Articles

Executive Pay Caps cut From Stimulus. Because $400,000 A Year Just Isn’t Enough

In economics/money, stupidity, U.S government on February 12, 2009 by Editor Z

In the Congressional conference to merge both the House and Senate there have been compromises. What has emerged is a $789 billion Stimulus package. One casualty of the compromise is a limit on bonuses for CEOs and Executives of companies who take money from the U.S Government to stay afloat.

Congressional efforts to impose stringent restrictions on executive compensation appeared to be evaporating yesterday as House and Senate negotiators worked to fine-tune the compromise stimulus bill.

Provisions to impose a penalty on banks that paid hefty bonuses and to cap pay at $400,000 for all employees at firms applying for additional government funds did not survive the compromise, sources said.

The situation was in flux last night, but provisions in the Senate bill that called for a ban on bonuses for all companies receiving government funds also appeared to be headed to the chopping block, congressional sources said.

Disgraceful. Well hopefully when and if the Obama administration and Congress decide to release the remaining $350 billion of TARP funds to banks and financial institutions with the aim of kick starting lending this could be reinserted. Otherwise without those caps on exorbitant pay to CEO’s who don’t forget DROVE THEIR BANKS AND COMPANIES INTO BANKRUPTCY, and other measures to closely monitor, supervise, and regulate where TARP Money is going; then injecting more money after not knowing where the other $350 billion went would be beyond reckless. Many argue these bonuses are necessary to entice CEOs and “talented” corporate, banking, and financial leaders to stay with the investment institutions and banks they head. After this financial catastrophe they should be pushing these guys out.

If CEOS and companies don’t want to abide by the regulations and caps to make sacrifices to save their banks and lenders, then they should opt out of taking the money. They have to want to succeed more than we want them to succeed and right now this doesn’t seem to be happening when we have such insular corporate largess.

I am sick of how many politicians are railing against single mothers on welfare, struggling just to make it, yet those same politicians fall all over themselves to make sure that the inept corporate leaders who make millions, so they can make more than $400,000 a year.

UPDATE: Actually the cap on pay provisions would limit pay of all employees at banks and institutions that receive TARP money to $400,000 a year. Oh the humanity!

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