Bill Gates said on Wednesday he believes Wall Street pay is “often too high” and that U.S. government ownership of American International Group Inc worries him because it has devalued the giant insurer.
The billionaire Microsoft founder, who retired in 2008 to concentrate on philanthropy, blamed a 1993 U.S. law that capped executive salaries at $1 million and warned that further bids to try limit Wall Street pay could also backfire.
“It was a bad milestone in controlling executive salaries when that $1 million cap went on,” Gates told a discussion on philanthropy at the 92nd Street Y cultural and community center in New York City.
“The compensation problem is a very interesting problem. I do think compensation is often too high, but it’s a very tough problem to solve,” said Gates, who was also ranked by Forbes on Wednesday as the 10th most powerful person in the world.
The $1 million limit on salaries encouraged companies to instead give executives lucrative stock options, sending pay to vast new heights.
