Obama caps executive pay for bailout recipients

[MoparCanuck]

Obama caps executive pay for bailout recipients

President Barack Obama has set a US$500,000 pay cap for senior executives at financial institutions that receive money from the federal economic bailout package.

Obama made the announcement Wednesday alongside his new Treasury secretary, Timothy Geithner.

The salary limit applies to all financial institutions that have signed agreements with the Treasury Department for so-called "exceptional assistance," which include AIG, Bank of America and Citi.

Any company that wants to compensate executives above the cap would have to use stocks, which cannot be sold or liquidated until the firm repays the government funds.

"This is America. We don't disparage wealth," Obama said. "But what gets people upset and rightfully so are executives being rewarded for failure. Especially when those rewards are subsidized by U.S. taxpayers."

Obama's words reflect widespread resentment among average Americans over massive bonuses for executives at companies seeking bailout funds.

Criticism of the financial industry grew after it was revealed that Wall Street firms handed out more than $18 billion in bonuses last year, even as the economic slump worsened.
"We all need to take responsibility," Obama said. "And this includes executives at major financial firms who turned to the American people, hat in hand, when they were in trouble, even as they paid themselves their customary lavish bonuses. As I said last week, that's the height of irresponsibility. That's shameful."

Companies that are still relatively stable will also be subject to the cap. However, it can be waived if they offer full public disclosure of their financial statements and after a nonbinding shareholder vote.

The new rules come before the president reveals his plans for spending what is left of the US$700 billion bailout program for the financial industry that was approved by Congress last year.

Obama is set to unveil those plans next week.

With files from The Associated Press

[Rambit]

My name is Bernie and I approve of that, like about roughly 100%!!!

Bernie

[M@ndrake]

thats a a good and gutsy move.

[GoofyTimL]

Originally Posted by Obama

"This is America. We don't disparage wealth," Obama said. "But what gets people upset and rightfully so are executives being rewarded for failure. Especially when those rewards are subsidized by U.S. taxpayers."

Should apply to all publicly elected officials and nominees as well don't ya think?

[BahrainHemi]

I do approve of it. If the company hasn't borrowed any tax payers money or for a bailout then pay all they like, its not for me to judge, but if you've taken the bailout you have a fiduciary duty to the taxpayers who in turn are now the stockholders, and it should be if it already isn't in their best interest to satisfy their stockholders given that it is them who have caused this lovely **** show (pardon my french) on Wall St.

[The Gunslinger]

Excellent move! Now we might actually see companies recovering, instead of the executives burning them to the ground and running with as much cash as they can. Go look at the liquidation of Circuit City, the CC executives didn't feel the pain of that one bit.

[Mr. iNCREDIBLE]

stick the same cap on the Big 3 and I'll approve even more..

BTW, I was at my "new" dealer today to pick up some parts and got word that the other dealership I use in the area was closing it's doors this week, I called my buddy over there and sure enough, he got his walking papers, Friday is his last day..

that makes 21 Chrysler, Dodge or Jeep dealers in my area, and the only one left is Cerritos Dodge/Jeep for roughly a 50 mile radius.


additionally Downey Ford and Downey Lincoln Mercury, who have been in my home town and family owned for 68 years closed their doors this past weekend..

[BIG SMOOTH]

Originally Posted by Mr. iNCREDIBLE

stick the same cap on the Big 3 and I'll approve even more..

BTW, I was at my "new" dealer today to pick up some parts and got word that the other dealership I use in the area was closing it's doors this week, I called my buddy over there and sure enough, he got his walking papers, Friday is his last day..

that makes 21 Chrysler, Dodge or Jeep dealers in my area, and the only one left is Cerritos Dodge/Jeep for roughly a 50 mile radius.


additionally Downey Ford and Downey Lincoln Mercury, who have been in my home town and family owned for 68 years closed their doors this past weekend..

What about Don A Vee Chrysler in Placentia?

[LSCto300C]

Awesome move. I wouldn't doubt for a second that these execs have their lawyers looking for loopholes left and right, but it's a relief to see news like this.

Now if only we could get our elected officials to pay their taxes...

[Jerad]

good...they already have enough money

"John Thain impossibly gave huge bonuses to Merrill Lynch executives with your money. That's right - you paid for Merrill's executives to get millions despite the fact that the company was a failure. God, I wish my failures resulted in multi-million dollar bonuses. I'd be able to buy California by now (and California could use the funds). But this isn't the worst of Thain's narcissism.

Thain also remodeled his office for about $1.2 million while his company was failing. Can you imagine the nerve this guy has, to spend all that money on his office - even if the company was a raging success? Thain spent $35,000 on a toilet. I sincerely hope that for that amount of money, Thain's crap turned to gold.

What the hell happens on a $35,000 toilet that makes it so special? While you're sitting on it, does it magically transport you to the Maldives?

I'm looking around my office right now. I've got a good view of L.A., a Jasper Johns lithograph ($240 for the frame), a picture of the Brooklyn Bridge that I took with a disposable camera ($220 for frame), some family photos in five separate frames ($87 total), and a desk, chair and lamp provided for me (probably cost about $250 total). And this is considered a nice office! I wonder what I'd do with a million dollars for decorating. Perhaps I'd buy 5,000 big screen televisions, turn them to the Thain interview on CNBC, shoot holes in the TV's, and then buy 5,000 more big screen TVs. And then toss them out my window and buy 5,000 more. How does that sound?

The question I have about Thain is, where is the shame? Instead of defending himself giving interviews to CNBC, Thain should be apoplectically apologizing. Not one of those, "If I've offended you, I'm sorry," fake apologies, but a real, "I suck and you should throw stones at me," apology. Then he should put on his Speedo and see if he can swim down to the Mariana Trench.

My guess is that movie-making will feature Wall Street villains as the New Bad Guys. No Gordon Gekko's, who are just greedy for greed's sake; I'm talking about Wall Street guys trying to take down the American economy, Wall Street guys working with terrorists. Because the truth is that now, across America, if you say you work on Wall Street, you're going to be thought of us a super villain.

There are no Robin Hood stories on Wall Street now; Madoff didn't steal from the rich to give to the poor. Thain didn't, either. They steal from the middle class to give to their toilets."

andanother hilarious read about the story I dont know if I can post so here is a link..