NIKV69
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Obama And Capping CEOs Pay

Wed Feb 04, 2009 5:12 pm

I have to admit I agree with our savior on this one BUT I sure hope once the company pays back the money they fed has given them and can operate normally without bailout dollars Obama better lift the restrictions. I think this action was needed especially after hearing about Wells Fargo wanting to send their upper level employees on a 12 day Vegas jaunt which was totally out of line.
Hey that guy with the private jet can bail us out! Why? HE CAN AFFORD IT!
 
Klaus
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 5:31 pm



Quoting NIKV69 (Thread starter):
BUT I sure hope once the company pays back the money they fed has given them and can operate normally without bailout dollars Obama better lift the restrictions.

As I understood the proposal, the limitation would automatically cease to apply as soon as the company stopped needing the support.
 
cptkrell
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 5:41 pm

Well, in this case, a business that takes government money (actually OUR money) better heed to our rules. Although I don't think the government should be meddling in businesses anyway, it's already punctured the bag and these businesses must follow the (new) rules.

There could be several scenarios that may unravel. For a couple;

One, and it's not my idea - I recently heard it on a radio talk show - is that this salary cap might lead a lot of execs to say "Hey, we can't live with a salary cap. Let's figure out how to bail ourselves out without government help."

Another is that a salary cap might not lead new expertise to come in and fill exec roles that truly need fresh expertise in running a company.

And another, alas, is that the government "nationalization" of certain industries may not go away anytime soon, if ever. regards...jack
all best; jack
 
jcs17
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 5:41 pm

I agree that no one from Citibank should be getting a $20 million dollar paycheck (I don't think it's the governments job to enforce paychecks though), but $500k? You might as well tell the CEOs of these major bailout victims to start begging for food -- or, most likely, find another job (executive retention is key during crises). Senior managers in a company like Citi make $500k+, VP-level makes over $1 million per year. Banks aren't like airlines where Joe Unionworker screams if the CEO dares to make $100k more than he does. Again, the Citi CEO shouldn't be earning $20 million, but I think it's an extremely dangerous precedent that the government is telling boards what their top executives can earn -- bailout money or not.

[Edited 2009-02-04 09:44:47]
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pnqiad
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 5:52 pm



Quoting JCS17 (Reply 3):
I agree that no one from Citibank should be getting a $20 million dollar paycheck (I don't think it's the governments job to enforce paychecks though), but $500k? You might as well tell the CEOs of these major bailout victims to start begging for food -- or, most likely, find another job (executive retention is key during crises). Senior managers in a company like Citi make $500k+, VP-level makes over $1 million per year. Banks aren't like airlines where Joe Unionworker screams if the CEO dares to make $100k more than he does. Again, the Citi CEO shouldn't be earning $20 million, but I think it's an extremely dangerous precedent that the government is telling boards what their top executives can earn -- bailout money or not.

The Government is only telling the boards of companies that CHOSE to accept Federal money to remain afloat. With the amount of money that Fed. has pumped in - it could well have bought 100% of most of these and then some.

So these companies should be glad that all they have had to live with is a generous pay cap of half a million dollars and only until they pay back the money they got back to the Government.

The companies' executives essentially work for the Federal Govt. and I think Obama was generous not to cap them under $400K - the salary of the President (unlike what all other Federal employees - who may not earn more that the President). And considering how badly most of these Wall Street guys have run the companies - I think the Fed. could do no worse in running them if they had been nationalized.
 
Klaus
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 5:54 pm



Quoting JCS17 (Reply 3):
executive retention is key during crises

Why would it be worth millions to retain the exact same executives who had just run the company into the ground???
 
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LAXintl
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 5:58 pm

Talk about communism. Central planned economy.

OK Mr. CEO here is your rationed $500k.

There goes personal incentive to do better, or let market forces dictate pay in a competitive global enviroment.  banghead 
From the desert to the sea, to all of Southern California
 
Klaus
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 6:01 pm



Quoting LAXintl (Reply 6):
There goes personal incentive to do better, or let market forces dictate pay in a competitive global enviroment.

The management of the failing corporations which actually need the bailout have already proven that their competence is – um – limited.

They've earned their pay cut.
 
mt99
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 6:06 pm



Quoting LAXintl (Reply 6):

There goes personal incentive to do better, or let market forces dictate pay in a competitive global enviroment

err if "market forces" would have dictated their companies would have been broke and these executives would not have job
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MD11Engineer
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 6:10 pm



Quoting LAXintl (Reply 6):
Talk about communism. Central planned economy.

OK Mr. CEO here is your rationed $500k.

There goes personal incentive to do better, or let market forces dictate pay in a competitive global enviroment. banghead

Let's say that those companies, where the execs did their job properly don'rt need bailout money, so let them pay their execs the way they like to. And in those cases where they received government money, they'd better shut up, because they f*cked up on the job.

Jan
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N328KF
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 6:21 pm

Where this rubs me raw concerns firms that didn't want to take TARP money. I'm talking about J.P. Morgan and Wells Fargo here, though there are a few others. They didn't want to accept the money (and the attached strings), but Paulson told them a) Take the money or else b) if you don't take it, other banks will be less likely.

So now they're being hamstrung by rules attached to money they didn't want (or need) in the first place.
When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' -Theodore Roosevelt
 
Klaus
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 6:23 pm

I really get the feeling that some people are still in picnic mode while the storm is already ripping the trees from the ground around them...  eyebrow 
 
captaink
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 6:31 pm



Quoting LAXintl (Reply 6):
Talk about communism. Central planned economy.

OK Mr. CEO here is your rationed $500k.

They can make whatever they want to make. 1mil a year, 2mil, 50 mil, but they will have to make the company work themselves. The choice is up to them.

But if they are going to need money from the government, suffering tax payers money, they better do something worthwhile with it, apart from paying exhobitant amounts to the CEOs. 500K isn't bad by the way, they will survive, until things get better.

I don't see what the problem is. I mean think about the absurdity of using taxpayers money to pay CEOs salary, and yet the company still continues in the shambles. I mean everyone is in this mess together, and everyone has to get out together. So while Joe plumber may have to accept 2 -3Gs a month, the CEO accepts, 42Gs (what a hard life). Hopefully in a couple years we all can get back to life as we knew it.

P.S. I know for some the money is not so much the issue, more so it is the very idea of the government restricting the salary of someone, it sounds questionable, but we are in questionable times and after all it is the government's money.
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dxing
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 6:31 pm



Quoting Klaus (Reply 5):
Why would it be worth millions to retain the exact same executives who had just run the company into the ground???

Why would anyone consider going to work for a company where their pay would be capped? Mr. President has essentially doomed those companies that have taken bail out money, which originally did not come with those strings, to having to settle for 2nd string CEO's. I wonder how often the government will come back and decide they need to impose even more restrictions? It just goes to show what happens when non business men try to become instant CEO's.
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LAXintl
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 6:35 pm

Frankly, when things are bad, the government should be looking to further encouragement not throwing on a regressive pay cap.

The time is exactly now when these troubled firms need the best minds and talent they can get to work the hardest possible to right the ships so to speak. How are you going to attract new blood, ideas or hard work when you have a fixed pay regime?

Instead, the compensation spigots should be opened including encouraging heavy use of performance based incentives.
From the desert to the sea, to all of Southern California
 
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casinterest
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 6:47 pm



Quoting DXing (Reply 13):
Why would anyone consider going to work for a company where their pay would be capped? Mr. President has essentially doomed those companies that have taken bail out money, which originally did not come with those strings, to having to settle for 2nd string CEO's. I wonder how often the government will come back and decide they need to impose even more restrictions? It just goes to show what happens when non business men try to become instant CEO's.

They should be doomed. The Current CEO's didn't do any good keeping the companies safe and sane during the mad rush for profits.

If a company wants to do well on it's own, it shouldn't need to go to the government for funds. If they require assistance to survive, then they should be willing to accept the consequences.
Older than I just was ,and younger than I will soo be.
 
FlyPNS1
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 6:51 pm



Quoting LAXintl (Reply 14):
The time is exactly now when these troubled firms need the best minds and talent they can get to work the hardest possible to right the ships so to speak. How are you going to attract new blood, ideas or hard work when you have a fixed pay regime?

Money can't buy everything. The truly talented don't work just for the high pay. Simply throwing out big salary numbers won't guarantee that you attract the best and in some cases it can backfire and you simply attract the greediest....the banking industry has become exhibit A for this.

It's kind of funny that people get upset when gov't throws money at a problem, but they thinking just throwing money at people will solve a corporation's problems.
 
UAL747
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 6:57 pm

Those of you who are griping at the pay-cap, are you kidding me?

These companies, including the CEO's took YOUR money and MY money because they couldn't get their crap together and did bad business. You are screaming communism, but they are the ones who asked for Federal assistance.

If you are getting billions of the US people's money, which includes part of your paycheck, aren't you going to want them to use it to better their company, not better their daily choices of Maybach's to drive to work?

$500K is not a bad living, these people aren't going to suffer unless they have already spent their money they've already earned. They have plenty of back up and connections to support them.

The banks wanted help, and by god, they need to scale back. Robbing from the poor to give to the rich at this point in time is not what we need, Obama knows that, YOU know that, and it's YOUR money the CEOs and Banks are robbing!

UAL
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Yellowstone
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 7:08 pm



Quoting LAXintl (Reply 14):
Instead, the compensation spigots should be opened including encouraging heavy use of performance based incentives.

There is a very heavy performance based incentive here - if you want to make more than $500K a year, get your company off of federal support!

Quoting Klaus (Reply 5):
Why would it be worth millions to retain the exact same executives who had just run the company into the ground???

Precisely.
Hydrogen is an odorless, colorless gas which, given enough time, turns into people.
 
Klaus
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 7:11 pm



Quoting DXing (Reply 13):
Why would anyone consider going to work for a company where their pay would be capped?

If somebody is so far removed from reality that (s)he still doesn't realize that bad performance deserves a pay cut, they should know where the door is.

Quoting LAXintl (Reply 14):
The time is exactly now when these troubled firms need the best minds and talent they can get to work the hardest possible to right the ships so to speak.

Paraphrasing Jon Stewart: "You just ran your company into the ground – you don't have 'best people'!"
 
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Tugger
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 7:13 pm

Quoting LAXintl (Reply 6):
Talk about communism. Central planned economy.

OK Mr. CEO here is your rationed $500k.

There goes personal incentive to do better, or let market forces dictate pay in a competitive global enviroment. banghead

No, you are wrong, this is precisely the incentive needed to PREVENT the companies from sucking on the government teet for very long. There has to be some incentive to make them want to pay back what they owe quickly or like any good business, they will drag it out as long as they can for their benefit.

Quoting Klaus (Reply 7):
They've earned their pay cut.

   Actually many of them (not all) earned a pink slip and if it weren't for the government bailout they would not have the job they have right now.

Quoting N328KF (Reply 10):
Where this rubs me raw concerns firms that didn't want to take TARP money. I'm talking about J.P. Morgan and Wells Fargo here, though there are a few others. They didn't want to accept the money (and the attached strings), but Paulson told them a) Take the money or else b) if you don't take it, other banks will be less likely.

So now they're being hamstrung by rules attached to money they didn't want (or need) in the first place.

Agreed, but then this is excellent incentive for Well Fargo and JPMorgan to pay back the loans. They have already done their part and they have helped others that needed it accept it. If the business in fully solvent and it makes economic sense they will pay it back.

Quoting DXing (Reply 13):
Why would anyone consider going to work for a company where their pay would be capped? Mr. President has essentially doomed those companies that have taken bail out money, which originally did not come with those strings, to having to settle for 2nd string CEO's. I wonder how often the government will come back and decide they need to impose even more restrictions? It just goes to show what happens when non business men try to become instant CEO's.

I don't know, why do pilots work when they know that their pay is capped? Of course you are referring to the REDUCTION in pay that they now have to endure. And I seriously doubt that any of the top people will leave as they will be offered big bonuses to compensate them for when the companies exit their situation. In addition to the fact that the employment environment is already terrible in the financial sector and many people are out of work and looking.

Quoting LAXintl (Reply 14):
Frankly, when things are bad, the government should be looking to further encouragement not throwing on a regressive pay cap.

The time is exactly now when these troubled firms need the best minds and talent they can get to work the hardest possible to right the ships so to speak. How are you going to attract new blood, ideas or hard work when you have a fixed pay regime?

Instead, the compensation spigots should be opened including encouraging heavy use of performance based incentives.

And that is exactly what WILL happen. the pay will be deferred to when the company exits the dire straits they are in now. As I've said above, this is a good idea. Get them off and out of the public money trough and back into the private sector completely where they belong.

Tugg

(And it appears many others agree as several posted similar comments while I was typing. Apologies for appearing repetitious.)

[Edited 2009-02-04 11:27:24]
I don’t know that I am unafraid to be myself, but it is hard to be somebody else. -W. Shatner
 
RussianJet
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 7:19 pm



Quoting LAXintl (Reply 14):
Frankly, when things are bad, the government should be looking to further encouragement

Encouragement like giving them taxpayers' money to help dig themselves out of the mess they've got themselves into? Or maybe we should just be throwing money at failing companies with no serious strings attached? Come on, let's get real here. The president is doing the right thing, the moral thing, and the sensible thing - and it's about time someone did!

Quoting Yellowstone (Reply 18):
There is a very heavy performance based incentive here - if you want to make more than $500K a year, get your company off of federal support!

Exactly!  checkmark 
✈ Every strike of the hammer is a blow against the enemy. ✈
 
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LAXintl
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 8:06 pm



Quoting RussianJet (Reply 21):
Or maybe we should just be throwing money at failing companies with no serious strings attached?

To start with no, we should not be throwing money at the companies to begin with. Let the chips fall where they might.

If the government wants to provide commercial like loans, or purchase company stocks that is fine, however I oppose any 'bail out' of companies or the consumer.

Quoting FlyPNS1 (Reply 16):
The truly talented don't work just for the high pay.

But money is hell of an incentive.

Capping pay is the equivalent of deflating that incentive for many.

Quoting Tugger (Reply 20):
Actually many of them (not all) earned a pink slip and if it weren't for the government bailout they would not have the job they have right now.

I agree. If companies go bust let them. We live in a cruel world and don't need to coddle private enterprise.

Quoting UAL747 (Reply 17):
Robbing from the poor to give to the rich at this point in time is not what we need,

If anyone is being robbed its the tax payer now with this hair brained idea to subsidize or partially governmentalise the corporate world.

Government has no place in the board room. If you don't like the manner a company is run, let its true owners - us the shareholding public decide. Dont need Uncle Sam deciding on how or who to compensate.
From the desert to the sea, to all of Southern California
 
Charles79
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 8:14 pm

I really don't see what other alternative Obama had but to make this decision in light of the public outcry over bailout recipients laying off workers by the thousands while giving their top executives lavish bonuses.

Still, this whole thing doesn't sit right with me, not sure why.

This CEO pay cap decision is an example of the reason why I opposed the bailout in the first place, it left the door wide open for this type of scenario where the government has a say on what private companies do as long as they operate with government funds (even if only partially). Don't get me wrong, I understand that the government had to act fast as it was evident that several major banks were in the brink of collapse, but I still have the impression that our elected officials did not evaluate other alternatives thoroughly before settling for the bailout. We got shortchanged.

To make matters worse, Congress did not adequately set the restrictions needed to ensure that the funds were used for what was the original intention, and failed to incorporate adequate oversight. Now we are in a reaction mode (doesn't that sound familiar?) and trying to undo the damage.
 
pnqiad
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 8:16 pm



Quoting LAXintl (Reply 22):
Government has no place in the board room. If you don't like the manner a company is run, let its true owners - us the shareholding public decide. Dont need Uncle Sam deciding on how or who to compensate.

In that case - these companies shouldn't have been begging the government to bail them out - no? If I as a lender lent you loads of money - almost as much as your market cap - you bet I will ensure I get heard loud and clear about what I want you to do.....like it or not. The only reason these companies have to be thankful for is that GWB did not put any conditions in the first half of TARP funding - so they pretty much have had a free run till now.
 
PPVRA
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 8:38 pm

Quoting PNQIAD (Reply 4):
The Government is only telling the boards of companies that CHOSE to accept Federal money to remain afloat.

Problem is, there is evidence some banks were coerced into "accepting" the funds. I don't disagree with what you said but unfortunately your background info may not be 100% correct.

http://www.nytimes.com/2008/10/15/bu...y/15bailout.html?pagewanted=1&_r=2

[Edited 2009-02-04 12:42:19]
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
windy95
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 8:53 pm



Quoting Klaus (Reply 5):
Why would it be worth millions to retain the exact same executives who had just run the company into the ground???



Quoting Yellowstone (Reply 18):
There is a very heavy performance based incentive here - if you want to make more than $500K a year, get your company off of federal support!



Quoting Klaus (Reply 19):
If somebody is so far removed from reality that (s)he still doesn't realize that bad performance deserves a pay cut, they should know where the door is.



Quoting RussianJet (Reply 21):
The president is doing the right thing, the moral thing, and the sensible thing - and it's about time someone did!

I cannot believe that I am agreeing with the left on this. Let me check my pulse.

You want incentives then get your company back on solid ground. Golden parachutes need to go. Bonuses for top 5 when you are losing money needs to go.

Quoting DXing (Reply 13):
Mr. President has essentially doomed those companies that have taken bail out money, which originally did not come with those strings, to having to settle for 2nd string CEO's.

Seems to me that the second string was already in charge. What kind of payoff would come to a new aggressive CEO that turned the ship around.

Quoting DXing (Reply 13):
I wonder how often the government will come back and decide they need to impose even more restrictions? I

That is where the water gets dirty. The GOV should not be able to change the rules once the money is taken and the deal is done.
 
pnqiad
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 9:00 pm

Everybody hyperventilating that the Government is changing the rules of the game after the fact can relax....according to this news - this will only apply going forward:

http://www.msnbc.msn.com/id/29003620/

Quote:

The pay cap would apply to institutions that negotiate agreements with the Treasury Department for “exceptional assistance” in the future. The restriction would not apply to such firms as American International Group Inc., Bank of America Corp., and Citigroup Inc., that already have received such help.

 
PPVRA
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 9:03 pm



Quoting PNQIAD (Reply 27):

That's good. Hopefully no more coercion, though.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
Klaus
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 9:11 pm

According to CNN these corporations would even be allowed to offer share options with just the restriction that these options couldn't be exercised before the company got out of government protection again.

That is quite a liberal stance under the circumstances, I would say.
 
WunalaYann
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 9:37 pm



Quoting LAXintl (Reply 14):
How are you going to attract new blood, ideas or hard work when you have a fixed pay regime?

The problem is that they are not attracting "new blood". It is the same management teams getting handsomely rewarded for a decade of greed, incompetence and irresponsibility. "New blood", if they are as intelligent as you say they are, would not touch the banking industry with a barge pole in today's environment, insane compensation or not.

Quoting Windy95 (Reply 26):
I cannot believe that I am agreeing with the left on this. Let me check my pulse.

1) Define "left". US or non-US "left"?
2) Who said one could not have different on different topic and stray from the party line from time to time?
3) Why the need to label and put people in boxes, e.g. "the left", "the conservatives", "socialists", "capitalists", etc.?

Quoting LAXintl (Reply 22):
I agree. If companies go bust let them. We live in a cruel world and don't need to coddle private enterprise.

The world is as cruel as we make it.
 
corocks
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 9:49 pm

I think if this had just come out of nowhere I probably would have had an issue with it. However, after the constant reports of execs taking advantage of it on stupid crap like the jack-hole at Merrill did and spent 1.2 million to decorate his office then I am fine with it. Things like that show that these CEO's are out of touch with reality.

Quoting DXing (Reply 13):
to having to settle for 2nd string CEO's

Better than the 8th string CEO's that ran these companies into the ground.

Since when did bonuses become automatic parts of pay for CEO's instead of actual incentives for doing good work. All executive level bonuses should be performance based. I know mine are, and here is a news flash, most profitable companies are not handing out bonuses and pay raises to people right now. What did these CEO's of failing companies do to deserve them?
 
NIKV69
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 9:56 pm



Quoting LAXintl (Reply 6):
Talk about communism. Central planned economy.

OK Mr. CEO here is your rationed $500k.

There goes personal incentive to do better, or let market forces dictate pay in a competitive global enviroment.

Normally I would agree in fact I still think Obama for businesses being controlled but the ones that came begging for money have to play ball. If they are going to get bailed out they have to change things and be transparent and cap salaries and such until they can operate on their own.

Quoting DXing (Reply 13):
Why would anyone consider going to work for a company where their pay would be capped? Mr. President has essentially doomed those companies that have taken bail out money, which originally did not come with those strings, to having to settle for 2nd string CEO's. I wonder how often the government will come back and decide they need to impose even more restrictions? It just goes to show what happens when non business men try to become instant CEO's.

Normally I would agree but many of these banks took the first bailout and just banked it and didn't do what they would say they would. Then some started throwing some parties and planned a trip to Vegas? U kidding me? I cut back my fun this winter and stopped spending the amount of money I would have if times were better these companies better sure as hell do the same. As long as Obama lifts these restrictions once the companies pay back the money I could care less.
Hey that guy with the private jet can bail us out! Why? HE CAN AFFORD IT!
 
FlyPNS1
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 10:13 pm



Quoting Windy95 (Reply 26):
What kind of payoff would come to a new aggressive CEO that turned the ship around.

There could be a huge payout for said CEO. As soon as they turned the company around and paid back the loan, they could have a HUGE bonus or whatever.
 
glydrflyr
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RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 10:26 pm



Quoting Captaink (Reply 12):
after all it is the government's money.

Please remember this at all times: The Government has no money, it takes it from working people only.

The position of the current administration seems top be that since we gave you, Mr. Banker, a lot of money,we can now dictate how much your can earn, and if you can operate your corporate aircraft fleet.

As I see it, the position the Feds have adopted in this matter is untenable and hypocritical in view of the fact they heavily subsidize other industries and don't try to cap salaries in these industries.

If, as it appears, the Administration feels that they have the right to cap salaries because they doled out money, then we, the taxpayers, have the inalienable right to cap Federal salaries and limit or deny the privilege of using aircraft we own and are operated by the federal government. What I propose is this:

President = $ 100,000
Senators = $ 75,000
Congress = $ 48,000

Use of ANY government vehicle by any of the office holders named above only on approval by the people of the US, in a national vote.

PS: Bear in mind that this crisis was precipitated by actions of the US government, dating back to Jimmy Carter and the Community Redevelopment Act. The "greedy" banks did not get themselves into this debacle without aggressive prodding by the feds, nor can we borrow and spend our way out the current recession as the feds claim.. If that were the case, there would be no poor families in the US, since we would all just borrow and spend leaving our children, grandchildren and great grandchildren to pay the piper, which is exactly what the administration advocates now.


All governments, local, county, state and federal must cut spending and cut taxes in order to extricate ourselves from this mess.
if ya gotta crash, hit something soft and cheap!
 
Flighty
Posts: 7881
Joined: Thu Apr 05, 2007 3:07 am

RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 10:30 pm



Quoting Klaus (Reply 7):
They've earned their pay cut.

I agree.

Quoting LAXintl (Reply 14):
Instead, the compensation spigots should be opened including encouraging heavy use of performance based incentives.

That will just lead to more disasters and more corruption. Performance based incentives have led to much of this excess risk-taking. The incentives were designed badly.

Besides, executives do not have a "right" to lavish pay and ownership stakes. I believe their pay governance has been anti-shareholder and deeply corrupt for a long time.

A job IS a performance based incentive. A good performing CEO should be rewarded with continued employment. Otherwise clean out their desks!!
 
WunalaYann
Posts: 2128
Joined: Mon Mar 07, 2005 12:55 am

RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 10:44 pm



Quoting Flighty (Reply 35):
Besides, executives do not have a "right" to lavish pay and ownership stakes. I believe their pay governance has been anti-shareholder and deeply corrupt for a long time.

Good point, in my opinion. And we go back to PPVRA's core issue of the agency relationship - the dilemma between short-term, shareholder-oriented management, and long-term, growth/development, management-oriented strategy.
 
Klaus
Posts: 20649
Joined: Wed Jul 11, 2001 7:41 am

RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 10:59 pm



Quoting Glydrflyr (Reply 34):
As I see it, the position the Feds have adopted in this matter is untenable and hypocritical in view of the fact they heavily subsidize other industries and don't try to cap salaries in these industries.

As far as I understand, the idea of the Obama administration is that industries which have to take government protection will be subject to this limitation (as far as legally possible).

What's hypocritical about that?

Quoting Glydrflyr (Reply 34):
All governments, local, county, state and federal must cut spending and cut taxes in order to extricate ourselves from this mess.

That is unfortunately a recipe for disaster.

The problem in the past decades was that funds were siphoned off to finance an unproductive joyride for a few at the top while both the infrastructure and the middle class were increasingly choked.

Apart from making a few people fantastically rich, this policy of tax breaks, effectively lowering wages and cutting social and material infrastructure had devastating effects for the entire system. It rewarded greed instead of responsibility, antisocial behaviour instead of actual performance.

It was the attempt to make the wet dreams of a few on the right reality, and contrary to their expectations, it led to a crash, not a sustainable boom.

The necessary consequence cannot be to lower taxes even more (from which again the wealthiest people benefit the most) while choking the crumbling infrastructure and the already strangled middle class even more – that would only accelerate the vicious circle again.

The consequence must be to re-start an emphasis on substance, on accountability, on functioning infrastructure, on effective education for everybody, on rewarding actual performance, not just the imaginary one of a few crooks at the top of the ladder but the one of actually responsible executives and actually effective workers.

In (thankfully!!!) watered-down form we've had a similar development over here as well, so we'll have to make our own adjustments; But we generally haven't swapped most of our industrial base and our infrastructure for a ficticious bubble market like the USA and Britain largely have.

Of course I can be wrong, but from where I stand the most urgent priority is to get the real economy going again, and that means a massive investment in real resources instead of the ficticious "investments" in the now-crashed bogus financial "products".

When your infrastructure crumbles, you need to fix it. A crumbled infrastructure can't be ignored – at least not if you want to play anywhere near the top of the league.

And infrastructure means not just bridges, roads, the electric grid, water pipes and the like, it also means education, healthcare and related infrastructure which allows middle-class people (and "even" poorer people) to concentrate on their work to do good jobs with actual results, not just ficticious ones raking in bonuses for showing up and swindling other people out of their real earnings or savings.
 
jcs17
Posts: 7376
Joined: Mon Jun 18, 2001 11:13 am

RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 11:41 pm

And predictably, here we go... Barney Frank is suggests that the compensation caps should be extended to all businesses, whether they receive federal funds or not.

http://www.financialweek.com/apps/pb...D=/20090203/REG/902039977/1003/TOC

Quote:
Congress will consider legislation to extend some of the curbs on executive pay that now apply only to those banks receiving federal assistance, House Financial Services Committee Chairman Barney Frank said.

“There’s deeply rooted anger on the part of the average American,” the Massachusetts Democrat said at a Washington news conference today.

He said the compensation restrictions would apply to all financial institutions and might be extended to include all U.S. companies.

The provision will be part of a broader package that would likely give the Federal Reserve the authority to monitor systemic risk in the economy and to shut down financial institutions that face too much exposure, Mr. Frank said.

Also included in the legislation: registration requirements for hedge funds and proposals aimed at curbing conflicts of interest at credit-rating agencies such as Standard & Poor’s.

But, hey, don't worry, these executive compensation limits are only being put on companies that recieved TARP funds.

Socialism at work, folks. I think perhaps an Obama victory, plus good Democrat majorities in Congress are revealing what the Dem Leadership is on the inside... Socialist red.
America's chickens are coming home to rooooost!
 
RussianJet
Posts: 5983
Joined: Sat Jul 21, 2007 4:15 am

RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 11:43 pm



Quoting JCS17 (Reply 38):
Socialism at work, folks. I think perhaps an Obama victory, plus good Democrat majorities in Congress are revealing what the Dem Leadership is on the inside... Socialist red.

And let's thank God for it. It's about time.
✈ Every strike of the hammer is a blow against the enemy. ✈
 
jcs17
Posts: 7376
Joined: Mon Jun 18, 2001 11:13 am

RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 11:45 pm



Quoting RussianJet (Reply 39):

And let's thank God for it. It's about time.

Name for me one country where socialism has actually worked.
America's chickens are coming home to rooooost!
 
RussianJet
Posts: 5983
Joined: Sat Jul 21, 2007 4:15 am

RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 11:53 pm



Quoting JCS17 (Reply 40):
Name for me one country where socialism has actually worked.

Name me one country where true, uncorrupted, unmanipulated socialism has ever been truly given a chance to flourish.
✈ Every strike of the hammer is a blow against the enemy. ✈
 
Klaus
Posts: 20649
Joined: Wed Jul 11, 2001 7:41 am

RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 11:53 pm



Quoting JCS17 (Reply 40):
Name for me one country where socialism has actually worked.

Actually, continental Europe has largely adopted a social democratic model with a substantial social system coupled with a market economy and a solid democracy. All things considered, this middle-of-the-road model now looks better than ever.

The outer extreme of a free market economy has been tried in the anglo-american finanical markets, and it has been a total disaster which is now dragging everybody down.

Authoritarian communism had been tried as well, and its failure has preceded the current failure by a few years.

So sorry, but neither extreme has worked. Not a big surprise, really.
 
RussianJet
Posts: 5983
Joined: Sat Jul 21, 2007 4:15 am

RE: Obama And Capping CEOs Pay

Wed Feb 04, 2009 11:58 pm



Quoting Klaus (Reply 42):
Authoritarian communism had been tried as well, and its failure has preceded the current failure by a few years

Indeed, and unfortunately has also meant that anti-communists and anti-socialists dismiss it as 'proof' that neither communism nor socialism have any merit.
✈ Every strike of the hammer is a blow against the enemy. ✈
 
Klaus
Posts: 20649
Joined: Wed Jul 11, 2001 7:41 am

RE: Obama And Capping CEOs Pay

Thu Feb 05, 2009 12:04 am



Quoting RussianJet (Reply 43):
Indeed, and unfortunately has also meant that anti-communists and anti-socialists dismiss it as 'proof' that neither communism nor socialism have any merit.

Well, all large-scale historical experiments in that directions have been pretty dismal failures, so I can't blame people for making a connection there, even if in principle you're right.

But since the extreme opposite has just failed to a similar (if not worse) extent, I think it's time to get realistic and to be more discerning about one's ideas about how to build a society.

The expectance of pure altruism is just as naive as the primary reliance on greed.

Human beings are more complex than that, and our societies should reflect that.
 
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Aaron747
Posts: 8560
Joined: Thu Aug 07, 2003 2:07 am

RE: Obama And Capping CEOs Pay

Thu Feb 05, 2009 12:17 am



Quoting JCS17 (Reply 3):
Again, the Citi CEO shouldn't be earning $20 million, but I think it's an extremely dangerous precedent that the government is telling boards what their top executives can earn -- bailout money or not.

It's not a good precedent but it's what most American people want after giving loans to banks that failed.

Quoting LAXintl (Reply 6):
There goes personal incentive to do better, or let market forces dictate pay in a competitive global enviroment.

Take it up with the last administration then, for getting this cockamamie bailout ball rolling.

Quoting LAXintl (Reply 22):
But money is hell of an incentive.

Not for people who are born into it or already have it. I'm from a family with one parent who has had seven figure net worth since I was in elementary school. Money has never been my incentive - fulfillment and making my own way have. For a lot of people I know from similar backgrounds, the same is true unless they are exceptionally indifferent or lazy. One could argue the only incentive for some of these folks, provided their families are in the eight or nine figure net worth categories, is maintaining a certain lifestyle, but even that doesn't hold true for everyone.

Quoting Charles79 (Reply 23):

This CEO pay cap decision is an example of the reason why I opposed the bailout in the first place, it left the door wide open for this type of scenario where the government has a say on what private companies do as long as they operate with government funds (even if only partially).

Couldn't have said it better.

Quoting JCS17 (Reply 38):
And predictably, here we go... Barney Frank is suggests that the compensation caps should be extended to all businesses, whether they receive federal funds or not.

Let's not get worked up about it, OK? Nobody is going to support that kind of nonsense. Any such bill will be DOA.

Quoting RussianJet (Reply 41):
Name me one country where true, uncorrupted, unmanipulated socialism has ever been truly given a chance to flourish.

What you're asking for simply doesn't exist under normal human conditions and societal pressures. A free market with an elected government to oversee its activities is infinitely better. We only have this situation in the US because we have continually elected people to office who are too close to people in business positions of power to do their jobs properly.
If you need someone to blame / throw a rock in the air / you'll hit someone guilty
 
Mir
Posts: 19108
Joined: Mon Jan 05, 2004 3:55 am

RE: Obama And Capping CEOs Pay

Thu Feb 05, 2009 1:00 am



Quoting NIKV69 (Thread starter):
BUT I sure hope once the company pays back the money they fed has given them and can operate normally without bailout dollars Obama better lift the restrictions

 checkmark  If a company isn't getting bailout money, they should be able to pay what they see fit.

Quoting LAXintl (Reply 14):
Instead, the compensation spigots should be opened including encouraging heavy use of performance based incentives.

Let them take stock instead of cash. Then they have a really good incentive to perform well. Healthy companies are not the ones looking for government handouts. The ones that are sucking on the federal teat are the ones that, through poor management, ran themselves into the ground. I see no reason why my tax dollars should go toward rewarding the executives responsible for that.

And, of course, there is the additional incentive that if you want to get paid a lot, then get your company off of federal life support.

-Mir
7 billion, one nation, imagination...it's a beautiful day
 
WunalaYann
Posts: 2128
Joined: Mon Mar 07, 2005 12:55 am

RE: Obama And Capping CEOs Pay

Thu Feb 05, 2009 1:13 am



Quoting Klaus (Reply 42):
The outer extreme of a free market economy has been tried in the anglo-american finanical markets, and it has been a total disaster which is now dragging everybody down.

Actually, this is not correct. Free market economy assumes that the five requirements of pure and perfect competition are in place and effective. This simply is physically, humanly impossible - the notion that every single participant in the market would have access to the exact same information at the exact same time as everyone else is just outworldly.  Smile

What we have had is a mixed economy, with varying degrees of government intervention depending on time, location, etc.

Quoting Klaus (Reply 42):
Actually, continental Europe has largely adopted a social democratic model with a substantial social system coupled with a market economy and a solid democracy. All things considered, this middle-of-the-road model now looks better than ever.

I totally agree. This centrist has been pushing for a "tool kit" approach to social, economic and environmental issues for a long time, borrowing policies across the wide spectrum of theories, ideologies and politics. And I am quite happy with the "happy middle" struck by most Western European nations.

What we need to bear in mind, I believe, is the difference in political spectrum on either side of the Atlantic. Quite often Democratic US administrations would be in line with centre-right European parties or coalitions. The whole "socialist/communist" name-calling from a few US members on these boards quite often irks me, simply because it is politically and theoretically baseless, but it is also a reminder that we have different political compasses.

What is considered "socialist" (in a pejorative sense for a lot of people here) in the US, is often commonly accepted practice in Western Europe - universal healthcare, heavily subsidised and extensive public transport systems, higher tax levels, etc.
 
Charles79
Posts: 1117
Joined: Sat Mar 03, 2007 12:35 pm

RE: Obama And Capping CEOs Pay

Thu Feb 05, 2009 1:25 am



Quoting Mir (Reply 46):
If a company isn't getting bailout money, they should be able to pay what they see fit.

Absolutely. That was my argument on another thread about the Wall St bailouts that Obama criticized...if you didn't touch the federal funds then you are free to pay your top execs any salary or bonuses that you see fit. Same goes if your company pays back the funds. You'll be held accountable to your shareholders, of course, but that's about it. As long as the company is being run within the boundaries of the regulatory commissions and any federal/local laws the government shouldn't have any say on how they conduct their business.

Quoting Klaus (Reply 44):
But since the extreme opposite has just failed to a similar (if not worse) extent, I think it's time to get realistic and to be more discerning about one's ideas about how to build a society.

Klaus, you make a pretty good point (as you often do). I think what really gets people up in arms is when they start to use labels. Some folks will never accept socialist ideals as viable alternatives, and some have very valid reservations about capitalism. Why don't just take what works and what makes sense from both of them and merge them into something useful? Actually, that has been tried...it's called the United States of America. Yes, our system is not a pure capitalist one, and yes, we do have a lot of socialist ideals impregnated within our framework. Most European countries do as well to some extent, as do countries in South America, Asia, Oceania...and we have proven that it works. As grim as the situation looks like right now the standard of living of folks in the US and the EU is as high as it has ever been, people are living longer, science knows more than ever, heck even old barriers based on gender and skin color are disappearing. Sometimes it's good to stand back and take a look at what we have, not what we want to have...
 
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CALTECH
Posts: 2825
Joined: Thu May 17, 2007 4:21 am

RE: Obama And Capping CEOs Pay

Thu Feb 05, 2009 1:37 am



Quoting Windy95 (Reply 26):
I cannot believe that I am agreeing with the left on this. Let me check my pulse.

Before you go insane and agree with the left, let me defibrulate you just a little about the left. These democrats in the US government, they are brain-washing you into believing that CEOs are out of control with their pay and compensation, maybe so, but so are those in the US government, especially the lefties. The democrats screamed that the republicans were the corrupt ones. Well,...

The Congress and Senate, they give themselves pretty much automatic pay raises. In these times, that is 'rewarding themselves' for failure. For they have failed the American Nation and its' people. They go on vacation more than then most know, ' Under both Democratic and Republican leadership, the work schedule has gradually decreased: In the '60s and '70s, Congress met on average 162 days a year; in the '80s and '90s, 139 days. This year the House is expected to meet 71 days.' http://abcnews.go.com/Politics/Story?id=1955256&page=1

Members of Congress and the Senate usually leave those chambers as multi-millionaires. Wonder how they became millionaires. Maybe they have high paying CEO jobs as their second job with all that time off they get. Or when they leave, they get high paying jobs from CEOs, like the job former democrat senator Daschle received from a CEO, for one example. CEOs, Congress and the Senate are so intertwined, they probably go for drinks after the cameras and reporters go away.
http://www.newser.com/story/49767/da...gar-daddy-for-white-house-job.html

Or maybe they just become rich by not paying their taxes, like former democrat senator Daschle did for another example. Or for a yet another example, just be like Mr. Geithner who failed to pay taxes for years, our glorius brand new Treasury Secretary, who is either a liar or a mentally challenged individual, not one anyone would really want as Treasury Secretary in these times. Maybe we should all stop paying taxes, if its' okay for them, well. And our brand new 'Change' Treasury Secretary, didn't pay all of his back taxes either. 'Mr. Geithner or his accountant used the IRS's statute of limitations to avoid further back-tax payments at the time of the audit.'
http://online.wsj.com/article/SB123187503629378119.html

Or not pay taxes on rental property like democrat Charles Rangel. $75,000 dollars of income and no mortgage interest for 10 years.
http://www.judicialwatch.org/weeklyu...senator-rangel-fails-pay-his-taxes

Or maybe just take illegal bribes on your way to a million, like former democrat congressman Jefferson, with his refrigerator money. And to think, republican House Leaders were trying to protect this guy. Maybe these examples of money moving are congressman and senators bonuses for a job well done of record deficits as far as the eye could see. Not much difference between these monies and CEO bonuses and pay.

Or be like democrats Barney Frank whose significant other, was a top Fannie-Mae executive, and Chris Dodd, who received sweetheart mortgages from Country Wide. Or democrat Charles Schumer, who words and actions started a financial meltdown of a bank in California, and was a beginning of the financial crisis.

The republicans were not much better, growing the deficit year after year, but those 450 billion dollar deficits look nice compared to these trillion dollar deficits that are here. Funny how a projected 450 billion dollar deficit was a disaster for the country and the people, but a trillion dollar is somehow needed. Better to let things go bankrupt and shake out, rather than throwing money into bottomless pits.

They want CEOs to stop taking vacations, but the democrat-led congress and senate will sure use their recesses and summer vacations this year for sure. No cutbacks in government, except for the proposed 10% cut in the Pentagon budget, that seems fiscally irresponsible in these times. Why isn't Pelosi and Reid proposing cap limits and cutbacks in their salaries, they failed us these past couple of years. Why should any of us pay taxes anymore ? If it was citizens like us, there would be penalties and possibly jail time. When the people who pass the laws ignore them, what is the point of following the law anymore.

Sure makes foot tapping in restroom stalls at airports seem like the good old times.
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