Treasury Says It Will Agree To Cap Wall Street Executive Pay
One of the major sticking points of the inevitable Wall Street bailout was executive pay -- but the New York Times says that Treasury Secretary and former CEO of Goldman Sachs, Henry M. Paulson Jr., has agreed to compensation caps for the executives of firms that benefit from the bailout.
Republican officials said Treasury Secretary Henry M. Paulson Jr. had agreed to demands from lawmakers in both parties to limit the pay of executives whose companies benefit from the bailout. The enormous pay packages of some Wall Street executives, coupled with the realization among nonwealthy Americans that the crisis could affect their financial foundations, have created an incendiary issue on Capitol Hill.
That's a good term! It's inclusive and condescending at the same time. "Nonwealthy Americans." I'm a "Nonwealthy American," how about you?
Paulson Said to Give Way on C.E.O. Pay; Bush to Speak [NYT]
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Why do they receive any pay? They should have been a good american consumer and saved for situations like this...
So if I haven't climbed on the backs of others in pursuit of the almighty dollar, I am a "Nonwealthy American"? Fine. I guess I am.
Gotta love this politically correct world we live in, we are no longer poor, middle-class, or even upper middle-class just "non-wealthy". The decline of American civilization will one day be traced back to the rise of political correctness.
eh. That's extremely annoying. And I think most, ugh, nonwealthy Americans support the executives getting nothing, since they ran the companies into the ground.
But Meg, call me an idiot and paint me pink, but isn't the author of the piece using that term, not anyone in the government?
Somehow, I have a feeling King Henry's idea of a limit and my idea of a limit are gonna differ slightly.
"compensation caps for the executives of firms that benefit from the bailout."
Well, it's a step in the right direction. Let's hope one day the government can translate this to mainstream culture. No business should be able to raise prices/cancel health insurance plans/etc. just to give the CEO a sub-prime-clusterfuck-protection bonus (I'm looking at you, WACHOVIA!). You can whine and complain all you want about it being against the ideals of a free market and capitalism; CEOs who provide nothing to a company except wining and dining clients do NOT deserve sums of money as large as these bastards are making.
If you or I did such a terrible job, you'd believe that we'd be fired without compensation. Yet here we are as taxpayers feeding money into the greed machine. Cap or no, this is idiotic.
Nonwealthy definition: you weren't CEO of a bank about to be bailed out by a guy who was also CEO of a bank being bailed out.
Hey Cocaine is expensive, do we want all of these poor CEOs to have to start using crack?
@Meg Marco: Ok, I was just confused. It sounded like something some elitist from the government would say.
I prefer to think of myself as income challenged.
How much you want to bet the cap will be so high that exec pay will still be a joke?
I would like to see them apply these pay caps retroactively. Get some of that money back that these executives were receiving while they were running these companies into the ground.
@Meg Marco: Why? Non-wealthy Americans are only like 99% of them. They are the problem! Shame on all of them for ruining America.
@The_Red_Monkey: Crack and street whores instead of Spitzer style hot ass ones. What a shame that will be.
Stick it to the execs!!! Burn the golden parachutes and never let them return!
Everyone's ripping on the executives (and with good reason), but they aren't the only ones at fault. Where were the boards of directors? The shareholders? They should have stopped the executives from taking extraordinary risks. They didn't, and they're just as culpable for the final result.
So the taxpayers have to bail out the private companies, virtually no questions asked, and the C level executives still get a paycheck.
I wonder what would happen if the taxpayers/consumers asked the private companies to bail them out of personal debt.
I owe CitiMortgage a respectable sum. I'd like them to "bail me out" and allow me to keep the house. I didn't make a slew of bad business decisions like the major companies, but it is worth a try. I'm pretty sure that Citibank would laugh in my face.
I acknowledge that I have over-simplified the scenario.
Too vague to be meaningful. Cap it at what? Are they reducing golden parachutes to only a million dollars, for example? That's a lot less than the execs might be expecting, but it's a lot more than the annual pay of people who aren't responsible for this problem...
Depends on how the define the cap. Is it, "well, we'll have to fly buisness class for Muffy's sweet fourteen party in Tahiti"? or, "Well, we'll have to sell Muffy's jet and sing 'Happy Birthday' around a sheet cake on the Jersey Shore"?
The annual salary cap will still be more than most Americans will see in their lifetime.
@DashTheHand: How 'bout we shove them out a plane with a literal golden parachute? And them, um, sell the golden lump to the poor.
Let me guess, executive pay will be capped at $50m? Or maybe a paltry $10m, with no limits on stock options? How ever will executives survive?!
The former CEO of Bear Sterns, who I might add was FIRED, got a $200m payout. How does one negotiate that? "I'm sorry I lost our firm billions and billions of dollars. But not really that sorry b/c I walked away with $200 mil."
the way i see it, these guys (CEOs, CFOs, & your various BoDs) would basically become gs-13 or gs-14, which would set their pay range to $68,000-$104,000 (no bonuses, stock options, performance pay, etc.).
oh, what's the matter - a little too nonwealthy for you? won't be able to afford that 4th vacation home on the ocean? pity.
that's the beauty of america - we all have choices. you can choose to forgo your ridiculous salaries & compensation packages & save your company, or you can forever be remembered by business scholars throughout the world as "the idiots that tanked american finance". let me introduce you to a little thing us nonwealthians practice frequently - it's called "sacrifice". get used to it - you'll be doing it a lot more lately.
\pipe dream
Gee, it's glad to know that they realize that we're Americans as well.
Does money make you stupid, or do you need to be stupid to make that much money?
Or did all the smart rich people see this coming and stand aside months ago?
At risk of redundancy, I think this is worth repeating... There is so much passionate feeling about this issue, and the bill hasn't happened yet, so I hope everyone who has had time to comment or think or read about what we could do with a cool trillion has taken time to call their representative and/ or senator... My understanding is that most congresspeople are taking comments to heart on this issue and for once, you might feel like your voice is heard...
(202) 224-3121.
How does wall street or congress define "nonwealthy"?
Ashamed to be an American today.....
Dear other countries,
Which of you does not expect the taxpayer to bail you out when private sector CEO's fail to run their businesses with acumen.
-Ax
What pay cap? It doesn't mean a thing until we find out what they are limited to. I'm glad progress is being made, though.
@NitrousO: Assuming all wealthy people backstabbed the poor is both closed-minded and harmful to others. The classics like Jobs (who gets paid $1/yr but is still weathier than most of us will ever be) or Gates or Dell, etc... who all started from hard work and an idea and rose to riches... they do not deserve your hate.
@axiomatic: Fannie/Freddie are hardly private sector. Their failure, has caused a lot of trouble in the private sector. So, its a bit more complex then that. I'm all for not bailing them out, as long as fannie/freddie go away forever.
Of course Congress is taking its constituents' comments to heart! It is making scapegoats out of a few CEOs, and punishing them by paying them excessive salaries with taxpayer money, rather than paying them with disgustingly excessive salaries.
The real issue is how long these CEOs should be sentenced to jail... which should be decided after we have impeached and recalled most of the government.
We are the change we have been waiting for!
--Barak Obama and this slogan were paid for by the American Subprime Mortgage Industry
Caps? We should be talking about how big of pentalies the CEOS and others should be paying. Rather than "limiting the amount of compensation" they we should be talking about limiting their freedom as they sit in jails rotting for destroying our economy.
This whole thing is insane. I was going to start writting a book about it about a year ago called The Currency Convergence. I wish I had.
"nonwealthy" Americans? I get it, you mean us serfs - that only work to make you richer, King Overlord Paulson.
We serfs should never question the King Overlords like Mr. Paulson. NO TO BAILOUT of Wall Street overlords!
@stevejust: Yeah, I want to see those CEOs rot in jail too!
And tax them at 70-80% retroactive to the last 5 years of their obscene profits. That should help the deficit!
@blackmage439: Or the fact that companies are required to care more about pleasing their shareholders rather than their customers or employees. Its like I can't fathom why our country allows health insurance to be 'for-profit' so that its more important to pay shareholders than pay for medical treatment and that's why so many medical treatments are denied.
The only "cap" i think is reasonable under the circumstances is either:
1. $0.00
2. Minimum Wage
3. Average annual US salary.
It's not like these guys will be hurting anyway even if they get zeroed.
@vladthepaler: I'm hoping the gubment rejects their salary for a year at the very minimum. Confiscating stock options would also be good but I doubt that'd fly.
Meanwhile in other news, I hear Virginia hasnt got enough money after the largest tax increase in the state's history to fund VDOT.
Why not skim a bit off that 700 BILLION to fund our REAL infrastructure?
Why has it taken this long for the chickens to roost? We knew from basic econ that shipping the jobs overseas and cutting our productivity for 'short-run gains' would eventually catch up to us...
Does anyone really think the banks REALLY need 700 billion? Where did that number come from? Perhaps the drop in oil prices caught a few and they deserve to pay.
All I know is the fed should say no more. No more bailing out any company whose CEO makes more than 250,000$ per year anything more means they had the money to burn. Now let them burn.
@Logical Extremes: But if we cap their pay at $0, these CEOs would leave their positions, and the companies they head will collapse...
Oh wait, I see what you did there.
Did they set a number? Is the cap a billion trillion dollars and not a penny more?
McCain asked to postpone the debate because he needed to be in washington for this... Obams said no. Friggin awesome.
I read speculation in some mainstream media that the dollar amount would be capped at the compensation of America's CEO (i.e. P.O.T.U.S.)...which is ~$400K/year.
Not me!!!!
I am "Wealth Challenged"!
What exactly did these executives do besides make exhorbitant amounts of money?
@stevejust: They need to be liable...in a civil court. Unfortunately...corporations by definition...is a protective harbor for these SOB's.
I'm nonwealthy as hell!
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