Executive Pay Caps?
Posted by Kyle L. Varnell (+3745) 12 years ago
So it seems that Obama is eager to make his mark known on Wall Street and has now capped executive pay for those companies receiving Government Welfare, excuse me, Government Bailout money.

Obama caps executive pay tied to bailout money
http://news.yahoo.com/s/a...cutive_pay

Some of the "Highlights" of the proposed legislation:

 Requiring top executives at financial institutions to hold stock for several years before they can cash out.

How long "Several Years" is is still undefined and will more than likely contain enough loopholes to be ineffective. Regardless though does anyone believe that these guys don't have enough cash and stock that they can cash out now that would completely negate the "Several Years" clause?

 Requiring nonbinding "say on pay" resolutions - that is, giving shareholders more say on executive compensation.

So with this we basically have people saying that they don't like the pay they get but because it's non-binding the executives are not really under any pressure or obligation to abide by it.

All in all this scares me as when I read it it amounts to Government intrusion into private business. Then again when these companies beg for Government Welfare does the Government not have the right to set limits on where that money goes?

[This message has been edited by Kyle L. Varnell (edited 2/4/2009).]
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Posted by Bob L. (+5095) 12 years ago
I think it's a crappy idea to limit executive compensation.

How are you going to attract talent if you're limiting comp to $500,000 per year? Stupid, stupid, stupid.
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Posted by Frank Hardy (+1607) 12 years ago
Bob,

That's just the taxable amount. You know, the portion that they actually figure into paying taxes on. I am now paying taxes on $40,000 of my income. Since I was already confirmed, at 12 years old, I don't think I have anything to worry about.

Cheers!
FH
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Posted by JLB (+210) 12 years ago
When the financial institutions don't have to beg for government welfare, then I think they can pay what they want to their "highly talented" CEOs. ( I am sure these talented people had nothing to do with running these companies into the ground) What I think is "stupid, stupid, stupid" are the people that think half a million dollar salary isn't good enough. A person should be able to live VERY comfortably on that income as long as they aren't spending beyond their means...it's all about budgeting, welcome to the real world! It's irresponsible behavior these companies are possesing when they don't cut back in the areas that need to be managed more properly (travel expense via private jets, first class resorts, 5 star entertaining, all expense resort vacations, overpaid bonusus) Is all this really that necessary If all this was properly budgeted maybe they wouldn't be in the position that they are in now. IT IS scary when the government has to step in and put their foot down on privately run business, but what choice is there if the right changes aren't being made with the money that was GIVEN (not loaned) to them. They are on a spending spree!!!!!
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Posted by ABC (+381) 12 years ago
The Wall Street Execs should be thankful that all Obama wants to do is cap their salaries. IMHO they should have their balls cut off as well.


ABC
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Posted by Dan Mowry (+1438) 12 years ago
I don't think it's accurate to portray this as something each year for all corporate levels.

*IF* your institution is failing then you may be required to be salary-capped until you become profitable or meet criteria toward repaying the loan.

*IF* you don't like it then you can do without taxpayer money in your business and do what private enterprise has done for years and take your risks/rewards on your own shoulders.


It's a choice.
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Posted by Rick Kuchynka (+4463) 12 years ago
The problem is that in times of trouble like this, the turnover at the top is high.

Anyone halfway qualified to take the helm of say Citibank, even in a good economy, would have to take a huge pay cut (at 500k) to do it. What qualified exec in their right minds would walk into one of these rolling catastrophes now, and take a huge cut in pay for the pleasure?

The more government interferes to force businesses to act like government, the uglier this recession will get.

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Posted by Buck Showalter (+4461) 12 years ago
The same qualified exec who has a choice between this $500k and that $500k.

I agree - off with their balls. They sold jobs oversees to protect their profit margins and bank accounts. Now we're without jobs or profits.

[This message has been edited by Buck Showalter (edited 2/4/2009).]
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Posted by Kyle L. Varnell (+3745) 12 years ago
They sold jobs oversees to protect their profit margins and bank accounts.

Well Buck when you're forced to pay through the nose for the employee pay and "Benefits" that the legal Mafia aka the Unions stranglehold business to I can't blame them at all for looking at their bottom line and going:

"$75 bucks per hour in the US versus $75 bucks per year with no benefits and threats of strikes overseas?"

Gee that sounds like a no-brainer to me.
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Posted by Richard Bonine, Jr (+14950) 12 years ago
Once again we are asking the wrong question. Their shouldn't be any corporate bailouts in the first place. And corporation should be able to compensate their employees in whatever manner they see fit.

I guess if you borrow money from Caesar you accept living by Caesar's rules. The problem here is that many of the banks didn't want the money but were forced to take it. Wells-Fargo is one example where this happened.
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Posted by Wendy Wilson (+6165) 12 years ago
Something about the government dictating the salaries in private industry really rubs me the wrong way. (I'm surprised all the rightie-tighties on this site haven't yet complained about that.) I can understand that we want to make sure that the money these companies get is not spent on excessive salaries but can't we just put limits on the types of uses to which the money is put and require them to openly report what they actually use the money on?
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Posted by Richard Bonine, Jr (+14950) 12 years ago
Perhaps our president is really saying that nobody receiving government funds should be compensated more than he is compensated. It's part of his "monarch/messiah" complex. What does he do (not just Obama) that is worth $400,000/year plus a $50,000 expense account, a $100,000 non-taxble travel account, and a $19,000 entertainment account? He also gets a $191,000/year pension regardless of how he performs. In these "tough economic times" I think he should lead by example and cap his own salary at $250,000. He too should have "some skin in the game".

[This message has been edited by Richard Bonine, Jr (edited 2/5/2009).]
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Posted by Bob L. (+5095) 12 years ago
Geez. Ricardo, where did you cut and paste that dishonest argument?

OK, Ricardo, let me follow your logic. Using your logic, shouldn't the worst President of all time (George W. Bush) have either:

(a) Taken a pay cut or
(b) Have his current pension of $191,000 and change reduced or eliminated?

I mean, he WAS the President when this economic malaise struck and all.
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Posted by Richard Bonine, Jr (+14950) 12 years ago
Absolutely. It was my own pre-caf idea not cut a pasted from anywhere else. My posts are usually more understandable if you read the whole paragraph not just selected sentences.

And since about the first of August this has been Obama's economy not Bush's. Once people found out what Obama's tax policies were and how much the federal government was going to spend the market tanked. It likely won't come back to Bush levels until this guy is out of office.

[This message has been edited by Richard Bonine, Jr (edited 2/5/2009).]
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Posted by Bob L. (+5095) 12 years ago
Oh, Ricardo...I see now. It's all clear to me.

The seven and a half years leading up to the collapse don't count. Obama became President in August and this resulted in an economic collapse in September.

Garsh, I didn't know an economy as large as ours could react that quickly.

I thought you said it was Jimmy Carter's fault! Make up your mind.
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Posted by JLB (+210) 12 years ago
I am sure if these execs are willing to dump their jobs if there becomes a paycap (good luck finding a high paying job in this economy) that there will be someone just as qualified willing to take a half mil salary to replace them. There are plenty out there who have the drive and smarts (and maybe better judgement) to jump on board if given the chance.
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Posted by mule train (+1056) 12 years ago
For the record...I would be willing to run Citibank or Wells Fargo for $500,000 a year, and I promise I would do a better job than the last mother [email protected] who ran them.


If you think that 1/2 a million a year isn't enough, then you are an idiot.
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Posted by Richard Bonine, Jr (+14950) 12 years ago
And I would do the Presidents job for $250K/yr. Inside of two years I can have us back to 3% growth per year and unemployment under 3%. No Problem.
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Posted by Bob L. (+5095) 12 years ago
Sure you could.
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Posted by Kyle L. Varnell (+3745) 12 years ago
Richard, with all of the lobbyists and special interests leeching around the Government I don't see how that would be possible but I'd be willing to cast my vote your way.

Are you forming an Exploratory Committee for 2012?
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Posted by Buck Showalter (+4461) 12 years ago
Well Buck when you're forced to pay through the nose for the employee pay and "Benefits" that the legal Mafia aka the Unions stranglehold business to I can't blame them at all for looking at their bottom line and going:

"$75 bucks per hour in the US versus $75 bucks per year with no benefits and threats of strikes overseas?"

Gee that sounds like a no-brainer to me.


They must all sound like no-brainers, pretty sure you couldn't handle a brainer.

This economic downturn results from shipping those jobs overseas - that's $75 an hour that this economy will never see again. C'mon - have you forgotten your Reaganomics?

Call them the mafia, but those CEO's dons are making as much money as a substantial percentage of their employees' combined wages.
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Posted by Kyle L. Varnell (+3745) 12 years ago
They must all sound like no-brainers, pretty sure you couldn't handle a brainer.

Maybe Buck, but if I were a CEO of a major company I could easily tell which would be better for my company's bottom line.

This economic downturn results from shipping those jobs overseas - that's $75 an hour that this economy will never see again

Which again is a direct result of the Union's strong-arming the companies to pay for unrealistic benefits and pay. When you forced to pay lifetime health benefits, severance pay etc for each and every person person who's no longer working for the company on top of what you're paying current employees I'd call that money poorly spent. Why are companies under any obligation to pay for an ex-employees health care anyhow? It seems to me that once you've retired from a company they're under no obligation to do anything more for you.
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Posted by Buck Showalter (+4461) 12 years ago
I don't know - I guess I'm in agreement on both accounts - I just don't think these execs deserve any sort of defense from the rest of us - it looks like there aren't many of them that deserve more than 500K - they sold out their own companies to protect the bottom line in the short term. In the years ahead we're going to look back and wonder what happened to the billions.
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Posted by Stone (+1596) 12 years ago
"Last Friday, Sen. Claire McCaskill took to the Senate floor and said what I imagine a lot of us have been thinking about Wall Street lately:

"They don't get it. These people are idiots. You can't use taxpayer money to pay out $18 billion in bonuses...What planet are these people on?"


Sen. McCaskill was reacting to the $18.4 billion in bonuses that Wall Street bankers took home in 2008. $18.4 billion going to the people who crippled our economy with their recklessness and greed and then took $700 billion of our money."
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Posted by Bob Netherton (+1893) 12 years ago
The most hilarious reply to a 500 grand cap on CEO salaries for companies receiving bailout funds is "if we cap their salary, how can we retain talent?". Why would you want to retain "talent" that led your company to needing a bailout in the first place?
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Posted by Richard Bonine, Jr (+14950) 12 years ago
Stone: I don't disagree with your quote of Sen. McCaskill. It is however, a little disingenuous to make those statements when the democratic leadership, Barney Frank, Chris Dodd, Franklin Raines, Jamie Gorelick, Obama, etc made millions off of Freddy Mac and Fanny Mae, and whose actions are at the root of the financial problems we now face.

I am looking at the "Porkulus package" and wondering what planet these people are from.

[This message has been edited by Richard Bonine, Jr (edited 2/7/2009).]
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Posted by Rob Shipley (+471) 12 years ago
Mule Train: Agree with you completely. I scrape by on one tenth of this goofy $500,000 "pay cap" inuendo. I'm single and only work about 75 hours a week in two full time jobs. Have many many many times been criticized for my knowing the TRUTH about the treachery and totally incomprehensible lawlessness of the income tax. Did not pay it for 31 years so my ca$h would not be wasted flying Nancy Pelosi back and forth from Washington,DC to California EVERY WEEKEND on an Air Force jet with an operating cost of about $8,800 an hour.
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Posted by Rob Shipley (+471) 12 years ago
Wendy: "Can't *We* just put limits on the kinds of".......yes, WE can. If WE did not swallow the unconstitutional lingo of the 128,000 pages of the Federal Income Tax regulations......WE could actually.....exactly and precisely............do anything WE ever wanted to.
However, since the International Banking Cartel owns and operates the Federal Reserve that is *****not****** provided for in the U.S.Constitution.........WE can now...........not ever ever ever ever retrieve our country from the abyss.
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Posted by Bob Netherton (+1893) 12 years ago
Anyone who doesn't believe the dead can come back to life apparently hasn't read milescity.com.

[This message has been edited by Bob Netherton (edited 2/7/2009).]
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Posted by Bridgier (+9195) 12 years ago
International Banking Cartel? Mr. Shipley seems to have a very... diverse set of interests.... constitutional law, theology, linguistics.... perhaps he'd care to share with us his views upon..... the Holocaust.
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Posted by GVC (+515) 12 years ago
[This message has been edited by GVC (edited 2/7/2009).]
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Posted by Wendy Wilson (+6165) 12 years ago
Mr. Shipley, why are you picking on me?
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Posted by ike eichler (+1226) 12 years ago
Robbie,
Congratulations, you are now eligable to be considered for a cabinet position.
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Posted by Schmitz - Matt (+402) 12 years ago
Kyle asked why any company has an obligation to pay for health insurance for retired workers. I would have to guess it's BECAUSE THEY SIGNED A CONTRACT STATING THAT THEY WERE GOING TO DO THAT. Nothing more, nothing less. And nobody held a gun to the execs heads. Business was good, and the company could afford it when those contracts were signed. So now the union employee's, and former employee's, that planned for their retirement, should just suck it up and eat 40 - 45 %, just so the execs don't look bad? You sign the deal, you live with the deal. Or you die as a company, and go the hell away. The company execs evidently weren't all that bright to begin with. So in most cases, the death and go away option is very viable. This union stranglehold crap is not worth the time it takes to talk about it. If you can't afford it, don't sign the deal. And live or die with the consequences. They call that bidness. Some companies win, some lose. Isn't that the free market?

[This message has been edited by Schmitz - Matt (edited 2/8/2009).]
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Posted by hannahdelavel123 (+12) 6 years ago
This post was removed 6 years ago.
It was removed because it was SPAM.
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