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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?
Way to go! Excellent move.
Not to worry for the CEO’s. They didn’t end up swimming in the gravy trough without knowing every single sly way to maintain their big pay days…even if they officially only made $1.00/year.
How is this NOT an obvious move. It should have been way before any cash was handed out. The argument that they need to pay that kind of money for the executives they have, when they are in absolute ruin and in need of a bailout, seems a little ridiculous.
I think someone should thought of this before they handed out the money.
Obama is chickenshit. If he had any balls he would impose the same limitation on ALL CEO’s and all for the same reason: they aren’t worth it and the practice of allow same reveals the corruption at the heart of capitalism/corporate welfare/fraud as practiced in america.
Labor vs Capital
Management vs Labor
With the excess of one over the other as we see today, the pendulum needs a good kick back towards equilibrium.
Does anyone have access to the actual formulas used to calculate CEO/top management bonuses?
How can your business lose billions and any kind of bonus program worthy of the name provide any additional compensation?
Was the bonus based on the number of days you came to work—-or what?
# 5 bobbo said, “Obama is chickenshit. If he had any balls he would impose the same limitation on ALL CEO’s and all for the same reason: ”
Umm, I don’t think he wants SCotUS to roast him over an open fire, slowly.
# 6 bobbo said, “Does anyone have access to the actual formulas used to calculate CEO/top management bonuses?”
What? You think there is some universal formula?
Maybe it’s the number of vacations you take to exotic locations.
Kudos to him if he makes it happen. Not a whole lot of faith outta this corner though.
#5 Bobbo
“they aren’t worth it and the practice of allow same reveals the corruption at the heart of capitalism/corporate welfare/fraud as practiced in america.”
Okay check this out.
Capitalism + Corporate Welfare = Oxymoron.
The US “Capitalist” system is well sold lies and propaganda.
Shouldn’t the same standard apply to pro athletes and execs for the NFL, NBA, MLB, & NHL? We’ve been subsidizing their stadiums for decades and they hold communities hostage to build them new stadiums and arenas.
Likely as not, they’ll move the team if they can get a better deal in another city or sell the team and make hundreds of millions in profit.
Every bonus program I have ever seen was based on “exceeding expectations” or at least meeting a “stretch goal.”
In the current debacle, that would mean these corporate ne’re-do-wells must have been budgeted to lose even more money than they did which means the meltdowns was predicted at least a year previously?–either that or the CEO’s committed a fraud against the stockholders of the companies involved by giving cash to employees without a legal basis of doing so.
#11–breetai==”The US “Capitalist” system is well sold lies and propaganda.” /// Exactly. The evidence mounts up and the truly corrupt keep selling the same lies to the truly abused.
5,
“In naming Edward Jones to the list, FORTUNE editors say that despite the stock market collapse, the firm assured associates it had little to no exposure to high-risk mortgages or financial derivatives and no plans for layoffs. Edward Jones hired nearly 1,000 new financial advisors in 2008. ”
So, Edward Jones played smart… avoided the shit and they should be capped as well? Why?
I agree that CEO payscales in the US are completely out of whack, but your one size fits all model is purile.
#12. You haven’t seen enough of them. I’ve seen ones that give a small % of revenue as a bonus no matter what level. It is all negotiated up front. CEO’s usually have the power to set bonuses for general staff as they wish. No fraud against stockholders. The power of the average stock holder is to buy, not buy, or sell.
Now, if the execs presented fraudulent financial’s or engaged in insider trading, THEN, You have grounds for criminal action…
Also… please remember everyone that the US is NOT a “capitalist” system but a corporatist one. Very important denotion.
I dont mind highly paid ceos, but it should be tied to the companys performance. If the company makes big bucks, pay the ceo big bucks. If the company looses money and has layoffs, minimal pay for the ceo.
# 18 Named said, “Also… please remember everyone that the US is NOT a “capitalist” system but a corporatist one. ”
Pretty funny. It is actually the opposite.
20,
Really? So, in the US the invisible hand of the marketplace of the capitalist system is what? Busy jerking off failed corps with taxpayer lube?
#16–named==puerile? Well, THAT can’t be. Lets see–$500K MAXIMUM pay. Frankly, most CEO ‘s aren’t worth that much and the cap would be just that==a cap. Most would earn much less==a multiple of the average pay of the entire firm. No–not one size here, many smaller sizes available for sure.
Every “good” CEO says the real strength of a company is its employees. Its well past time the law require full recognition of that simple truth.
#22 Do you know what CAPITALism is? Hint. Nothing to do with free market enterprise.
I’ve never been against wealth if it is EARNED, the problem is that if your company is failing and needs a bailout from the federal government, there is no way that you have earned a bonus or a golden parachute and should not receive one.
It’s like getting a pat on the back for doing a shitty job…
# 23 bobbo said, “Its well past time the law require full recognition of that simple truth.”
Sorry, no can do. No more than you can tell me that I can’t hire my brother to watch my dogs while I’m on vacation. I know you want communism and a command economy but, fortunately we have a sane SCotUS…
# 25 Synthesis Landale said, “the problem is that if your company is failing and TAKES a bailout from the federal government,”
I corrected it for you.
#21–Breetai==the fact that any “philosophy” contains errors and excesses does not equate them. The fact that any philosophy contains errors and excesses does not mean that the excess of one should not be corrected by the validity of the other.
Is what you post bad thinking or not thinking at all?
bobbo said If he had any balls he would impose the same limitation on ALL CEO’s and all for the same reason: they aren’t worth it and the practice of allow same reveals the corruption at the heart of capitalism/corporate welfare/fraud as practiced in america.
I disagree on so many levels. If your company is being bailed by the government then executives should not just have a limit on their sallary, they should forgoe their salary entirely until they fix their business. Just like when you are starting a business … you don’t make any money until you make some money!
If your company isn’t being bailed out, then its up to your shareholders. All a limit on executive salary’s would do is move executives out of US… cause whats the point of running your own business if there is a limit on how much proffit you can make out of it!
Our system is more an ugly mix of capitalism, corporatism and mercantilism redux.
I think the pay that some CEOs make is obscene.
But a CEOs pay is not the reason their companies are going bankrupt.
GM loses money on every car they make because they have to provide health-care and retirement benefits to nearly 1 million people – most of which no longer work for GM.
The CEOs who agreed to these deals obviously don’t deserve the multi-million $$ paychecks. But setting a limit of $500K won’t help GM.
#30
I wouldn’t call it Corporatism, it’d call it a Corporate Oligarchy.
#28 Bobbo,
I wasn’t talking about the philosophy itself. Just the goons dumb enough to subscribe to either.