Obama caps salaries of CEOs from taxpayer-funded companies

[they don't love you like i love you]

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/02/04/MNF115NC1C.DTL

Fantastic. I've been calling for this ever since the bailout. Sucks for those CEOs though who'll have to learn how to make due on a measely $500,000 a year though I suppose but I have a feeling they'll manage.

[Verily]

The cap also doesn't apply to stock options, although stock options are not all that valuable right now anyway.

It's interesting that Obama did not retain McCaskill's initial plan to cap the salaries at the Presidential salary. I suspect this was a choice of optics; Obama didn't want to remind the country that the President makes a lot more money than most of them (not, of course, the President's choice, but such are things).

[Jake]

Removing any possibility such a company will attract talented executives. Populism at its god damned worst.

[Verily]

Removing any possibility such a company will attract talented executives. Populism at its god damned worst.

Be grateful; 21% of CNN's online poll supported no salary for the executives, about three times the 8% who opposed the restrictions.

Anyway, one mitigating issue is that pretty much every bank is receiving bailout money. So there's nowhere for the executives to flee. And the caps only extend as long as the bank is still receiving bailout money.

[Marokai Backbeat]

I see nothing wrong with capping the salaries of executives from businesses that are taking taxpayer dollars to stay alive. They shouldn't be using public money for vacations, bonuses, outrageous salaries, etc.

If we're going to have a bailout we should be using the money for a bailout, not for a handout.

[MK]

Don't worry they'll just forget to claim any extra income they may happen to have.

[Marokai Backbeat]

Don't worry they'll just forget to claim any extra income they may happen to have.

Something they should also be thrown in jail for. But I guess that's "Populism at it's god damned worst."

[Jake]

If we're going to have a bailout we should be using the money for a bailout, not for a handout.

Please explain how a struggling company (already a not attractive destination for an executive) is going to attract the talented individuals they need to become profitable again if they cannot offer a salary commensurate with the market. That's like expecting a baseball team to get better by capping their spending at $20 million. The longer these companies stay in this condition the longer we use taxpayer money to prop them up.

The populism at it's god damned worst is how people don't think about these things when they answer these polls.

[MK]

If we're going to have a bailout we should be using the money for a bailout, not for a handout.

Please explain how a struggling company (already a not attractive destination for an executive) is going to attract the talented individuals they need to become profitable again if they cannot offer a salary commensurate with the market. That's like expecting a baseball team to get better by capping their spending at $20 million. The longer these companies stay in this condition the longer we use taxpayer money to prop them up.

The populism at it's god damned worst is how people don't think about these things when they answer these polls.

Its called making things fair.   Sports leagues do have a cap for that very reason, and the greed on wallstreet is out of control.   The Top 1% have enjoyed the last 10 years while others have all seen their wages decline.

I have to give Obama props for this, however as i sarcastically posted before the greedy bastards will find way to hoard money anyway.

[Lunar]

This only applies to executives so everyone else can still make whatever they want without even needing a loophole (and the minority will likely find a loophole)

[Jake]

Its called making things fair.

False. CEOs, at least good ones, have a rare skillset deserving of significant compensation. It doesn't make sense to cap how much a struggling company can pay someone as they won't be able to attract talented executives.

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My example does not and even those leagues that do have caps to reflect disparities in market size. There isn't a salary cap in football because the NFL is subsidizing every team's payroll.

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Irrelevant. Capping salaries isn't going to end greed; it's just going to ensure that companies that are in trouble can't pay for great executives.

[2952-0-0]

Think of it this way: without the government intervention their salaries would be precisely zero. I doubt any bank CEO will be able to find any job higher than Wal Mart greeter. Okay, maybe they can make speeches and write books.

Better to make half a million trying to salvage a crashing bank than to make $20K welcoming people to Wal Mart, right?

[Lunar]

In addition, the public backlash over CEO Salaries endangers the government's ability to bail out the firms in the first place.

 Not to mention the backlash against the company, although that depends on the product

[opebo]

False. CEOs, at least good ones, have a rare skillset deserving of significant compensation.

False, Jake.  CEOs are merely paid a lot to reinforce the pecking order - a hierarchy of greed, envy, misery, hubris and humiliation.  All the people who make the money for the company are paid a subsistence, but the overseers must each be paid more at each successive level to make the system of desperation work.  Certainly the number of people who could competently run any given corporation runs into the thousands or tens of thousands - the ones who actually get that privilege get it not because of 'competence' or by being 'deserving', but simply through the operation of the class system.

Irrelevant. Capping salaries isn't going to end greed; it's just going to ensure that companies that are in trouble can't pay for great executives.

'Great executives' sound a trifle naive, Jake.  Things don't work the same way in reality as they do in the libertarian or supply-sider's fantasy.

[dead0man]

Like the fat guy on The Daily Show the other day said, "well that takes care of 1% of the problem, now what?".

[Lunar]

This could also be partially an attempt of Obama to win back the media debate from the Republicans -- the GOP is going to have to look long and hard at this, their friends at the WSJ editorial board won't be happy if they back the politically popular side of this debate

[Bono]

Awesome, this way they'll think twice before taking any government blood money.
This of course wasn't the objective, but through the blind hate, liberals have actually done something that's marginally good.

[Jake]

Think of it this way: without the government intervention their salaries would be precisely zero. I doubt any bank CEO will be able to find any job higher than Wal Mart greeter. Okay, maybe they can make speeches and write books.

Better to make half a million trying to salvage a crashing bank than to make $20K welcoming people to Wal Mart, right?

I'm not talking about CEOs already in place.

[Marokai Backbeat]

If we're going to have a bailout we should be using the money for a bailout, not for a handout.

Please explain how a struggling company (already a not attractive destination for an executive) is going to attract the talented individuals they need to become profitable again if they cannot offer a salary commensurate with the market. That's like expecting a baseball team to get better by capping their spending at $20 million. The longer these companies stay in this condition the longer we use taxpayer money to prop them up.

The populism at it's god damned worst is how people don't think about these things when they answer these polls.

Obviously money doesn't attract talented people as it is, considering these people ran their businesses into the ground. Maybe we'll actually get people who care about the company, rather than amassing bazillion dollar bonuses.

Oh yes, I went to bazillion.

[Tetro Kornbluth]

Can someone please explain me why getting 500,000 dollars a year is a bad deal, okay it's not 3.2million dollars a year or more or something similiar, but who needs that sort of money anyway except for penis size comparsions (oooooppppsss...).

[Filuwaúrdjan]

Can someone please explain me why getting 500,000 dollars a year is a bad deal, okay it's not 3.2million dollars a year or more or something similiar, but who needs that sort of money anyway except for penis size comparsions (oooooppppsss...).

Because they are pigs. I don't think there's another reason.

[Tetro Kornbluth]

Can someone please explain me why getting 500,000 dollars a year is a bad deal, okay it's not 3.2million dollars a year or more or something similiar, but who needs that sort of money anyway except for penis size comparsions (oooooppppsss...).

Because they are pigs. I don't think there's another reason.

Shhh... You're not meant to answer the Question! YOU'RE NOT MEANT TO ANSWER THE QUESTION YOU.. YOU... OMG!111

[dead0man]

Because they can?  Because the owners (stock holders) of the company pays them that?  LOTS of people make more than $500k a year.  Some of them you guys even like.

I'm not saying it's not funked up, it is, but there are reasons for it.  If somebody was willing to give me several million dollars to run a company into the ground (or kick a ball around or stand in front of a camera and act or whatever) I'd certainly take 'em up on their offer.

[Ban my account ffs!]

Because they can?  Because the owners (stock holders) of the company pays them that?  LOTS of people make more than $500k a year.  Some of them you guys even like.

I'm not saying it's not funked up, it is, but there are reasons for it.  If somebody was willing to give me several million dollars to run a company into the ground (or kick a ball around or stand in front of a camera and act or whatever) I'd certainly take 'em up on their offer.

So it's okay for 'normal' stockholders to determine the pay of a CEO, but when the stockholder happens to be the taxpayers it becomes a sin and populism at its worst?

Perhaps we should just let these companies dissolve into oblivion.  The economy would collapse a lot further, but maybe the CEOs would learn that a respectable salary of half a million is better than not having a job or an income.

[Sam Spade]

This only applies to executives so everyone else can still make whatever they want without even needing a loophole (and the minority will likely find a loophole)

Additionally, it does not apply retroactively, so if the company does not *go back* to the federal trough after the Rule is made, there is no restriction.

So, the Obama administration is going to look pretty bad when one of these banks (probably Goldman Sachs, whose notorious for this crap) keeps giving executives millions of dollars through some amusing loophole and it gets reported on by the press.