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Bailout

Obama’s Salary Cap

Wall Street’s uber-rich CEOs may have to prepare for a future of mere ordinary richness: The Obama administration plans to cap executive compensation at $500,000 for companies receiving federal bailout dollars. Executives will also be prohibited from receiving a bonus of more than their base pay. At a press conference with Treasury Secretary Timothy Geithner this morning, Obama said “In order to restore our financial system, we’ve got to restore trust ... And in order to restore trust, we’ve got to make certain that taxpayer funds are not subsidizing excessive compensation packages on Wall Street.” Geithner said, “There is a deep sense across the country that those who are not responsible for this crisis are bearing a greater burden than those who were."

Posted at 1:31 PM, Feb 4, 2009
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Comments ()
connie47

I can hear the cries, "Socialism!" already, like completely unrestrained capitalism isn't what got us here. I say God bless Obama for inserting some common sense into this mess.

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7:12 am, Feb 4, 2009
cyberwriter

I can't believe that they people in the business of handling business did not do this themselves. Although there are contracts with some of these "professionals", this should not have to be the governments job. Apparently and unfortunately, someone has step in and do it other then those who should know better.

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7:34 am, Feb 4, 2009

This user is no longer registered.

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9:40 am, Feb 4, 2009
delljody

tavallai nailed it. In what bizarro world do you get paid more for destroying your company?

The salaries should DECREASE as the company's worth does. That would be the incentive for a CEO to do well by their employees and make long-term decisions.

as cyberwriter said, these goons won't do anything on their own. They're entitlement whores. Time to knock a few heads together and change the "business culture."

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9:49 am, Feb 4, 2009
AmiBlue

How about saying no bonuses until the company is making a profit and can repay the American people for what we have invested?

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10:10 am, Feb 4, 2009
Bertilak

This has made my day: thank you, President Obama! After all, do you know how many jobs those extra millions could pay for? Everyone who makes multiple millions per year should look around and consider the number of ordinary middle-class salaries that revenue could pay for.

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10:58 am, Feb 4, 2009
sonofloud

stock options, golden parachutes, and the like.
a salary gap will have no effect.
they will just get the money in other ways.

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10:58 am, Feb 4, 2009
slemay

Watch carefully. We've impose IRS and other legal restrictions on executive pay, but they have found many ways around those. In fact, the tax treatment of CEO pay may have helped to inspire some of the excesses.

Few would argue with tying pay to performance. Many of us live with that and even welcome it; part of the problem has been that CEOs benefit greatly on the upside, but pay no penalty on the downside.

Still, if the cap really is a cap, it makes sense in these circumstances.

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11:26 am, Feb 4, 2009
rightconservative

Junket to Vegas.....not pay taxes......what's the difference? Nothing. Both are unethical.

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11:45 am, Feb 4, 2009

This user is no longer registered.

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3:20 pm, Feb 4, 2009

This user is no longer registered.

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3:22 pm, Feb 4, 2009
fallston



CEO salaries and bonuses are such a small amount($'s)
when you look at the 'stock awards packages' that are distributed to CEO's and other executives, directors and managers in any given year. These stock awards are like
stealing from the company and putting dollars directly into
their pockets-free and clear. All do to the compensation
boards appointed by the CEO's themselves. Where's the
oversight from the SEC and Congress?




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3:55 pm, Feb 4, 2009
jedsky22

When I was working as a corporate CFO I was once brought in as part of a management team to turn around a failing business. One of the first things we looked at and set limits on was executive compensation. In fact, the "money guys" insisted on such limits. Why isn't the federal government just as legitimate in imposing such requirements on companies taking federal bailout funds? I for one am glad to see Obama representing the "money guys" - you and me, the taxpayers in this country - in this way. It's not socialism; it's good business!

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5:44 pm, Feb 4, 2009
buckeyedgal

Obama's acceptance of tax cheats: now that's shameful. Issuing his ethics rules against lobbyists in his administration & then hiring a bunch of 'em while Gibbs stammers & stumbles : risible. The Lincoln emulator importing his personal chef from the Hyde Park manse 'cause chef knows how the prez likes his arugula dressed while dissing fat cat CEOs... I'm not feeling it.

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6:53 pm, Feb 4, 2009
hammer

The nearly $18 billion in bonuses paid out to TARP funded banks was entirely paid to the level below the top five to ten executives. If Obama was paying attention he would have found the Ken Lewis of BofA, Blankfein of Goldman, John Mack of Morgan Stanley, Vikram Pandit of Citi, Jamie Dimon of JP Morgan, Thain of Merrill and Stumpf of Wells all announced they weren't going to take bonuses for 2008. Their annual salary ranges from $600,000 to $1MM. Many of their direct reports also received no bonuses. The $18BN went to the traders, IBankers, MDs and was spread around. Overall, the bonus was only down 44% from the record 2007 payout and the sixth largest of all time.

This bill will do nothing to control year-end compensation overpayment. The new regulations sound good in a 30 second bit, but are totally ineffective.

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8:57 pm, Feb 4, 2009
mikefromArlington

Everyone see Sachs reaction to Obama's decision to limit CEO pay. Looks like the U.S. is gonna hit paydirt here.

http://uk.reuters.com/article/bondsNews/idUKN0428223120090204

Also, check out this map on how each state will benefit from the package in it's current form.

http://www.usatoday.com/money/economy/2009-02-03-stimulus_N.htm

It's time people know how this recovery package will affect their local states and stop getting suckered into the GOP games of talking about smoking cessation and birth control.

Also, Obama approval rating has held fairly steady. Starting out at 68% he is now at 65%.

http://www.gallup.com/poll/113980/Gallup-Daily-Obama-Job-Approval.aspx
The 83% previously quoted was his approval of how he was handling the transition.

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9:58 pm, Feb 4, 2009
unintent

How about no public servant can earn more than $500,000 a year after leaving public service for ten years? How about no person in America INCLUDING celebutards and athletes be allowed to earn more than $500,000 a year? Everyone always picks on CEOs but how about everyone else? If no one was allowed to earn more than $500k a year, imagine how much more money those industries would have to pay everyone at the bottom more! :)

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10:05 pm, Feb 4, 2009
unintent

AMEN!! Let's include EVERYONE, celebrities and sports stars too!!

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10:11 pm, Feb 4, 2009
htiduj

does anybody else still get bothered when geithner talks about taxes and responsibility and all that jazz? because i personally cannot look at him when he says things like that. all i see is a big neon sign on his forehead flashing "hypocrite"

as for the "pay cap" i worry that the ceos will find ways around it by merely changing their title..or finding other loopholes. they seem to be very good at that.

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1:06 am, Feb 5, 2009
unintent

I can't wait until his signature appears on all our money. Every time I see his signature, I as writing "...is a tax cheat" right after it!

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10:17 pm, Feb 5, 2009
jpinsatx

REALITY CHECK... The issues are: 1) Pay Cuts, Not Bonuses. 2) Who to Terminate. 3) Who to Prosecute. Rewarding Incompetence and Corruption (with taxpayer money) is Total Insanity!

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8:56 am, Jul 25, 2009
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