So, do you think it is a good or a bad idea to limit the salerys of CEO’s in the banking business?
Written By: admin on May 22, 2009
35 Comments
How about CEO's of American auto makers too. What do you reckon? In case you haven't heard, Obama is plotting to limit the salary's of the banking industry.
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Tags: american auto, auto makers, banking industry, ceo, fixed rate private student loan consolidation, home equity loan lowest rate, salary
Hey guys, I'm going to have to disagree with most of you. Here's why:
First, I am not for the bailout, but people need to know that that the goverment did not simply "give away" tax payers' money to the banks. Rather, the treasury puchased terrible assetts from the banks and now have a stake in these firms. Eventually these buys should earn returns. So reckon of it like an investment. Whether you are for the bailout or not, you should note the difference. Also vital is the fact that many of these banks didn't even want the bailout money to start with and some (ie- Goldman Sachs) want to give it back now that they are subject to the possible salary limitions.
Second, these bonuses are not simply gravy on the table, they ARE the employees' compesation for the year. (That said, most of the banks still reduced their bonus payouts by 50% or more in 2008.) The fastest way to make these banks fail is to take away their top talent, and that's exactly what will happen if these income caps become a reality. Top talent will leave and go to private firms where their work is rewarded rather than punished. I'm not saying that there aren't some top execs on Wall st who do NOT deserve what they have earned, but to make a 500K cap that limits ALL employees' compensation is extremely arbitrary and will absolutely have unintended consequences. If this thing passes, these banks WILL go down. Just wait…
On a separate note, and regarding unintended consequences, it's clear that much of the outrage has to do with the fact that some people are still earning top dollars during this economic crisis while others suffer. Honest enough. But know that most people who make a lot of money also GIVE AWAY a lot of money. By cutting income the fed and states will LOSE tax dollars (thus increasing goverment deficits which then hurt—ah ha!– the same people upset about the Wall St bonus.) Also, charities, which rely heavily on Wall st top earners for donations, will also be severely affected.
You come to me, crying out for a loan, because you're in a desperate spot.
If I'm loaning you $100, most of the time I'm not going to care how you spend it.
If I'm loaning you $1,000, I'm going to be concerned if you're thinking about spending it all on a drinking binge at the local bar.
If I'm loaning you $1,000,000, I will be going with you to the bank, watching you spend the money, and if you try to waste it on some trip to Bora Bora, I will knock you out.
The taxpayers are loaning this money to the companies–it is not for the CEO's to throw some weekend kegger with hookers and all that. The government is loaning the money, so it has **every right** to say how its spent.
You don't want policies controlling wages?
THEN DON'T QUESTION ME TO PAY THE WAGES FOR YOU!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
The CEO's are lucky to have jobs. They ought to be FIRED.
excellent thought, if they refuse, let their company go under
Long over due…..you can't start to imagine the waste that goes on.
If you're getting bailed out by the government, slap a limit on it.
They should be thankful they still have a job. If you'd lost $800 billion in the span of a few years, would you really expect to have a job?
fantastic thought…enough is enough….the greed and economic injustice has got to stop…….
Brilliant thought!
This only applies to CEOs of companies that want tax payer bailout funds.
Its called CONSEQUENCES for poor management.
If they take public money to bail themselves out I reckon it is a wonderful Thought.
Not CEO's in the banking business, the ones who are using tax payer dollars. Huge difference. They should have all been fired.
Terrible thought!!! When you punish the rich people, they will just go to other countries where they wont be punished for succeeding in life and not slacking off.
Only those receiving govt. asistance…if the automakers receive help and use it for ridiculous salaries, they should be limited too
If they are feeding at the "public trough" then it's reasonable that the taxpayers have some say in how the business is run. If they are NOT receiving bailout money then there's no reason for the government to step in on an issue that is primarily up to the shareholders.
ONLY WHEN IT COMES DOWN TO USING OUR TAX MONEY.
THEN THEY SHOULD BE HELD ACCOUNTABLE
Not only limit them but take everything away from them that could help in making their banks liquid again…. you know, like a bankruptcy…
Why isn't Obama taking back the $600 MIL. his friends/advisers/donors earned crashing Citigroup & Fannie Mae?
- Rubin
- Jim Johnson
- Jamie Gorelick
- Franklin Raines
Obama isn't serious. He's just doing a PR stunt
Excellent thought.
Somebody should have limited how much they could make YEARS ago.
Is it honest to lay off hundreds of hard working people when the salary of ONE CEO could place many of them back to work? No.
And if that CEO refuses to work for less pay, well, I'm sure there are a TON of Americans who will work for the capped pay.
Fantastic thought.
Normally, I am all for the concept of if I loan someone money for whatever reason, they are free to do with it as they see fit.
But if I give money for a specific reason and it doesn't go towards that specific reason, you can better bet it won't happen again.
It is excellent "IF" it is done by the company and not the Government!
So that's the "huge answer."
That is amusing.
Of all the serious problems to address, that's the huge fix.
That is really amusing.
I reckon I'll go and cap myself.
I reckon he should limit the CEO salaries for any entity that requires tax-payer dollars to stay afloat. That includes the US government. Barack needs to take a pay cut.
No, terrible thought.
This means that the other companies who did not take loans can hire better people, giving failed businesses more failure.
Welcome to assimilation into the ObamaNation
Excellent Thought.
500K is low. But salary caps should be place in place. A excellent rule might be, that for any publicly traded company, no employee can earn more than 50 times the average salary of all workers in the company.
Why is it that before 1990, CEOs and executives could successfully run large corporations without the ridiculous contracts, signing bonuses, stock options, perks, golden parachutes, and bonuses that they get today. Why does the CEO of Home Depot get a $230 million severance package, even though he drove down the stock price, fired the knowledgeable employees, and hurt the company.
Nobody deserves the 10's or 100's of millions of dollars in annual compensation that some of these executives pull in, regardless of performance… unless you are the sole owner of the private company. What happened since 1990 to drive executive compensation to these insane godly levels.
Let's get rid of Pelosi's private jet while we're ad it. The taxpayers don't need to fund this perk.
Terrible, very terrible…that is Socialism
Obama place a cap on the pay of his senior officials. If banks or car makers are going to take our tax money, there should be limits on how they spend it.
In the case of corporate financial companies receiving tax payer money I do support it. And I believe the CEO's of the automakers all volunteered to take a $1 salary as a publicity stunt to get a bailout in December.
Part of the problem is the revolving door of the financial industry. These execs are paid huge bonuses on an annual basis for maximizing profits that year(even if it's at the cost of longterm stability). So they take huge risks, get huge small term payouts, and huge bonuses, then leave and join other firms and do the same thing over again, even though the process undermines the long term health of those companies.
If you're asking for tax payer money to stay afloat, then you really can't argue against oversight. For people who say, "they won't keep the best and the brightest", well they didn't do too well with the "best and brightest", now did they?
I reckon its none of government's business and I defy anyone to find a place in the Constitution that gives Obamessiah the right to do this!
You bet I reckon it's a excellent thought! And, not only do I reckon they are lucky to have a job… but I reckon that the people that got those ridiculous bail outs before Bush left office should adhere to President Obama's cap as well and GIVE BACK anything over that cap.
Yes.
Excellent thought.
And waste too.
Nancy Pelosi flies across the country by herself in a jet.
She has 6 opportunities daily to go commercial.
Stop waste.
We need to save wherever we can.
If this fails. Capitalism fails.
Something hideous will replace it.
If they take government money taxpayers are shareholders in the company, and shareholders have a say in how much CEO's get paid. It is not as if they have been doing a excellent job a earned the money.The thought that they must pay huge salaries to retain employees is absurd, considering how may jobs are being lost in the financial industry where would they go.
Now is US prez to start deciding people's salaries – well what else is dictatorship?
This issue of corporate salaries has been raised by Warren Buffet several times but why is there not a systemic response to how corporates are run.
limiting salaries seems more like a populist gimmick that will do small to alter the problems with the corporate world.
Considering that they get their investment funds from the public, either directly or indirectly, though our investments, or as part of a stimuli package, and they are losing value for the money we give them, I reckon we should have a say in what they are paid.
Their argument will be that they have to offer high salaries to interest the best people should fall on deaf ears. If the best they could find led us to the disaster that is our current economy, let my wife do it.
She balances our checkbook quite nicely.
It is vital to limit the salaries of executive management who's companies are receiving bailout money from American taxpayers.
But why are we giving money to companies who have a proven losing business model. Shouldn't there be heavier requirements for those companies receiving bailout money to change their ways so they can make money.
I reckon that this is a question we shouldn't even be pondering because government shouldn't have gotten involved in the first place. This is just the first step of many that Obama is taking in an effort at turning America into a full blown socialist nation.
Normally I would say terrible. But since we the taxpayers now own the banks I reckon they should be fired! Same with the auto makers! If they can't run their companies they shouldn't be getting paid at all.
I reckon that's skirting the issue. It's terrible enough they get large hunks of change for actual salaries, but, moreover, they get those lovely golden umbrellas, especially if they can contrive to embezzle goodly chunks of money from the business and then get huge bonuses for having folded another major business.
Personally, I reckon they should, if and when found out, lose to the recovery of the failed business every shred of their ill-gotten gains, plus every attachable asset, spend major time in a REAL prison, and, when released, should never be able to work at any job which makes more than minimum wage and one, moreover, which does not offer any health care or retirement benefits. They need to LIVE and thereby apprehend fully the life and future to which they are condemning the victims upon whom they prey.