President Obama and Treasury Secretary Tim Geithner have announced a $500,000 maximum wage for employees of companies that receive taxpayer support. The rule will only apply to companies that receive future bailout funds. Oh, also, you’re going to be bailing out more companies.
In his remarks, President Obama attacked “executives being rewarded by failure,” and argued excessive severance packages and bonuses for companies receiving federal money were in “bad taste.” Bailed out companies will be required to disclose and justify perks and bonuses to taxpayers.
Responding to Obama’s plan to “take the air out of their golden parachutes,” a business consultant said:
“That is pretty draconian — $500,000 is not a lot of money, particularly if there is no bonus. And you know these companies that are in trouble are not going to pay much of an annual dividend.”