Man it makes sense.. Remember this is for companies that are participating in the bailout.. Meaning not every single company registered in the USA... You have Company A lose revenues let's say in the Billions the past year yet the Exec's receive huge bonuses and salary? Only in the USA can you get bonuses while your company flounders...
This will ensure that no talent is left at the banks that must adhere to this rule, making it that much more difficult for the government to get it's money back... It's an idiotic move predicated on class warfare and backed by people who just simply don't understand the nature or purpose of Wall Street compensation structures. The US is the financial leader of the world, in large part because top talent works there. Without adequate financial rewards, then the people will simply leave. They'll start their own shops or go to firms not impacted by the TARP. If you are a senior banker that brings in $20 million a year in fees, you deserve much more than $500,000 in comp. Expect to see a mass exodus of top talent. It's an easy political point to score for Snobama, but it simply does not make practical sense. Why doesn't he cap Axelrod's book signing deal, why he's at it? Or Michelle's hospital administration job's compensation?
Much of the bonus number that is quoted is a 2007 bonus (when times were better) that was paid in the early months of 2008. That's how it works on Wall Street.
If your company need bailout to survive, shouldn't the leaders of the company take some responsiblities? What if there were no bailout, what would these guys make? They can always reisgn and go to another company. Donold Trump was put on a spending cap when he was bailed out by investors.
Again it's for companies that want to receive bailout money because there company is TANKING.. Meaning they are not making a lick of profit..
It's not about saving money. I don't have a particular philosophical problem with it, at least for the companies that actually needed the money. I do think it sucks for the companies that were forced to take it (Wells Fargo, JPMorgan). Companies like Citi wouldn't exist today without that money so any income those executives are now getting is only because the government kept them afloat - anytime you get money from the government, there's nothing wrong with strings being attached to it.
LOL, you are totally clueless. Do you think the employees will work that much harder to make money, now that their pay is slashed? Hilarious.
I am pleased with this news. If the we (taxpayers) are bailing a business out, your damn right I want some serious strings attached.
That top talent just ran virtually every major financial institution into the ground. And where exactly are those super-smart people that oversaw the destruction of their firms going to go? Wall Street layoffs are occurring in huge numbers. There is plenty of talent in the financial industry competing for fewer jobs - maybe it's time for new blood to take over these institutions. Let the ones that failed miserably move on. If the firm really wants to keep the person, let shareholders vote on it. Then they can keep getting paid their $20 million under the new rules. If the shareholders don't want it, that's their choice - they own the company.
Why are they selling it like that's what its for then? Just like they are saying abortion funding and birth control will stimulate the economy. The truth is they want the government to have more control over business and see this economic downturn as a huge "in" where they can have public support for crap that would never fly if people were not scared ****less of losing their jobs,
I must agree with T_J. With the caveat, however, that Boards of Directors in all of corporate America have been wasting resources by overcompensating executives with variable pay that carried no real risk. I think there's been an executive pay bubble on top of all the other bubbles we've suffered through. We can bust the bubble for the bailout companies, but if the rest of the business world keeps doing it, then the TARP banks will lose a lot of talent.
Employees or Executives??? Who are you speaking for? The guy cleaning the windows? Admin assistant, regular employees of a fortune 500 company??? Man again Obama has laid it out for the top 1% of a mega billion company.. I work for the largest company based out in Houston and frankly the employees here are sucking up and working harder than ever to retain there jobs.. Hell if you gave the options to employees who were fired if they would take a small pay cut to keep it.. THEY WOULD!!!!!!
ooh noooessss!!! We might lose the "talent" that drove the banking industry over the cliff!!!! What will we do?
Obviously this problem will be addressed later by capping all salaries and bonus. We cannot allow this "loophole" to exist!
When they were forced by Congress and racial extortionists to lend money to sub-prime borrowers, things went south. It is not even open to debate that the top financial talent works on Wall Street. It's the financial capital of the world for a reason. The talent extends deep within these organizations, as does the high compensation. Citi probably has over 1,000 people that make over $1 million a year -- many of whom had nothing to do with mortgage lending, CDO's, etc. Why punish these people? Shareholders should not be interfering with the day-to-day operations of a business. That's why you have a board of directors and a compensation committee. I'm not going to give you a lesson on corporate governance, although you need one. And how exactly are you going to bring in 'new blood' with low compensation? It just makes no sense.
To hire a competent executive on the open market is going to take more than 500k. This does make an interesting situation where the near top guys will be making a lot more than the CEO.
So you believe the government should only give money to companies if they do it with no strings attached? What? This only applies to companies that got government money and can't get their shareholders to approve higher pay. Why is bad that the owners of the company have to approve pay packges? You do realize the companies can continue to pay anything they want as long as shareholders are OK with it, right?
What makes even less sense is to think that Nancy Pelosi, Harry Reid, and Obama have the business skills to make decisions on how to run a bank. Now that's just lunacy.
Whoa whoa... TJ I apologize if I didn't understand Obama proposal.. But it seems that in your point of view this is going to affect everyone? If that is the case you are partially right.. But from what I heard I thought it was just based on Executive Pay? How many companies do you know have executive status in the 1000's?? Again working for Fortune 5 of the 500 we have only 10 give or take 1?
