Obama’s Executive Compensation Cap: A Good Start
Obama’s Executive Compensation Cap: A Good Start
Today, President Barack Obama announced that he is “imposing a cap of $500,000 on the compensation of top executives at companies that receive significant federal assistance in the future”:
Any additional compensation will be in restricted stock that won’t vest until taxpayers have been paid back, according to an administration official.
At Naked Capitalism, Yves Smith wrote that there are many “shortcomings of the supposedly tough plan,” noting that there is “no attempt to take measures relative to the funds committed” and the restrictions are limited to the 50 highest-paid members in each institution. These are fair criticisms, but it’s always easiest to say that measures like these could go further. Instead, Obama’s move could be looked at as simply the first step in a wider effort to reel in Wall St. excess.
Also, enforceability has to be considered. The restrictions need to be realistic enough that they are enforceable, and designed so that the government doesn’t spend an inordinate amount of time and resources on the enforcement effort. As Mary Kane wrote at the Washington Independent, “I’m not sure the the corporate world really understands what’s about to hit it. This will be just the beginning of a major overhaul of the financial system.” Indeed, the pay cap is a good down-payment on that transformation.
7 Responses to “Obama’s Executive Compensation Cap: A Good Start”
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This policy is just cover for not doing the right thing. Those banks are insolvent and should be nationalized. If they get more bailouts, it will cost the public trillions and depress the economy for years.
February 4th, 2009 at 3:24 pmWe don’t need to control their pay – we need to eliminate their jobs!
While it should go without saying that even a legitimate President’s “ordered” $500,000 pay cap is an unenforceable intrusion into the private sector, as if that weren’t enough, Obama LACKS EVEN OSTENSIBLE AUTHORITY to issue the order UNTIL HE OVERCOMES “RES IPSA LOQUITUR” BY SUPPLYING HIS LONG FORM BIRTH CERTIFICATE AND PROVING HIS ELIGIBILITY TO BE PRESIDENT UNDER ARTICLE 2 OF THE US CONSTITUTION.
February 4th, 2009 at 5:47 pmRon I take you to be a Socialist right? The Government must not nationalize any bank or Corporation. It’s not what the Constitution gives them power to do. Now if you and your kind get to suspend the Constitution or even eliminate it then I would say to you to go ahead and Nationalize anything you want. Dodge the bullets from the people who Love this country and would fight you in another civil war to keep this nation free from Communists and Socialists. I’m ready to get it on if you succede. The Constitution guarantees a “Republican form of goverment”, not a Liberal,Socialist or even a Communist form of Government. How do I know it says this? I can read.
February 4th, 2009 at 5:51 pmProfessorj:
February 4th, 2009 at 6:11 pmHave you heard of IndyMac or AIG?
Why do we need a cap? Can’t we please instead have a 57% top bracket like Sweden? And a 0% bottom bracket like Sweden? And only two brackets like Sweden, please?
February 4th, 2009 at 6:39 pmTo ron and jps.
Nationalizing the banking industry is a Socialist move and it is not what this country was based on. If a company fails then it fails. I don’t agree with the bail out bill for the banks. There are no provisions in the Constitution for any such action to be made by the Governemnt. I would agree with putting Barney Frank and Chris Dodd in jail for causing the Housing Bubble that finally collapsed and got us in this mess though.
jps. You are a Socialist aren’t you? Be honest. You want this country to become another Sweden right? You should go read up on what problems Sweden and the other Socialist countries in Europe are experiencing. Better than that spend some time living there. If you like it then you can stay. I didn’t like it at all but I did have the oportunity to experience it first hand. Speak from knowledge not from Liberal talking points.
Think for yourself for Gods sake. OOOPS I used the word God didn’t I? Shame on me.
February 5th, 2009 at 10:53 amron Says:
Professorj:
Have you heard of IndyMac or AIG?
It has nothing to do with anything. How about ENRON and WORLDCOM? If a company can’t survive in the free market then they go bankrupt. That’s what this country has been based on since it’s inception. No bailouts, no Mortgage relief, no setting pay scales on private business and no Government interference in business. Maybe this is a good thing in Russia or Sweden or those other Socialist countries like Argentina but not for the US.
The Government has shown that it can’t successfully run a business time and time again. Fannie Mae, Freddie Mac, US postal service, Social Security, should I go on? If it isn’t in the Constitution then it doesn’t exist. That may be hard for you Liberal Socialists to understand but the Constitution is the basis for this society. Not the Book of Mao or the Communist manifesto.
February 5th, 2009 at 12:00 pm