Is a $500,000 pay cap for Wall Street execs who receive "exceptional assistance" fair?
editor
The president and his
treasury secretary did more today than decry the bonuses Wall
Street execs lavished on themselves after getting billions from the
government to bail out the failures that led to the financial
markets' meltdown. The
Obama administration set a pay cap at $500,000 for certain
executives whose companies receive federal aid to
right themselves during an economic recovery. Any extra
compensation they receive will come in the form of company stock,
which cannot be sold or liquidated until the taxpayers are
repaid.
The cap is hard and fast only for top executives at companies
deemed to receive "exceptional assistance" from the
government. Think AIG (American International Group), Citigroup and
Bank of America -- only it won't apply to them because they
already received federal money. This change is going forward, and
may be more symbolic than anything else because "generally
healthy institutions" that receive aid in the future have more
leeway to exceed the cap if they are fully transparent in how the
money is being spent and if their shareholders vote in favor of
higher salaries. But the president said the government will ensure
that massive severance packages for executives who leave failing
firms is a thing of the past.
These moves are all about trying to regain some public trust
because the loss in confidence in the people who run our financial
markets has contributed to the current economic mess. As Obama
said, most Americans do not begrudge anybody for achieving success
and the wealth that can come with it. "But what gets people
upset -- and rightfully so -- are executives being rewarded for
failure. Especially when those rewards are subsidized by U.S.
taxpayers."
You've got that right.
Will the new Wall Street exec pay guidelines help restore
some confidence in how federal bailout funds will be put to
use?
Related: wall street, obama, executive pay, bonuses
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Posted by Angela Wed Feb 4, 2009 11:26am PST
Thanks for writing this. I was actually going to post my own blog about it. You must have posted this while I was looking up information about it.
My trust will not be restored in these financial markets. I never trusted them to begin with. The fact that the government the American people had to bail them out because they were so corrupt to begin with only shows me that I was right in my thinking. The fact that these people have now come to the American people with their hands out and still believe they should not have to answer for any of the crimes they've committed is really pretty shocking. The fact that they won't willingly regulate themselves and continue to reward themselves for failure is alarming.
Large corporations, not just these financial institutions, but all large corporations receive all kinds of corporate welfare in the form of tax breaks, breaks on the costs or running and doing business, and on and on. Individual Americans do not get any such breaks. None of us are free from paying sales tax, utility bills, or income taxes. People all around us (maybe even we, ourselves) are losing our jobs and our homes while these people reward themselves for causing this crisis.
For the government to demand that these people have their income limited until they prove their ability to do their job is not Socialism. This is a rational, reasonable response to people who have taken advantage of an unregulated system and forced tax payers to suffer for their crimes.
We regulate minimum wage. We regulate the pay of state and federal employees. Suddenly we have no right to regulate the pay of the wealthy who are being paid on the tax payer dime? The poor and the middle class can be regulated but the wealthy remain exempt? I think not.
I keep my money in a credit union, where I am a member owner.
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Posted by biscuiteater Wed Feb 4, 2009 11:35am PST
It is absolutely fair. Obviously they did not do their jobs, and at this point, should be considered lucky they still have them.
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Posted by C Wed Feb 4, 2009 11:37am PST
If they take public dollars, they are accountable to the public. I think this is a good thing, glad the president addressed it, symbolic or not.
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Posted by Samx Wed Feb 4, 2009 11:46am PST
I think that we have to much regulations. How about regulating how many children you can have and support.
I do not lay credence on a Gov't who can't seem to clean its own house, to clean my house.
there will always be some rotten apples, but when people make money no one seems to give a sh@t. So what's the problem? Stop kvetching already.
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Posted by __A_YAHOO_USER__ Wed Feb 4, 2009 12:17pm PST
good move by the pres.i agree with angela,i never trusted them either...credit union is also where my money is.
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Posted by Jean F Wed Feb 4, 2009 12:52pm PST
No its not fair because its too much. 250,000 plus expenses would have been more than enough.
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Posted by biscuiteater Wed Feb 4, 2009 1:33pm PST
Samx, I would support a bill regulating an income to child ratio. I know it's harsh, but some of those folks are getting government money as well. I would also be willing to support a bill regulating and capping pay for government officials (since they act like the CEOs of our country, which is also failing right now). I doubt that will ever happen, since they get to vote in their own pay raises.
However, I would prefer that people just exercise good judgment in the first place. But if the government needs to bail them out (and they all argued that they needed the help from the government), then they absolutely need to suck it up, get their job done, turn their companies around, and earn their pay ($500,000 is still an awful lot of money to fail miserably at what one does). Once they are no longer in need of government assistance, then they have carte blanche to earn whatever they and their shareholders see fit.
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Posted by Bobette C Wed Feb 4, 2009 1:40pm PST
It just goes to show that any humane being who's life revolves around material things is not a man of God You are to store your "things" in heaven with God.
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Posted by Bobette C Wed Feb 4, 2009 1:43pm PST
It just goes to show that any humane being who's life revolves around material things is not a man of God You are to store your "things" in heaven with God.
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Posted by Angela Wed Feb 4, 2009 8:01pm PST
Biscuit,
I would never support an income to child ratio because that ensure that only the wealthy are able to have children. Too many abuses would come into play if such an action was ever to be enacted. I, for example, would not be here if such a law were ever made.
What would we do with people who became pregnant even though they were below the acceptable income? What would we do with people who were above the acceptable income when they had their children, but then lost their jobs through no fault of their, such is happening now? Would we take those children away and force them upon an already over burdened system?
Making a law that people cannot have children if they are not above a certain income level presupposes that income is constant, which it isn't. It presupposes that one can never improve their circumstances, which isn't true. It also presupposes that those who are currently wealthy will always be so, which is also not true.
If you talk to anyone who has already raised children, they will often tell you, if you wait until you can afford to have children, you never will. Having children changes your life. Once you have them, you have to adjust your entire lifestyle to conform to bringing a new life into the world. Many people who may have thought they couldn't afford children will find they can if they change how they live.
Finally, minimum wage is below poverty level. We need to start thinking in terms of a living wage. If our government allows business to take advantage of low income workers by paying them below poverty level, it is our system's fault that people don't make enough money to survive on, not the people's.
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