Obama to curb executive pay for bailout companies

[Arlos]

Now, I am sure everyone else was just as pissed as I was about the 18 billion Wall Street companies gave themselves in bonuses using bailout money. (WTF, without massive intervention your companies would have gone under, WTF do you DESERVE any bonuses?) Well, something is being done about that now:

Pledging to take "the air out of golden parachutes," President Obama announced Wednesday that executives of companies receiving federal bailout money will have their pay capped at $500,000 under a revised financial compensation plan.

Last year's "shameful" handout of $18 billion in Wall Street bonuses "is exactly the kind of disregard for the costs and consequences of their actions that brought about this crisis: a culture of narrow self-interest and short-term gain at the expense of everything else," Obama said to reporters at the White House.

"For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis isn't just bad taste -- it's a bad strategy -- and I will not tolerate it. We're going to be demanding some restraint in exchange for federal aid -- so that when firms seek new federal dollars, we won't find them up to the same old tricks," the president added.

Under Obama's plan, companies that want to pay their executives more than $500,000 will have to do so through stocks that cannot be sold until the companies pay back the money they borrow from the government.

The restrictions will most affect large companies that receive "exceptional assistance," such as Citigroup.

The struggling banking giant has taken about $45 billion from the government's Troubled Asset Relief Program.

The new rules also will mandate that shareholders of banks have a greater say about the salaries paid to company heads. The measures will put in place greater transparency for costs such as holiday parties and office renovations.

Obama also pledged further reforms in the future, promising that the administration will "examine the ways in which the means and manner of executive compensation have contributed to a reckless culture and quarter-by-quarter mentality that in turn have wrought havoc in our financial system."

"We're going to be taking a look at broader reforms so that executives are compensated for sound risk management and rewarded for growth measured over years, not just days or weeks," Obama said.

Hallelujah.

-Arlos

[Drem]

fuck yeah

[Lueyen]

I guess I'm all about extremes.

My conservative side says screw em, don't even give them a bail out.

My liberal side says well if we are gonna do it, Obama didn't go far enough. Instead of capping their wage at xyz dollar amount stipulate that they find the lowest paid employee in the company and cap their wage at the same amount until the money is payed back.

[KaiineTN]

Yeah, we shouldn't have bailed them out... But honestly, what do you fucking expect? I'd LOVE to see how the Fed has been spending the money we authorized them to, but they have absolutely 0 oversight by Congress. It's compeltely private. I bet if that was exposed, we'd see the same type of shit happening.

[Harrison]

It's not retroactive so, who gives a fuck?

Those crooks just pocketed our money and took off with it laughing all the way to their own bank.

[Lionking]

Welcome to the U.S.S.A.

[Gypsiyee]

My liberal side says well if we are gonna do it, Obama didn't go far enough. Instead of capping their wage at xyz dollar amount stipulate that they find the lowest paid employee in the company and cap their wage at the same amount until the money is payed back.

don't you think there's a pretty big difference between capping money used by those who caused the problem for excess frills in their lives and taking earned money from those who had nothing to do with the issue just trying to make ends meet...? that's not the liberal in you, shortcake.

[brinstar]

i think you missed something

he meant cap the EXECS' pay at the same level as the lowest-paid employee in the company until the money is paid off

[Gypsiyee]

aha, now that makes more sense in context. reading comprehension at 6am ftl.

[Kramer]

yeah, it's a good move, but you have to wonder about a government that has that much power int he first place because it owns private businesses....

and i'm with harri on this one, seems like WAY TOO LITTLE too late.

[Arlos]

Ahhhh, but the government isn't capping the pay in its role as regulator, it's doing so in its role as STOCKHOLDER. If you get enough stockholders together at *ANY* public company, you can vote a cap on executive pay there too.

Also, note that the pay isn't precisely capped. As noted in the article, you can still pay more than 500k, it's just that anything over that amount has to come in the form of stock options that cannot be sold until the government is paid back. Not only does that give more incentive to get the government an actual return on its bailout investment (which means we the taxpayers aren't saddled with it long term), it could mean big money if the firms turn around and regain actual value in the market again.

We saw this back in 1979 with the Chrysler bailout back then. I know most of you weren't even born then, but the government bailed out Chrysler then to the tune of 1.5 billion. In return for the bailout, Lee Iacocca, then the president of Chrysler, had his compensation set to $1 plus massive quantities of stock. When the company rebounded, the government got paid back and actually made money on the deal, and then once the government AND the stockholders got their money, Iacocca was free to sell, and made shit tons of money.

Huge difference between how he handled it and how the current generation on Wall Street is doing so, eh? He was willing to have a personal stake in betting on his company's turn-around, and by doing so not only did he give confidence to the shareholders and the government that he was being responsible with the money, but he also ended up personally making MORE money than he would have if he'd stuck to a standard compensation package. Compare that to Wall Street disappearing the funds into a black hole, spending taxpayer money on perks and billions in bonuses despite abject failure... Ahhh, for the days of yore....

-Arlos

[Kramer]

Ahhhh, but the government isn't capping the pay in its role as regulator, it's doing so in its role as STOCKHOLDER

that's the problem... The Government ISN'T the stockholder.... the american people are the stockholders... but the government is going to act as if it is all of us.

i have no interest in being forced to invest in comapanies i don't give a fuck about and were driven into the ground.... how about NOT giving MY tax money to failed and/or unethical businesses and letting ME decide what the hell I invest in or save????????

[Arlos]

What you're asking for is just as impossible as me not wanting my tax dollars to go towards the war in Iraq.

-Arlos

[Eziekial]

Right Arlos, so instead of trying to change that you just support that system, nay encourage it. Then 4 or 8 years from now when someone else takes over you go back to screaming foul again.

[ClakarEQ]

Not coming to Arlos' defense, well I guess a little bit, but I don't think anyone on this entire board was for the bank bailout, I and a few others viewed this as a lesser of two evils but I didn't see anyone say "WOOOT, the banks are gettng our money YEAH!!".

In truth I think what Obama is doing in this case is great, however the conservative in me, and there isn't much mind you, is cautious of the GOV reaching into a company like that, even though it is our money he's trying to protect.

[Lueyen]

In truth I think what Obama is doing in this case is great, however the conservative in me, and there isn't much mind you, is cautious of the GOV reaching into a company like that, even though it is our money he's trying to protect.

Just wait until it's not your money they are trying to protect. Wait until it is all financial institutions or all US companies.

[brinstar]

oh no socialism

let's hide under the fucking bed

[Lueyen]

You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is the end of any nation. You cannot multiply wealth by dividing it.

No I won't hide under a bed, I'll fight socialism tooth and nail. It is the next logical step on the path to communism. It is also incongruent with the basic ideals on which this country was founded. You do not bite the hand that feeds you, once you allow government to control the pantry you become a subject, not a free man.

If you think that last statement sounds extreme taken literally, consider this: If you consider health care a universal right, how could you not consider food to be a universal right.

[Drem]

If you consider health care a universal right, how could you not consider food to be a universal right.

That was a great Adrian Rogers quote. I'm sectioning out this part of your post because what he described, and what you're correlating to universal health-care, already happens every day. It's called food stamps. And I hate them with a passion. If I'm a student, busting my ass to better myself, but I don't work over 20 hours a week on top of my thousands of dollars and hours I put into college, I can't get stamps. But someone with no job and no ambition can go and get $150 a month, or even $200+ if they have kids. I HATE IT. it's SO wrong to me

[Arlos]

Yessiree, lets let people starve! Brilliant!

[numatu]

I'm not sure Drem said "let people starve." He said he hates them because of the selection process. And it's entirely true that the selection criteria for many need-based programs runs counter to what the programs are designed to do.

Food stamps were originally designed as a temporary program to help poor families or individuals get the food they need because their basic living costs took out what could be spent on food. Now it's simply a giveaway to those who refuse to work.

There are many programs in my town alone that feed people every day. Just because food stamps aren't deposited to your personal card doesn't mean people have to starve.

Also, when programs provide actual food instead of the currency to buy food, there's much less chance for fraud and corruption. Food stamps can and are traded for drugs frequently, while children continue to starve, further rendering the program inefficient and unproductive compared to other methods.

[Gypsiyee]

Also, when programs provide actual food instead of the currency to buy food, there's much less chance for fraud and corruption. Food stamps can and are traded for drugs frequently, while children continue to starve, further rendering the program inefficient and unproductive compared to other methods.

I absolutely agree with this. I think the main problem with implementing another program, though, is that each family is going to have different needs based on the makeup of their household. Peanut butter is not a staple for a family with severe peanut allergies and diapers are not a staple for families with older children, for example. This would mean different packages provided for millions of different families and it would be incredibly work intensive to ensure proper distribution on a week by week or whatever have you basis. In the end, it'd probably cost more to run such a program simply because of the labor it would require to organize. Food banks and soup kitchens are good and well, but not always feasible and also labor intensive - not every community is going to have the volunteer base. The way the current system is abused is unfortunate; I'm just not sure there's a better way to do it currently that wouldn't be vulnerable to the same abuse.

[Tossica]

You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is the end of any nation. You cannot multiply wealth by dividing it.

No I won't hide under a bed, I'll fight socialism tooth and nail. It is the next logical step on the path to communism. It is also incongruent with the basic ideals on which this country was founded. You do not bite the hand that feeds you, once you allow government to control the pantry you become a subject, not a free man.

If you think that last statement sounds extreme taken literally, consider this: If you consider health care a universal right, how could you not consider food to be a universal right.

You are a nutcase. Without government intervention the almighty dollar would be number 1 priority 100% of the time. Unfortunately profits and what's best for EVERYONE not just the stockholders is not usually the same thing. So here's the compromise: We elect officials that will allow people to make a profit while protecting the interests of EVERYONE. It's not socialism, it's forcing greedy fucks to do the RIGHT thing.

[ClakarEQ]

/agree with Toss (well I don't think Lue is a nutcase but Mr Rogers there could be LOL)

I also don't care for Mr. Rogers calling anyone not wealthy a slave. I bet Mr. Rogers did pretty good financially. This isn't about freedoms this is about ethics, morals, and taking without giving back. Any nation that is based on taking without returning is doomed to fail.

yeah um, mr rogers is a religous nutbag for sure.

According to one author, the pastor once responded to a question about biblical references in support of slavery during biblical times by saying, "I feel slavery is a much maligned institution. If we had slavery today we would not have such a welfare problem."[5] On the other hand, Rogers supported the 2000 revision of the Baptist Faith and Message which states that, "the blessing of racial and ethnic diversity and acknowledged that all races possess full dignity by the creative intention of God." [6]

Dr. Rogers was an adamant supporter of the pro-life movement, had stated that the institution of capital punishment is spiritually ordained, and supported a boycott of Disney because of the company's supposed promotion of homosexuality.

[Lueyen]

I'm not well versed in Rogers various writings and sermons, but I felt the quote I made was spot on. This may very well be a case of a broken watch still being right twice per day.