Obama Maximum wage

I apologize for posting here in the D&D, per my bet with Sammy, and I will stay out per our bet, but I feel the need to state this.

First and foremost, Lee Iacocca made millions every year at Chrysler earning $1 a year. So I know that Obama's wage has no meat to it, whatsoever.

But in talking to my father tonight, I think that the program that Exxon has had for decades would, and should, be the new plan Obama takes on, rather than this paper tiger plan that gives libs happy joy joy feelings while they smoke out.

You see, Exxon vests their executives stock options. They are only received after retirement. The better you do, the bigger your options.

Oh, and Exxon has given out bonuses as well. Humongous ones, but they have a clawback feature. If, during your tenure, your bonus was gained scrupulously, it will be taken out of your retirement package.

I'm not saying it is perfect, but their business plan makes a hell of a lot more sense than most out there.

And as much of a fan as I typically am of T_J, and the rest, y'all are simply wrong here. The bonuses should be paid back 5 years running on any business if you had a heavy hand.

No ifs ands or buts. In the future, find a company where bonuses aren't created in such an advanced nature.

 

Well, guess what, there is no need to argue about gaping holes when you have loopholes

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President Barack Obama's crackdown on Wall Street pay contains loopholes, and may have limited impact in restraining compensation, according to some executive-pay consultants and management attorneys.

Some compensation professionals already are pointing out potential holes in the rules, including tactics such as changing executives' titles or rearranging pay packages. Just as past attempts by the government to restrict executive pay largely backfired, these people warn, the new curbs also may have unintended consequences.

The plan, announced Wednesday, includes a $500,000 cap on annual compensation for senior executives of companies that receive future "exceptional" government aid. Additional compensation would have to be paid in restricted stock or similar long-term incentive arrangements, which the executives could cash in only after the government is repaid, with interest.

Other recipients of future federal bailout money would have to place tougher limits on severance packages and disclose luxurious perks, such as the use of company jets. Annual compensation above $500,000 at these companies would be subject to a nonbinding shareholder vote.

"The mix of transparency and accountability is powerful and strikes the right balance to allow banks to continue operating effectively while operating under common-sense guidelines that rein in excessive compensation," a Treasury Department official said Thursday.

Many applauded the moves as a useful step to curb Wall Street compensation practices that may have led to excessive risk-taking. But some critics identified weaknesses, suggesting the restrictions be retroactively applied to companies that already have received federal bailout cash. They noted that the most stringent restrictions likely would affect only a few firms; others could avoid some of the curbs by putting extra pay to a shareholder vote.

Some said the plan doesn't limit total compensation, because it allows companies to boost awards of restricted stock.

"I am fearful that companies will look at this as an opportunity to grant more restricted shares and stock options to executives who already have an abundant amount of equity," said Jesse Brill, a securities and compensation lawyer who is chairman of CompensationStandards.com, an advisory Web site. He would prefer barring executives from cashing in stock until age 65 or two years past retirement to encourage long-term decision making.

Michael Kesner, head of compensation consulting at Deloitte Consulting LLP, worries the plan allows executives to claim restricted-stock awards once the company pays back the government, and doesn't require companies to tie those awards to operating results or share-price gains, as many companies now do.

"They're actually saying we don't care about performance," Mr. Kesner said.

Others said the preliminary restrictions released by the Treasury Department are overly vague. For example, the $500,000 annual pay limit applies only to "senior executives." James F. Reda, a New York compensation consultant, said companies could give certain executives lower titles or assign them to head subsidiaries.

"Now you're going to have executives ask not to be called a senior executive," said Steven Hall, a New York pay consultant. He warned that companies can't get too "cute," because they will embarrass themselves before a hostile public and government. "Being cute ain't going to work in the future," he said.

There also isn't a clear definition of what constitutes a luxury perk. Companies could grant executives benefits such as medical exams, tax gross-ups and personal tax advice, said Sarah Anderson, an executive-pay analyst at the Institute for Policy Studies, a liberal think tank in Washington. Gross-up payments from companies reimburse senior executives for taxes the executives owe on company-provided perks and other benefits.

The Treasury official said the department plans to issue more detailed regulations, likely in a few weeks. He said each company's perk guidelines will be vetted and posted publicly.

David Yermack, a finance professor at New York University's Stern School of Business, said the initial guidelines don't address many aspects of executive pay, such as deferred compensation and pension arrangements.

Mr. Yermack also said it isn't clear if companies would be allowed to boost executives' pay by repricing existing stock options. Such a repricing could be worth millions of dollars in potential compensation.

Perhaps the broadest impact from President Obama's plan will stem from its endorsement of advisory shareholder votes on executive-pay provisions. Such "say-on-pay" votes have long been sought by corporate-governance advocates, but only a small number of companies have implemented such votes.

Some bankers and compensation consultants said they worry the plan will prompt an exodus of talent from companies with regulated pay to other firms. But Alan Levine, an executive-compensation attorney at Morrison Cohen LLP in New York, said there will be plenty of qualified people willing to run big banks at annual salaries of $500,000.

"I think there's some guy at Citigroup who says, 'I don't care if I'm only making a half-million dollars, I'm going to lead this bank to recovery, and when we get out of this cloud, you're going to pay me.'"

 

Regardless, we need people that care about fixing this economy, and bonuses need to be usurped.

We made this devil, as FA's, and we need to fix it.

 

Once again, if you have problems with it, go take it up in Delaware. There is a reason some 65% of US corporations incorporate in Delaware. It is precisely because of its favourable corporate statutes. You don't need more than one.

Once again moron, options do not give you the right to vote unless you exercise. My wife owns couple roundlots of call options on Bank of America, does she get a vote?

So when the government exercises the warrants and convertibles they can call proxies call they want. They can even set executive compensation assuming they conjure up enough votes. But until then shut the ***** up.

Um actually yes. It currently has the threat to exercise control, which in some cases is enough to influence executive decisions (it all comes down to negotiating powers). But IF AIG hardballs, it WILL have to exercise, no ifs and buts about it.

That's funny, that directly contradicts your own post. Let's re-focuse:

"Class Voting Rights as to Particular Matters. So long as any shares of Designated Preferred Stock are outstanding, in addition to any other vote or consent of stockholders required by law or by the Charter, the vote or consent of the holders of at least 66 2/3% of the shares of Designated Preferred Stock at the time outstanding, voting as a separate class, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating:
"

Now notice that "Particular Matters" was capitalized and ambiguous enough for the government to pull another rule switch later on. Vagueness is your friend

So where was this veto right? That I admit I'm not familiar with. In a SammyFisher world maybe? "My way or the high way" with thinly veiled threat, highly probable.


Yes, it is a majority owner, that's why Citi does what it says. Why do you think it didn't buy that jet last week? Because it's majority owner and largest shareholder told it not to.

Hmmmmm, let's see, does the US government own 50%+ of all Citi shares? No. Does it own 50%+ of all voting shares? No. Is it a majority owner? All signs point to no.

And that corporate jet? Gee, and here I thought a large part of the decision was based on the flak Citi got when it came out.

And of course, as I said countless times, the government can always twist a couple of arms here (such as say, I don't know, change the regs), but nice of you to spin it as something else.

Once again, did the government consult with common and other preferred shareholders on the issue? Did it call a vote? Did it pass? No? How interesting.

Actually, a second year B-school student can tell the difference between an owner and a controlling owner. And a second year B-school student knows absolutely ****. So I find your drivel that anybody would rely on your "reference material" highly amusing.

And of course, you apparently can't tell the difference. I'm hardly in a pile of dung, but you're head deep in bullsh1t. Here, here's a straw.

I typically don't try to get creative with my insults. One that hits the mark would suffice. This one did.

 

While we're limiting comps:

http://www.bloomberg.com/apps/news?pid=20601039&sid=avutI6kaXfOA&refer=home

Cap $1,000-an-Hour Lawyer Fees While You Are at It: Ann Woolner
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Commentary by Ann Woolner


Feb. 6 (Bloomberg) -- As you may have noticed, these aren’t especially happy times for those used to the good life or those who merely get by.

New York’s Rainbow Room is shutting down after 74 years as the dining room of the glamorous and the rich. U.S. President Barack Obama calls Wall Street bonuses “shameful.”

Uncle Sam passes out tourniquets to financial firms. Carmakers gasp for survival. Each week, another friend gets kicked off a payroll.

Then there are the bankruptcy lawyers. For them, these are grand times.

The business of going under is one of the few booming ones these days, and fees paid to those who guide sick or dead companies through bankruptcy are, too.

Rates broke through the $1,000-an-hour barrier for the priciest bankruptcy legal advice, running up to $1,110 at Kirkland & Ellis LLP, based in Chicago.

Circuit City’s recent liquidation sales disappointed bargain-seekers, but its bankruptcy could become a bonanza for its lawyers at Skadden, Arps, Slate, Meagher & Flom LLP. Their rates top out at $1,050 an hour. (Whether the firm actually charges that hasn’t been decided, said the lead lawyer on the bankruptcy, Gregg Galardi.)

In any case, rates like that make fees claimed for the largest bankruptcy in history, Lehman Brothers Holdings Inc., look cut-rate. Weil, Gotshal & Manges LLP is seeking as its top rate in the case a mere $950 an hour.

‘Pushing the Envelope’

“We do not believe we should be pushing the envelope at the highest edge of hourly rates,” says Harvey Miller, lead lawyer in the Lehman bankruptcy and an icon in bankruptcy law.

Somehow, they will probably muddle through.

True, most of the work done in these cases goes to lower- paid lawyers and staff.

And if creditors find the fees exorbitant, they can object to the judge, who can shave the lawyers’ requests. But in the main, the lawyers get every penny they seek.

We are talking big, big bankruptcies that lead to big, big fees. Lehman Brothers owed $613 billion when it went belly up.

“Everyone’s just sort of thinking in large numbers,” says Jay Westbrook, who teaches bankruptcy law at the University of Texas. That’s one of the reasons “fees are getting out of hand.”

Astronomical Sums

That doesn’t just go for bankruptcy lawyers. All sorts of corporate lawyers get paid astronomical sums partly because they schmooze with other people who are so paid.

“Top lawyers are having lunch with the top CEOs, who are receiving absolutely stunning amounts of money,” says Westbrook. So, the scales get skewed.

Yes, but it is one thing to represent seemingly viable companies. It is another to be pulling down $18 a minute when your client is broke, when every dollar you get is a dollar not going to creditors, who won’t get everything they are owed.

That was the prevailing thought before Congress amended the law in 1978. Until then, bankruptcy specialists took in less than when they or their counterparts represented financially healthy clients.

Congress changed that in the belief that the bankruptcy lawyer’s job is to hunt down as many assets as possible and oversee a fair dismantling or reorganization of the company. How well that’s done, especially in big, complex cases, has far-flung consequences.

Economically Important

“The decisions that they make are very important -- economically important and important to individual human beings,” says Westbrook.

So bankruptcy lawyers essentially got parity 30 years ago. And as legal fees for corporate lawyers climbed, so did theirs.

Enough is enough.

Tell the laid-off, $40,000-a-year administrative assistant trying to feed her family to cheer the awarding of $1,000 hourly fees to lawyers working the carcass of her former employer.

Don’t expect Chicago Tribune reporters who have watched their Trib-heavy retirement funds vanish and fear job loss to rejoice that their employer hired Sidley Austin LLP lawyers for as much as $1,100 an hour.

This is the same company that was shrinking its Washington bureau even as a history-making, hometown senator became president.

No doubt, lawyers with other practices, such as those who handle once-thriving corporate deal-making, are pondering what it takes to move into bankruptcy. Firms let go more than 1,500 lawyers last month alone, according to the Layoff Tracker at Lawshucks.com. For every lawyer fired, one or two staff members had to go, too.

Billable Hours

The whole concept of billable hours is getting reconsidered in law firms trying to give their financially strapped clients a break. But that isn’t likely to change the bankruptcy practice any time soon.

Perhaps gearing down executive pay could have the same downward effect that its ratcheting-up had on legal fees, however indirect.

Obama proposes a $500,000 salary cap for top executives whose firms take in an especially big load of government bailout cash, although they could get more in restricted stock.

It’s a limited proposal. Too bad it can’t apply retroactively and to more companies.

As for legal fees, bringing those rates down in bankruptcy court will require outraged creditors and judges sensitive to the economic hurt that the failed companies inflict on employees, bondholders and shareholders.

Obama, himself a former lawyer at Sidley Austin, can’t order fees capped. But he could point a finger of shame.

(Ann Woolner is a Bloomberg news columnist. The opinions expressed are her own.)

To contact the writer of this column: Ann Woolner in Atlanta at awoolner@bloomberg.net.

 

I hope Obama is smart enough to put a salary maximum on every business, legal, and scientific professional that TOOK GOVERNMENT MONEY in the form of student loans to finance their schooling. Obviously the government should have a say in what these people make. That's capitalism!

 

I think it all depends on the level of waste and irresponsibility shown in the history of those other institutions. If I loaned two people money and one always paid me back, and used the money to better themselves, but the other spent the money on Crack and didn't pay me back, only of those two individuals would have to have conditions put on them should they borrow money again.

I hope that unsubtle subtlety will sink in.

 

Hmm... Obama borrowed government money to pay for law school and also spent money on crack...

Anyhow, you don't know at this point whether the banks will pay the money back promptly -- they just received the money. So your feeble comparison fails.

Obama's move reeks of hypocrisy, political grandstanding, playing to the crowd, and just downright stupidity. To be expected from a total fraud and naive joke of a leader. CNBC has just shredded him to pieces the last few days. Few people in the business community take the guy seriously.

 

There is no link to show Obama spent money on crack.

We do know that the banks have handled their business irresponsibly, and in horrible times gave irresponsible bonus money to CEO's. The history is there and relevant.

 

except no one takes student loans after they've screwed up to save themselves.

Analogy fail

 

Top executive pay got out of whack in this country because of the increasingly incestuous nature of corporate boards and high government officials. They come from the same schools, are members of the same clubs, mentor under each other ... and scratch each other's backs. It's the same coalescence of self interest that produces feudal systems, tribal systems and familial systems. The ruling classes support each other to maintain power and enrich themselves. I think it's basic human nature.

Historically the antidote when power becomes too concentrated and too corrupt is revolution. Of course, then the process begins anew.

I have no problem letting all the top executives of failing banks go find other lines of work if they can't live with scaled back compensation. I think I would rather have the Florida Marlins in charge rather than the New York Yankees. The big brains aspect is way over rated the same way big name talent is way over rated. Organizational culture and work ethic are the under rated aspects.

 

She would if she exercised them - if she could scrape up the cash to buy the shares. That's why a warrant is a fundamentally different instrueent in this instance that you don't understand - the gov't doesn't have to do that. That means that the allocation of rights is different in kind.

As a lawyer i know these things, I don't expect you to so you are excused.

LOL - if you were the CEO of a company, you would tell your 80% majority shareholder who just saved you from bankruptcy by committing 120 billion to "Shut the **** up", citing the previous capital structure, which was expreslly superseded by the preferred stock purchase?

Nice move genius. Actually that sounds just like you.

that's questionable - but anyway you've conceded that they controll AIG I see so I consider this another gleaming interweb victory. China really is slipping down in the medal count.

Uh, - see the 66.7% approval requirement of this class of preferred shares to engage in all these transactions? Who do you think owns 100% of these shares. You do know that 100% > 66.7%, right?

Let's see - the US government invested 45b in equity and several billion more in loans to a company with a market cap of 19b that would othewise be bankrupt. Signs point to yes.

Let's see, the US governmetn has all of the preferred shares which require supermajority voting and allow for seats on the board - signs point to yes.

LOL....really? You are arguing that the governments actions were illegal?

Under what provision of the Delaware chancery code or what Citigroup bylaw is this illegal - I asked you this before and I beg you to tell me. Thanks in advance.

As long as you keep reading it I still get paid. Thanks bro.

Nice one, I hear the emperor is thinking of making you the guy who keeps the IMPERIAL BOOK OF INSULTS AND SNAPPY COMEBACKS.

That sounds like a good idea to me. SOme of the fee apps put in on bankrupt entities are outrageous, Harvey Miller and his army of Weil schlubs aren't worth THAT much.

 

I don't know why the pissing matches on here get so personal or why the egos get so inflated. It's a complicated subject, uncharted waters. Everybody should just state your point and your refutations without the moron comments ( or the "I'm a lawyer", Sam )

Well other than TJ. , pissing matches are what he lives for.

 

How similar to the government. If they exercised the option to convert or rights to use their warrant, they could vote on the matters all they want.

But of course they didn't, because if they did, they'd be on the same pecking order as any other common shareholder, as well as subject itself to the same penny dividend it now so kindly set up, then the taxpayer would really be p1ssed if they couldn't recuperate all that amount, now wouldn't they?

Actually I wouldn't do that at all. Because you see, it's the government. Typically it's not a good thing to p1ss off the government.

Um no, it isn't questionable at all. That's basically how it works. Actually, that's exactly how it works.

And btw, the word is net as in "wang luo," or network, not net as in web, so another of the many pathetic failures on your part, not that I expected to know the nuances.

100% of PREFERRED shares. There also about 5.45 billion commons outstanding, in a separate voting class. Just a thought...

Let's see, the US government invested 45b in a company with trillion dollar balance sheet. Looks like no.

Let's see, the US government has restricted voting rights on "Particular Matters" in a separate voting structure. Seems like no.

Of course not? Who could?

HA HA HA. I'm wondering if you actually read your own articles. It's no wonder I think you're googling. From your own source, less I get accused of investopedia-ing it:

"(e) Procedures for Voting and Consents. The rules and procedures for calling and conducting any meeting of the holders of Designated Preferred Stock (including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of written consents and any other aspect or matter with regard to such a meeting or such consents shall be governed by any rules of the Board of Directors or any duly authorized committee of the Board of Directors, in its discretion, may adopt from time to time, which rules and procedures shall conform to the requirements of the Charter, the Bylaws, and applicable law and the rules of any national securities exchange or other trading facility on which Designated Preferred Stock is listed or traded at the time "

Did the government use proxies? No? Did it seek written consent? Did it go through the board?

Yes, it's one of the oddities of the entertainment industry.

I'm more of a fact finding guy. I mean, I don't even post pathetic pictures when losing an argument like you. What kind of screwup job would I do? Can't imagine.

Then we are in agreement.

 

I'm not a big fan of this proposal to limit top salaries but I think there is a huge problem when executive compensation has essentially become divorced from company performance. Its true that the market for talent is dictating what these executives are paid but how rational of a market is it when executives get paid exorbitant sums while there companies are losing money?

I liken this situation to what happened to the NHL a few years ago. The NHL was on par with other sports like Football, Baseball and Hockey in terms of revenues yet the players were expecting to get paid like players in those other leagues. The NHL ended up with a lockout and the players had to resign themselves to having a salary cap.

Right now it just seems like the talent market is seriously out of touch with the rest of the market to the point that performance has no bearing. I don't see how that is a recipe for good governance of any sort.

I don't know if this is as Dubious says a conspiracy between the government and business leaders, or as Sam Fisher says that businesses have grown too fast but this is a problem that needs to be addressed. I'm leery of government stepping in and doing it but I would be interested in hearing if there are any other ways of addressing it.

 

MFW;

Pardon me for intruding on you and Sam's pissing match but I think there is a fundamental flaw to your argument. You are in agreement that the preferred stock could be converted and have also conceded that the government could just change the laws. Your main point is that the government hasn't done that so Sam Fisher is wrong. The first part of that is absolutely true but that isn't a point that is central to what Sam Fisher is arguing. Sam is arguing that the government could impose salary caps and other things on companies not that the govenrment has. You are basically in agreement with him that the goverment could.

Now I don't want to get in the way of D & D tete a tete, and especially to side with a poster who continues to duck my challenge to meet me in a kumite. , but I think you've lost this one.