.”
Perhaps best summed up in the analogy that Marx is no more responsible for Communism than Jebeesus was responsible for the Inquisition.
Good Stuff. Thanks Again.
# 139 Misanthropic Scott said, “If you claim that only 20% is going to create jobs, please, by all means back up your claim. You may indeed be right. However, you flatly refuse to make any attempt to prove it.”
Scott. I’m trying to get you off your butt and read. You’ve proven time & time again that you lack any education above that of a 6th grader.
You never heard of the laws of thermodynamics. You didn’t know what voltage was. Sorry, since you have the education level of a child, I treat you that way. I won’t give you the answers. I’ll point you toward a lesson. You’ve got to do the study.
Having TAX CHEATS like Timothy Geithner look over us is change we can believe in!
Sure, reign in the CEO pay…why not? It makes the rubes feel good about themselves.
#147 Paddy-tr0ll,
You’re far and away the worst troll on the site.
You claim to have an education and to know stuff and we’re all just supposed to take it at face value.
You deliberately misread and misinterpret post after post after post. You make ridiculous claims about my level of education.
I know and knew plenty about the laws of thermodynamics, just not the year of their origin, since I am more interested in science than history.
You made one point one time about transformers, not about voltage you freakin’ moran and are harping on it to death. Perhaps this is because you have completely and utterly failed to make any other point despite thousands of posts on this blog.
Meanwhile, you still have completely and utterly failed to understand that scientific laws are no more irrefutable than scientific theories, despite the fact that Newton’s Laws are incorrect for vast swaths of the universe and that evolution has never seriously been questioned.
You are unaware that the theory of evolution and the theory of natural selection are different. You are unaware that the former predates Darwin by quite some time and is utterly unquestioned since at least the time that Darwin came up with a theory to explain the mechanism of evolution, known as the theory of natural selection, and possibly since before that.
You make wild claims all the time and expect to be taken at face value, presumably because you are the employee of the month at your local Radio Shack. If you have any other qualifications, they certainly don’t come across from the choice to be an anonymous blogger.
This is why those of us who choose to blog anonymously and want to be taken seriously post links.
Since I know you are incapable of reading even a simple blog reply and not getting it completely and utterly wrong, I have no expectation that you can do any better with reading a 680 page legal document.
So, I say again, if you want to be taken as anything other than the utterly ridiculous troll that you are, you’ll stop rolling on the floor drooling and start substantiating your claims.
For my part, I am not that interested in the intricacies of the stimulus package, and so, will not read either of the bills in their entirety. For your part, it doesn’t matter if you did since we have seen the evidence of your reading comprehension skills, or utter lack thereof.
I have not defended the stimulus package in any way, if you take the time to read the damn thread. What I have done is to call you a troll for flatly refusing to back up your claims. Telling me that you are trying to educate me is just code for the fact that you’re a lazy bastard who makes wild claims and consistently fails to put any meat behind them.
You sir or madam are a troll.
Would you like me to back that statement up with links to other threads? Would you like me to re-refer you to your thread where you couldn’t even remember your own stupid claim about the difference between a scientific theory and a scientific law, which was shown by many replies on the thread to be a matter of insignificant semantics rather than one of substance?
#147, Cow-Patty,
You never heard of the laws of …
In other words, you haven’t read the bill and can’t point any specific portions that do or don’t do something. You have been caught trolling for, what, the 1,806th time? And you even particularly good at it. More aggravating than anything else.
I’m sure that Scott, who unlike you, is employed, has enough reading in any given day to do. Suggesting he is now responsible for reading (what I understand to be) a 680 page bill is ridiculous. He asked you to provide specific areas where your concern were so he could follow up.
Your castigation of Scott really dampens any idea that you are a “CEO”. Any executive that understands efficiency knows that he does not want to read the entire subject, just give him the summary. Especially a 680 page document. But no, you tell us that not only have you read it, but everyone else should too.
Maybe you do have your own Popsicle stand. That would certainly explain all that free time you have to read 680 page documents as well as troll the internet. It must pay well too, all the Red Popsicles you can eat. Oopps, my bad, they should be popcycles, retarded form of a bicycle.
I love the wiggle room put into this
“…would require companies that get exceptional government funds…”
What is the definition of “exceptional” funds? $50b? $50m? Maybe no one gets capped unless their bank is given $400b.
No matter the party, politicians are slimy.
Just as a sidenote – this limit on pay does not apply retroactively to companies like JPMorgan, Chase, GoldmanSachs unless they ask for more. It also only applies to “top executives.”
“The limits aren’t retroactive, meaning firms that have already taken government money won’t be subject to the restrictions unless they have to come back for more..”
From Bloomberg: http://tinyurl.com/chqhdv
#144 Mr. Fusion – Why is it axiomatic that the CEOs are responsible for the melt down? How many CEOs were hired after the pin on the Freddie and Fannie hand grenade was already pulled? These companies were not necessarily “run into the ground”. They were bitten, like many small companies, by the subprime lending snake. I’m not exonerating them for all of their decisions but I bet their are many knowledgeable and very hireable (I know that is not a word) CEOs that will command a salary about 500k in this bunch.
I take no solace in thinking these guys are getting punished by the 500k salary cap. They are going to do just fine.
#153, Robert,
Why is it axiomatic that the CEOs are responsible for the melt down?
They are the ones that draw/drew the big bucks. They were in charge. They encouraged the writing of the bad loans, if not explicitly, then implicitly. When things were good, they asked and received big bonuses because the bottom line was inflated.
How many CEOs were hired after the pin on the Freddie and Fannie hand grenade was already pulled?
You tell me. Second, almost all of the bad loans the FMs took came from the investment banks doing.
These companies were not necessarily “run into the ground”. They were bitten, like many small companies, by the subprime lending snake.
Which they helped perpetuate and encourage.
I’m not exonerating them for all of their decisions but I bet their are many knowledgeable and very hireable …
There is an old saying that explains this quite well,
“You sleep with dogs, you get fleas”.
That is the problem with being an individual in a corporation. You almost always end up wearing the corporation’s reputation with you.
#153–Robart==The law used to require, and everyone agreed it was a good sound policy, that the funding reserve for home loans for banks could be leveraged 20 to 1.
Then the Government made changes that removed this requirement.
Two banks look at the new regulatory environment and CEO A says “its time to make money while the sun is shining” and he leverages the banks lending assets up to 50 to 1.
CEO B says this is risky business–we are only going to leverage up to 25 to 1 for special cases.
15 years later==all the CEO A type institutions are bankrupt and all the CEO B type Banks are healthy and doing well.
Who would you “blame?” Who would you “reward?”
If CEO A types were motivated by the increases bonuses they could earn for a few years while risking the banks assets===how would you regulate against this inherent mismanagment driven by CEO greed?