Gee, How Much Does A Bailed Out Executive Make, Anyway?

The New York Times is reporting that the Obama administration announced a $500,000 pay cap that prohibits bonuses for any companies that take additional taxpayer assistance.

Executives at companies that have already received money from the Treasury Department would not have to make any changes. But analysts and administration officials are bracing for a huge wave of new losses, largely because of the deepening recession, and many companies that have already received federal money may well be coming back.

Crucial details remained unclear on Tuesday night, including whether the restrictions would apply to all companies that receive money under the so-called Troubled Asset Relief Program, or TARP, or whether they would apply only to the “exceptional” companies that were being rescued from collapse.

The Times went on to list some executives from severely troubled companies — and their current salaries.

Kenneth D. Lewis, the chief executive of Bank of America, took home $5.75 million in salary and bonuses in 2007. His total compensation was around $20 million.

Vikram Pandit, who became chief executive of Citigroup in December of 2007, $3.1 million.

Richard Wagoner, of GM, took a $1.6 million salary. His total compensation was over $14 million.

Oh no, how will they afford custom asteroid mansions now! Perhaps there are some weekend nannerpuss-puppeting positions open to help fill in the gap.

U.S. Plans $500,000 Cap on Executive Pay in Bailouts [NYT]

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  1. Ash78 ain't got time to bleed says:

    So who thinks Chewbacca will be confirmed as Commerce Secretary? Personally, I’m pulling for the Underpants Gnomes.

  2. dragonprism says:

    This was the problem with the bailouts.

    • BlackMage is doing the Time Warp agaaaaaaain!!! says:

      @dragonprism:

      At first, I was one of the vocal few who WANTED the bailout. Why should companies fold and workers suffer because of a lousy few. But then I started thinking, and things became much clearer.

      * Companies who accepted/screamed-for the bailout have taken the money and laid off workers anyway.

      * There was no bailout when the Internet businesses “crashed” in the late 90’s, early 2000’s. There was no bailout for Circuit City, Linens ‘n Things, or the Chicago Tribune.

      * Where does the government draw the line? While I do agree that CEO pay should be capped, I’m more in favor of their pay being a flat percentage of their company’s income, rather than a monetary value.

      Name one single government-run program that has actually performed amicably during the last decade or more. The TSA? They ground innocent 8-yr-olds because their name matches a terrorist in their “database”. The FDA? I have two words for you: tomatoes and peanuts. CPSC? Death cribs, killer car seats, and lead paint. Welfare? I’ve heard stories of skanks in fur coats buying steak at Wal-Mart with food stamps.

      I’m not an economics, politics, law, or business major, so I really can’t say what the government should do to remain independent AND help to stop this recession. I just know they should do something. The one thing I do know is the current plan of blank-check writing with few strings attached only aides those making over a middle-class wage.

      • GinaLouise says:

        @BlackMage is doing the Time Warp agaaaaaaain!!!: You’ve “heard stories of skanks in fur coats buying steak at Wal-Mart with food stamps”? What are you, a 1984 Reagan speechwriter? And who wears their fur coat to Wal-Mart?

      • pb5000 says:

        @BlackMage is doing the Time Warp agaaaaaaain!!!: My wife worked at a CVS a few years back and there were a ton of customers using their welfare cards. She said that they were the rudest customers in the world and they would complain about everything. The most common complaint was that the welfare card wouldn’t cover candy, alcohol or lottery tickets. Part of my wife’s job was to take in the shopping carts from the lot and she would frequently see these same welfare card users (most were store regulars that she would recognize) pulling up in Navigators or Escalades. It’s crazy.

        Now I’m guessing that’s a small minority of welfare users, but still, if that’s happening then something isn’t right with the system.

        • henrygates says:

          @pb5000: @pb5000: No, I always see folks with their WIC cards buying milk and eggs, then run a separate cash transaction to buy high dollar electronics, alcohol, and other goods. I think it’s more common than not.

  3. Garrett Manion says:

    i approve the nannerpuss link in every post from now on

  4. nicemarmot617 says:

    I still think we should have just let all these companies collapse and the private market jump on them like sharks on chum. My Wall Streeter fiance disagrees.

    It’s one thing to regulate, but these companies had already failed. All we’re doing is tossing our life support into the black hole. Now they’re telling them how much they can make…great, cuz that will totally solve our problems!

    Wait, you mean outrage isn’t really the whole source of the economic collapse?

    • AlexDitto says:

      @nicemarmot617: I agree. Healthy capitalism is founded on companies that make poor business choices going out of business. It’s one thing if a company got screwed because of strangely structured investments, or is just on the edge and needs only a little nudge to get back on its feet. It’s another if it has continuously proven, time and again, that it enjoys setting piles of money on fire and then throwing those piles into bottomless pits.

      Just think of it as the invisible hand, massaging away the worst businesses like stress knots in a businessman’s back. So soothing, soothing…

      Why doesn’t the government put a trillion dollars into failing schools and science research and tech development. Ha! Could you imagine if someone in the senate proposed that? They’d be laughed right out of their chairs. You want some change in this country? Educate its population and let science do the rest.

      • slopirate says:

        @AlexDitto:, @nicemarmot617: Agreed. 100%

        • Inglix_the_Mad says:

          @slopirate:

          No. They “couldn’t” be allowed to collapse. I would have allowed them to near collapse, however. My bailout would have been much simpler: The board has to come to that big, ebil, gubbermint, after they would vote for it (proxy fight!). The consequences would be the company would be contracts voided, bailed out, broken apart, sold in pieces to much smaller competitors, et al. All executives above middle management would be fired, with the current government maximum (US$10k I believe) as severance. Any other employees released receive the same compensation.

          Finally, anything that’s too big to fail is simply too big to exist. Companies want to use that moniker? Your bailout is YOUR company’s end, and the end of all the CEO’s and VP’s in the company employ, since they obviously can’t run it properly.

          Any money left over after the sale is used to pay the stockholders off, but it’s unlikely there’ll be much, but it’s better than zero.

  5. CubeRat says:

    The first time I saw this posted on the homepage, it linked to an article about Petco and plastic bags.

    I refresh the page and there’s a story about some Ticketmaster merger (or something) that linked to a story about Coldplay.

    I need to go home early from work. I seem to be hallucinating again. =S

  6. thebluepill says:

    Hmm.. Most of these people have a lifestyle that requires a hefty sum of money.. Lowering that to $500k will be a huge hardship for some of those folks..

    Could you live on 1/30th of what you make now, but with 100% of the same bills?

    • B says:

      @thebluepill: I’m sure they can sell their expensive cars and houses to make up the shortfall. and if your expenses are 14 million a year, there’s plenty of places to cut back.

      • thebluepill says:

        @B:

        Selling a $10m house in this market isnt exactly easy..

        Sometimes pairing down expenses is very expensive in itself..

        No, they wont starve.. but it could be devestating.

        • My Iron Lung is Rusted says:

          @thebluepill: Waaaah. What happened to the economy on their watch was devastating, too.

        • snowburnt says:

          @thebluepill: “Selling a $10m house in this market isnt exactly easy..

          Sometimes pairing down expenses is very expensive in itself..

          No, they wont starve.. but it could be devestating.”

          I don’t think I’ll lose any sleep over it.

        • Eyebrows McGee (now with double the baby!) says:

          @thebluepill: Hey, they keep telling us all this is a market correction and it’s good for us.

          Welcome to the market correction in executive salaries. It’s good for you!

        • JollyJumjuck says:

          @thebluepill: If life gets too difficult, these people should just pull a Merckle. It would certainly save on the whining and puling that is otherwise bound to happen.

        • sburnap42 says:

          @thebluepill: Good. Given how devastating their screwups are to the economy as a whole have been, they should face devastating effects.

        • curtisawa says:

          @thebluepill: If they don’t like it, they can always refuse the taxpayer money and let the companies they run into the ground go out of business. I wonder if their unemployment benefits will be more than $500,000 a year?

        • sakimotokitty says:

          @thebluepill: You mean “devastating”, like the life savings that people have lost in the markets, or “devastating” like the hundreds of thousands who have lost their income in entirety (like me)? I’m in the unemployment line and getting ready for medicaid/food stamps. I feel no pity for these asshats. In fact, I can’t wait to see one down at the welfare office. I’d like to smack each greedy one of these bastards in the face. Angy? Why yes, yes I am.

    • Mr_D says:

      @thebluepill: Here’s an idea. They could do what other people do when their pay can no longer sustain their lifestyle: change it.

      • slopirate says:

        @Mr_D: Or instead of cutting expenses and selling off their assets they could get a job as CEO of a different company where there is no government-mandated pay cap and pray to God that our new socialist leader doesn’t nationalize it too.

        Seriously, expect a mass exodus of executives from these companies, causing the ship to sink far faster than it already is.

    • Anonymous says:

      @thebluepill: Excuse me if I don’t cry for them while they’re making 1/30th of what they’re used to, and a mere what, 10? 20? times what their company’s lowest paid workers are getting. Yes, I’d be hard pressed to survive on 1/30th of my current pay, but that’s because it would only pay for about a month’s worth of groceries, say nothing to fancy cars, multiple houses, etc.

    • TreyWaters says:

      @thebluepill: Even counting the highest salary/bonus combo listed here: 5.75 mil for BofA CEO, that nets a reduction in take-home assets of 25%. (5 million less in salary+bonuses out of 20 million in total compensation -> 15.5 million in Obama-regulated compensation).

      Could I live off of a 1/4 reduction in salary? Yes, easily.

      And out of the other CEOs listed, the 1/4 reduction is the highest. In other words, your question should have been: Could you live off of 75% or more of what you make now?

      While it makes Obama look like he doing something, I doubt most of the executives affected will notice it much, unless you cap TOTAL compensation. NOTE: Obama only mentions capping salaries and bonuses. There are many more avenues for compensation than just cash.

    • PracticalMagic says:

      @thebluepill: @thebluepill: When a person goes to a credit counselor to hopefully avoid bankruptcy, they’re told they need to buck up, tighten their belts, come up with a budget they can live with while whittling away at their debt. Pretty much a cold, hard slap in the face of reality.

      What you just said is that basically these people that have spent and spent and spent should not be bothered by tightening their belts. They’re excempt because they possibly owe millions (much more than the average Joe). Bull….. They’ve spent and or borrowed just the same as poorer people, just on a larger scale. Just as the “average Joe” has to scale down, so should they. They should be slapped in the face with reality just as anybody else who owes and is used to considerably less.

    • maines19 says:

      @thebluepill: The thousands of people who have lost their jobs thanks to the economic collapse these executives precipitated are living with a 100% reduction in salary. The executives can live with a big pay cut. The alternative is we don’t bail them out, their companies fail, and they too join the unemployment line.

      The fact that they’re even having to be told this is just appalling. People who can’t figure this out shouldn’t be in charge of anything.

    • acousticdank says:

      @thebluepill: I probably couldn’t live on 1/30th of what i make now, but at the same time, I don’t think the government would bail me out either.

    • Saboth says:

      @thebluepill:

      Lol, so they are living a lifestyle they haven’t earned, and hardworking taxpayers that are afraid they might lose their job or home are supposed to foot the bill? I guess if they can’t afford to live off of 500k, then they better find a way.

      • Eyebrows McGee (now with double the baby!) says:

        @Saboth: Everyone just finally decided America needed a parasitic aristocracy that does nothing and whines about not having enough money to do it, and gets funded by the folks who actually work!

        What, all the COOL countries have them!

    • MeOhMy says:

      @thebluepill:

      No, they wont starve.. but it could be devestating.

      If you run a 100-year-old billion-dollar company into the ground, costing thousands of people their jobs and livelihood, don’t you DESERVE a little devastation?

      Everyone else gets FIRED when they eff up on the job! Not a bonus. Not a paycut. Fired.

      Frankly, I think if you have maneuvered your company so far into the hole that you need a government bailout, your options should be: Quit or Indentured Servitude. They keep saying they won’t be able to attract good execs if they can’t help the execs maintain that cocaine-and-hooker lifestyle, but maybe the reality is that cocaine-and-hooker execs aren’t actually any good at what they do!

      • Fresh-Fest-1986 says:

        @Troy F.:

        The bluepill has the worst case of misplaced empathy I’ve seen in a while.

        If you’re looking for people to feel sorry for and throw around words like “devastating” take a quick spin to the unemployment office. Feel free to share your story about the woe’s of CEO lifestyle.

        Good luck.

    • chris_d says:

      @thebluepill:
      This is sarcasm, RIGHT?

    • bearymore says:

      @thebluepill: Oh my! They might have to sell one of the Monets in the Greatroom! I’m so sad for them.

    • MercyEleusis says:

      @thebluepill: Oh, those poor people. They might have to sell the cars and homes they don’t use.

    • adriadne says:

      @thebluepill:

      What about all the people that have been put out of work by their poor management? These are the people that have plunged the entire economy into this mess, ruining countless lives with their bad decisions. And in many cases they weren’t just bad, they were recklessly bad decisions, sometimes bordering on criminal.

      Receiving a fraction of their pay, a fraction that would provide a comfortable income for nearly a dozen of the families that they put out of work, doesn’t even come close to what they deserve.

      And so what if there is a mass exodus of executives? It’s not as if they’ve done a good job. It’s not as if they’ve done even a mediocre job. You could put Bobo the Chimp in charge of these companies and have better results.

    • drb023 says:

      @thebluepill:
      I may not give a damn about their lifestyle. But the government, nor the rest of us (unless we’re stockholders in their companies), should have no say in what these CEO’s make.

      If the government cut my pay simply because I made too much it would only reinforce why I’m working to retire in another country where they don’t confiscate my money to give it to other people.

      • Doooom says:

        @drb023: I respectfully disagree, although I see your point. I think what makes it valid for the government to have a say in the CEOs’ salaries is the fact that the companies are stating that they cannot function without the government’s money.

        If I loan a person a large amount of money, I’m going to ask what it’s to be used for. A bank does the same with me. If my spending habits lead me to be bleeding money and I ask for a bank loan to help me support faulty spending practices, the bank will deny me the loan. If a friend wants to borrow a few thousand dollars with no viable means of paying it back, I won’t loan it to them unless I’m in a situation where I can afford to never see the money again. The American people are not in that kind of situation.

        So, to me, if the companies are convinced that they need the taxpayers’ money to continue to exist, then they shouldn’t be upset when we impose limits and terms for how the money should be used.

      • WorthingtonBanks says:

        @drb023:
        I do agree that no one should dictate the salary but the shareholders, but if the company asks for government funding (read: bailout), the government just because it’s largest stockholder.

        The way I see it, the company has 2 choices
        1) Contunue running the way it is, probably into the ground. CEO deals with the company any way they see fit. Shareholders deal with it however they want. If company goes bust, so be it. It’s a free-market economy, right?
        – or –
        2) The company gets bailed out. The CEO has to either quit with no parachute or live with the restrictions imposed by the terms of the bailout.

        Just my $.02, please adjust for de/inflation and bill accordingly.

        T

        • Brunette Bookworm says:

          @WorthingtonBanks: Very true. If they ask for money from the government then I think the government has a right to place some restrictions on the company. If they don’t ask for it, then no restrictions on the money….OR, instead of asking for millions, the top executive could cut their pay to say…even just half of the millions each year might come up with the money they need. Lots of people who aren’t executives have to take paycuts or not get bonuses when the company they work for has financial troubles, why should they be different?

      • MeOhMy says:

        @drb023:
        Well if you’re running a business and you don’t want the government to cut your pay, there’s an easy way to prevent it:

        Don’t ask the government for a bailout!

    • edosan says:

      @thebluepill: Seriously, you’re being sarcastic, right?

      You don’t really need someone to explain that going from $30 million to $1 million isn’t the sane as going from $30K ti $1K…

    • Mary Marsala with Fries says:

      @thebluepill: Better question: Is it reasonable to ask someone to cut back to a lifestyle that half a million dollars a year (that’s 40K a month, or 10K a week, roughly) can support?

      Especially if that someone has probably asked thousands of other people making less than 100K to take hefty paycuts?

      I say hell yeah. And ABOUT DAMN TIME.

  7. Yossarian says:

    I’d be perfectly willing to run GM into the ground for only $400,000 a year.

  8. Ash78 ain't got time to bleed says:

    The problem is the cap is arbitrary. I can completely stand behind covenants and restrictions, but doing this is just going to drive a lot of compensation underground and off the books.

    How about they just stick with a total salary allotment per head, based on NAICS company type and size, then let the people in the comany decide how to divy it up? When everyone is trying to grab onto the same compensation pool, they’ll have to allocate it efficiently. And demand full transparency of exec pay in these companies, even if it’s privately held.

    • downwithmonstercable says:

      @Ash78: That’s an excellent point, hadn’t even thought of that. Arbitrary caps really don’t make a lot of sense. Covenants and restrictions baby!

    • oneandone says:

      @Ash78: That’s a great idea. I think your characterizing it as ‘grabbing’ might turn some people off, but it would be efficient, fair, and improve company morale/cohesiveness/productivity.

      My college does a similar thing with student groups – they allocate a certain amount every year for student groups, which is divided among the groups by their council, in which every group has a representative and a vote. It is a fierce process trying to get any extra funds out of that group, and they are much more thorough and demanding than any university administrator would be. Peer oversight & veto is powerful.

      But I doubt the execs would want to contemplate what would happen if their workers were suddenly ‘peers’.

    • FaustianSlip says:

      @Ash78: Actually, I just heard Bernie Sanders saying in an interview that originally, a $400,000 cap was chosen because that’s the salary of the President of the U.S. The reasoning was that if you can’t even maintain your business, you probably aren’t justified in earning more than the so-called “leader of the free world.” So they didn’t just pick a number out of a hat. And I think I agree with the thrust of what they’re saying, actually.

  9. Hoss says:

    We’re all now investors in these companies, thanks to the bailout. As an investor — I personally would like smart executives that make enough to care about the company.

    • maines19 says:

      @Hoss: The executives who made buckets of money clearly weren’t smart enough to keep their firms afloat without taxpayer rescue. Obviously large salaries were not enough to assure that. Seems to me the incentive of staying in business and keeping their jobs ought to be sufficient.

    • chris_d says:

      @Hoss:
      Maybe money isn’t everything, ’cause $30 million a year can’t make you care about something, how much money will it take?

      Just a casual observation, the worst executives tend to have the highest compensation. It’s probably because they know they suck and they’re trying to get as much $$$ as possible before the company fails or the unlikely event that they get thrown out due to their incompetence.

    • papahoth says:

      @Hoss: They cared enough to lose billions and help lead a world-wide financial collapse. Is that they type of care you meant?

  10. Anonymous says:

    I was listening to the Planet Money podcast the other day and they made a good point: even though these executives’ salaries are huge compared to what most of us make, they’re a tiny fraction of the billions of dollars they’re receiving in bailout money. Limiting their salaries won’t really make a difference.

  11. IT-Chick says:

    So now there will be abandoned mansions facing foreclosure?

    • wardawg says:

      @IT-Chick: That’s okay, at least they’re being encouraged to squat in their foreclosed mansions by congress.

      • megan9039 says:

        They have been making the money for years. They still managed to run the company into the ground and still make a fortune. Maybe, hitting them where it hurts might change their tune.

  12. Jevia says:

    One of the suggestions some credit counselors make is to rent out those extra rooms in your house. I’m sure these CEOs have plenty of empty rooms in their mansions that they could rent out to people who lost their homes in foreclosure.

    Another interesting fact I learned today, the Baseball Commissioner makes 17 million. Course, baseball isn’t going bankrupt, but gotta wonder how many people/companies will be bucking up to renew those season tickets.

    • chris_d says:

      @Jevia:
      Sports teams have gotten so much government money that they’re probably in the same league as the big banks, no pun intended.

  13. Brian Chappell says:

    Thank goodness – these clowns do not even deserve 100k/yr imo.

  14. wow_just_wow says:

    Linking executive pay to the stock price won’t solve the problem – they’ll just be higher turnovers. CEOs will over inflate the stock’s high (again) and then “retire” before it falls.

  15. razremytuxbuddy says:

    I’m totally okay with the $500k cap, for a whole host of reasons. I’m sure if these execs perform as needed to get their companies out from under the need for taxpayer bailouts, they will have earned substantial bonuses. But, up to this point, they don’t deserve the benefit of the doubt, as they helped to create the situation they and their companies are in.

    In the meantime, they also need to practice looking for cost-cutting measures, which they obviously aren’t doing much of on the job. At home, they won’t have a choice if this cap goes through. However, I’m sure that with the cap, these individuals still won’t be living paycheck to paycheck, as many, many of their companies’ customers do.

    With any luck, the salary cap will lead to more turnover in these positions, so these self-important albatrosses can be replaced with qualified individuals who are interested in proving themselves.

    • HIV 2 Elway says:

      @razremytuxbuddy: They helped create the situation they and their companies are in.

      Nov 7, 2007 – Citigroup CEO Charles Prince resigns
      Jan 22, 2009 – Bank of America CEO John Thain resigns
      June 2, 2008 – Wachovia CEO Kennedy Thompson resigns

      How did the people now running the companies get their predicesors into this mess?

      • Karita says:

        @HIV 2 Elway Resurrected: But it wasn’t just the CEOs that ran these companies down. It was a whole collection of higher-ups, the majority of whom are still in the same positions. The CEOs may be the public faces of the companies, but there are plenty of others who share the blame.

      • You Cannot Untoast says:

        @HIV 2 Elway Resurrected: Besides what other commenters have said, all these CEO’s pretty much seem cut from the same cloth. Y’know. Judged by the company you keep and all.

    • Fresh-Fest-1986 says:

      @razremytuxbuddy: When you start talking about cost cutting measures you have to realize that these people have no concept of money the way you and I do. That’s why huge bonuses and spending frivolously continues to this day.

      They’ve lived this lifestyle and had these habits for so long it’s like asking a serious drug addict to “just curb back a bit”. Not only will it not happen, they have no idea what your even saying.

  16. ironchef says:

    these CEOs do it for stock options anyways. The reason why those $1 a year CEO love the stock options is because it’s not taxed like personal income (no FICA and such; and they get to pay lower capital gains if they hold it for 18 months.)

  17. RedSonSuperDave says:

    As I frequently say on here, we need to make the “golden parachute” a literal reality. If you run a huge company into the ground and then ask for a bailout, fine, but you then get a choice between your “severance package” and a parachute seconds before we toss you out of a plane.

  18. logicalnoise says:

    oh NO! what if they have to refinance? You know the market today banks aren’t lending to anybody.

  19. jsbeagle says:

    Tough luck for everybody’s retirement plans that rely on the stocks of those companies. Now the companies won’t be able to grow.

    The good execs won’t have any incentive to work at a struggling company (that really needs the experienced help), and will go work elsewhere in the private sector. The bailed out companies will have to settle for the same idiots that aren’t good enough to actually work in their industry and work as college professors.

    • Saboth says:

      @jsbeagle:

      I know right? The jobs market is hot, hot, hot right now. They will have no problem finding jobs immediately. Especially with credentials like “I was head of a failing company that required government bailout in order to maintain operations.”

      • Karita says:

        @Saboth: lol

        @jsbeagle: As I stated in a comment on the earlier article, there are plenty of people who are highly capable, experienced and willing to work for less than multi-million dollar salaries. Ego and concern for others are both big primary motivators for a lot of people.

      • TreyWaters says:

        @Saboth: See, that’s why they make the big bucks…

        CV line without wit: “I was head of a failing company that required government bailout in order to maintain operations”.

        Their CV line: “Secured grant monies from government leaders in order to grow business.”

  20. balthisar says:

    There’s not even a fine line between being a consumer advocacy/news organization, and expressing editorializing, petty jealousy. For shame!

    Class jealousy is never ending. First we’ll go after the guys that make more than $1 million, then we’ll go after the guys that make over $100,000, and then the rest of you will come after the rest of us that make over $30,000, because, you know, once you’re limited to $30,000, how are us uppity rich folk going to afford to buy brand name soda-pop?

    • ras_d says:

      @balthisar: I do agree with your basic point about class jealousy and trying to bring down those who are more successful than ourselves. It reminds me so much of Atlas Shrugged, but on the other hand, I do believe that these CEOs are in a position to really take advantage of the system and overpay themselves. Shouldnt their pay and bonus structure be tied to company performance? All these banks and corporations are crumbling, and these guys are still bringing home millions of dollars.

      Plus I totally agree that if your company requires a federal bailout, then all employees inc. CEOs must be required to abide by whatever guidelines the fed sets forth. As far as I am concerned, I am their boss now.

      • speedwell (propagandist and secular snarkist) says:

        @ras_d: Even in Atlas Shrugged, many of the executives who were in charge of operations built on graft and fraud lost their jobs and credibility at the end of the story. That was sort of the point, really. Dagny bailed, Taggart Transcontinental got took over by the looters, and Eddie Willers, one of the good guys but still a muck-a-muck, was left weeping in front of the symbol of TT’s massive failure.

        I’m not one of those who thinks Ayn Rand should be the guru of all things economic, but damn, being a high-level executive means accepting a post of responsibility for the actions and inactions of the company. Responsibility, remember that word? It means you’re where the buck stops. That’s what you get paid for. If you fail to demonstrate responsibility and you ignore accountability, then you should not get paid for being responsible and accountable. Simple.

      • varro says:

        @ras_d: Isn’t the point of “Atlas Shrugged” that the rich people actually produce things?

        The only thing these executives produced is a bucketful of FAIL.

    • mariospants says:

      @balthisar: I think the “class jealousy” is exacerbated by the fact that the reason these people continue to make such large salaries is thanks to the tax payer. It’s a public debt so their compensation becomes public business (much like if this were a publically-traded company where the stock holders and board of directors have a say in executive compensation). If this were a privately-held company then nobody would care how much the VPs make.

    • You Cannot Untoast says:

      @balthisar: Ah, I see. You’re planning on being a Fortune 500-er someday. FYI, statistically, it ain’t happenin’. But keep defending those assholes, just in case.

    • balthisar says:

      No, I agree with make your bed; now sleep in it. I was referring to the stupid quote in the article, “Oh no, how will they afford custom asteroid mansions now!” It’s childish and envious.

      You Cannot Untoast: It has nothing to do with illusions of being a Fortune 500’er any day (well, I’m in a Fortune 7 company). It has everything to do with not wanting to be at the top of the class warfare target list once people like you have decided that all of the rich “assholes” are gone. The fact is, if I have a better life than you, and all of the people that have it better than me are gone, I’m the next rich “asshole” in your lynching party. But don’t you worry, once you topple me, you’re next in line from the even poorer people (assuming you’re not already on the bottom, friend).

      • You Cannot Untoast says:

        @balthisar: It isn’t the rich part that angers me…it’s the asshole part. It’s the neverending greed. It’s about undeserved dues.

        And if you start a company, prove yourself to inept to run it and then the taxpayers have to save your ass, then yes, you should be punished. I think the 500,000$ cap is far too generous.

        As for the personal attack – no, I’m forutnately not on the bottom. However I live modestly, and I appreciate what I have in love and life. How much does one person need?

        Finally, being working for a Fortune 500 company isn’t the same as being “one of them”. But thanks for wagging your dick in everyone’s face.

        • balthisar says:

          @You Cannot Untoast: Glad you have a good sense of humor, mate. To be honest, though, there was no personal attacks; just a bunch of “ifs.” And I was only wagging my appendages in your face. ;-)

      • MeOhMy says:

        @balthisar:
        I think you should bear in mind that this cap only applies to businesses seeking federal bailout money.

        We haven’t jumped that far into the socialist deep end.

        Not yet, at least.

    • sburnap42 says:

      @balthisar: Thinking someone who has been, objectively, a massive failure as a CEO doesn’t deserve $20 million isn’t “Class Warfare”. No one here begrudges Bill Gates his billions and no one is saying executive salaries overall should be limited. The idea is that if you are such an idiot CEO that you have to come begging the government for our tax money, you shouldn’t be getting millions.

      • balthisar says:

        Like I already reiterated above “No, I agree with make your bed; now sleep in it. I was referring to the stupid quote in the article, ‘Oh no, how will they afford custom asteroid mansions now!’ It’s childish and envious.”

  21. My Iron Lung is Rusted says:

    How is this class jealousy? When my kids get out of control, they get grounded (privileges restricted) until they can prove they can handle responsibilities and make better decisions. That’s exactly what this is, except the CEOs even have the option of going someplace else (ie, running away from home).

    This is simply resetting the scale back to the bottom. When the CEOs in question, or their successors, can once again prove that they can manage their companies properly, they’ll get their money again. It might be worthwhile to get some of the same old faces who keep circling through different companies (with similar outcomes) replaced with fresh perspectives.

    • speedwell (propagandist and secular snarkist) says:

      @IronLung492: Indeed. The whole reason they get paid the big money is because they accepted the responsibility for the company. No need to whine about them being held responsible, is there?

    • Xerloq says:

      @IronLung492: You’ve got some learnin’ to do ’bout civics, son.

      The shareholders and board are the ones to whom the CEOs are responsible. They are not responsible to the gub’ment.

      See, the way it works is the people are supposed to be the boss of the government, not the other way around. How is the cap going to help us now? How is it going to help you pay your bills and rent or mortgage? How does it ‘stimulate’ the economy? It doesn’t. It only serves to massage the pride of those who are envious of the super rich.

      The other CEOs with golden parachutes have already landed.

      Now, in order for the gub’ment to hold CEOs responsible, they have to have violated a law and not some ambiguous situational-ethics mantra. But why punish those who can step in to help when the ‘criminals’ have already gotten away?

      @speedwell, avatar of snark: The reason they got their bonuses is because they filled their role as defined by the board and shareholders.

  22. concordia says:

    Dude in the picture looks like an old Dwight Schrute.

    Bears, Beets, the American economy.

  23. ohayou_kun says:

    Communism, America look into it. A CEO walks away with several million for sitting on their ass and twiddling their thumbs, while your low wage lackey gets the smack down. Communism, it has some good qualities, or better yet. BECOME CANADIAN! A lovely mixed economy we have you know. We’ve got Alanis, and Maple Syrup. Better than Vikram and his 3.1 million eh?

  24. AtomicPlayboy says:

    Is it fair for the government to impose salary caps on companies which are taking government aid to stay afloat? Yes.

    Is it wise? No.

    Find someone competent enough to not only manage a company of such scale but to rescue a large company at a time of economic peril who is willing to work for $500k/yr, and I’ll show you the pink elephants living on the dark side of the moon. Yet another bad aspect of this bailout nonsense: what sort of ambitious, talented business leader wants to work for a dying company in government receivership when he can make more money and have more executive freedom anywhere else?

    • speedwell (propagandist and secular snarkist) says:

      @AtomicPlayboy: Did you think the bailout was supposed to be a solution? Hell, no. It’s just an expensive pillow tied to the ass of the company so the fall won’t hurt quite as bad.

    • Saboth says:

      @AtomicPlayboy:

      Let me tell ya, if you have the know-how and gumption to swoop in, accept 500k pay AND turn one of these companies around, you can write your ticket to any job you want, because you get results, and show you can roll up your sleeves and get er done.

      Now, if you are just another piece of scum that needs 10 million dollars just to crash and burn a company while laying off 20k employees…how again do you deserve that pay, and how again would anyone else hire you?

      Lets face it, it is all just one big “Good ‘ol Boy’s Club.” You scratch my back, I scratch yours. Most of these guys want to jump in, collected their golden parachute, trim costs by cutting jobs (wow, ingenious…worked well for circuit city didnt it?), and to get out of there. Don’t make them out to be some kind of financial wizards, because they aren’t.

      • AtomicPlayboy says:

        @Saboth: I think you’re letting your anti-corporatism cloud your judgment. If you’ve actually spent any time working with executives, you’d know that they are typically not the silver-spooned, back-scratching twits you make them out to be, but rather quite intelligent, motivated, and resourceful people who perform their functions quite well in a highly competitive ecosystem. This bailout boondoggle, and the attendant classist rhetoric, highlight a huge misunderstanding on the part of the general public regarding businesses and businessmen. The current “eat the rich” attitude is as counterproductive to solving our current problems as it is silly and simplistic.

    • Xerloq says:

      @AtomicPlayboy: I agree with you, except you should change “fair” to “legal.”

      Fairness is arbitrarily defined by most people, and does not always mean equitable. Usually “not fair” means “my expectations were violated.”

  25. Anonymous says:

    This is a great idea. Shovel stolen taxpayer money into the maws of horrifically mismanaged corporations, and then prevent them from hiring capable talent, ensuring a 100% loss of the government’s “investment” pork. Execs capable of saving corporations are not going to work for 500K, and will instead go to corporations that can pay them what they are worth, being significantly above 500K. Obama no doubt is aware of this, and will cynically exploit this pre-determined failure to demand more power over the economy, and more money stolen from your wallets.

  26. kwsventures says:

    I could have driven all these banks into the dirt for much less compensation. Then, again, I would have only allowed 1 type of mortgage loan — fixed rate 30 years with verified income only. That is it. No exotic loans under my watch. We never would of had the real estate bubble and crash.

  27. FunkmasterC says:

    It’ll be interesting to see if any CEOs bail on their companies due to the restrictions amd join healthier competitors. Retention of top execs is an important part of companies.

    Or maybe they’ll just find ways around the law with clever book keeping or getting paid in options. These people didn’t get to where they are by following the rules perfectly.

  28. cosby says:

    I have an issue with this if they try to push it to every company that took the money. In the case of the bank bailout a few banks were pretty much forced to take the loans because the others needed it. Pretty much everyone got the cash to try to prevent a run on the banks. Why should the banks that had to take the money be forced to these restrictions?

  29. hustler says:

    I think rather than cap salaries of corporate welfare recipients, we should just give them boats and shit instead of money. Just pick a bunch of random shit that will bump up GDP, and give them that crap as payment. That way the white house can stimulate the economy, and support the illigitimati of corporate kings. Its not their fault this all went wrong, its the tax payer.

  30. kingdom2000 says:

    Once thing I am unclear on, does this cap include just wages or is in all encompasing so bonuses, salary, incentive pay, commission, and other creative names used to pay companies top tier huge sums of money?

  31. slopirate says:

    It’s time to standardize the spelling of nanerpus/nannerpus/nanerpuss/nannerpuss. Personally, I’m partial to nannerpus. However, I wouldn’t argue against dropping the extra ‘n’.

  32. swintronix says:

    Ken Lewis and Bank of America took relatively less than any other bank, as far as bailout money goes. They didn’t actually need it, as ARMs and other sketchy mortgages were never their bread and butter. Bank of America has been trying to save our economy, picking up lamed competitors at the behest of the US government. But somehow, BAC is the new face of evil, especially around here. They agreed to take Countrywide and Merrill Lynch, as it was in the best interest of the USA. BAC has never been in danger of going under, and accepted a small amount of the bailout money as a good faith gesture to the governement. For a garganutan company, BAC is doing it’s best to live up to the responsibility of being #1.

    • papahoth says:

      @swintronix: ” As ABC reported, Bank of America took its $45 billion in bailout funds and sponsored a five-day carnival outside the Super Bowl stadium, and Morgan Stanley took its $10 billion in bailout money and held a three-day conference at the Breakers in Palm Beach. (Morgan Stanley had also still planned to send top employees to Monte Carlo and the Bahamas, events just canceled.)

      The New York Post revealed that Sandy Weill, former chief executive of Citigroup, took a company jet to fly his family for a Christmas holiday to a $12,000-a-night luxury resort in San José del Cabo, Mexico. No matter that the company just got a $50 billion federal bailout and laid off 53,000 worldwide.

      The interior of the 18-seat jet, as described by The Post, is posh, with a full bar, fine-wine selection, $13,000 carpets, Baccarat crystal glasses, Cristofle sterling silver flatware and – my personal favorite – pillows made from Hermès scarves.”

    • papahoth says:

      @swintronix: Oh and what is relatively less that BoA took? They took $45 billion, the same as Citi Bank. JPM Chase — $25 billion, PNC — $7.6 billion, Mellon — 3.3, Key — 2.5, Comamerica — 2.25, and M&T only $400 million. Relative to what?

  33. kwsventures says:

    By the same line of thinking, if you accept a taxpayer funded college education loan, some bureaucrat can tell you what to major in, what college to go to and how much money you can make when you use that college education to get a job. Obama and the majority of congress are headed to heavy duty socialism with plenty of government central planning of the economy. It has only been 2 weeks and I can see that train coming down the track. No real surprise. “Spread the wealth around”.

  34. Corporate-Shill says:

    A bunch of middle managers are getting pay decreases.

  35. Anonymous says:

    This kind of crap really bothers me. All these idiots making millions that don’t know anything about running a company. Every company should have a cap. None of these bozos deserve what their getting. Meanwhile the other 97% get paid peanuts and their the ones really running the company. Corporate America Bullshit. The salary disparity between middle class and upperclass is ridiculous and hasn’t changed in 80 years.

  36. ageshin says:

    Gee they won’t be able to make it on only $500,000 a year. The upkeep on the five homes, boats, privet aircraft, not to mention butlers maids etc. Maby they too will start having problems with morgages and making ends meet.

  37. lakecountrydave says:

    As part of the bailout we need to insist on new management. It is an absurd argument that we must pay these “expirienced” people an insane amount of compensation in order to retain them. They are the ones that crashed the bus. Their experience is not what I would call a good reason to keep them on the payroll. If they understood their jobs they would have avoided this mess. The experience of these bigwigs that these companies covet is their political connections. If these companies dedicated the effort they put into seeking quick profits from deregulation into actually earing honest money they would be solvent. If the guy checking receipts at Walmart did his job so poorly that the evil empire needed a government bailout I doubt that he would be offered the same or even allowed back on company property. In addition, I doubt that Kmart and Home Depot would engage in a bidding war to sucure his services. I also believe that the stock option should be included in the cap instead of having a giant loophole.

  38. Feminist Whore says:

    I was just toasting an english muffin, and the TV was on in the background. The subject was the pay-caps,

    the newscaster said “The CEO of (i can’t remember!) says that his company should repay the nearly 20 billion they were given in bailout funds in order TO AVOID THE PAYCAPS.”

    Are you fucking kidding me? Really? That’s the reason you should REPAY THE FUCKING MONEY…..?

    K I NEED WHISKEY!

  39. UX4themasses says:

    @thebluepill: This is the kind of comment that a bloated CEO would respond with.

    Let’s do the math.

    If I’m making 13 MIL and now I’m taking in only 433K a year, I think I can still put food on the table. No one cares about the 20000 UNEMPLOYED who can’t put food in their kids mouths let alone theirs.

  40. Anonymous says:

    I live in Michigan…people here are losing their jobs left and right. My father and his wife (both at different companies) were told that the workers had to take a coupole of weeks off with no pay or lose their jobs….now thats like a pay cut if the execs. can make the workers take a pay cut (for the good of the company) why can’t they????

  41. admiral_stabbin says:

    Anyone who agrees with this cap must be crazy! Have YOU ever tried living on half-a-million USD per year?
    You have to start clipping coupons if you want to keep putting gas in your CLS550…

  42. vladthepaler says:

    That’s an excellent idea, capping their pay, long as it can be done without loopholes.

    Though it would be even better if the pay cap was based on the wages of the lowest-paid fullt-time employee… Say, the highest take-home pay in the company can’t be any more than 20 times the lowest pay.