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Key Obama Officials Reveal Executive Pay Limits

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posted on Feb, 4 2009 @ 06:49 AM
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Executives of companies receiving federal bailout money will have their pay capped at $500,000 under a financial compensation plan that President Barack Obama is expected to announce Wednesday, two senior administration officials said.

Under the president'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, according to administration officials.




Now, this is an idea that I can go along with.

If a company is receiving TARP funds or bailout money (otherwise known as our tax dollars), they shouldn't be able to use it to pay their executives outrageous bonuses.




posted on Feb, 4 2009 @ 07:40 AM
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Another story on this....

Source




Compensation experts in the private sector have warned that such an intrusion into the internal decisions of financial institutions could discourage participation in the rescue program and slow down the financial sector's recovery. They also argue that it could set a precedent for government regulation that undermined performance-based pay.

"I really don't want the government to take over these businesses and start telling them everything about what they can do," Sen. Mitch McConnell of Kentucky, the Republican leader, said this week. "Then you truly have nationalized the business."





posted on Feb, 4 2009 @ 07:45 AM
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I'm not sure what I think about this ...

On one hand - the gov't has a right to decide who should be eligible for bailout money. If you don't play by the rules, then you shouldn't get the $$$. Corporations that waste $$ on outrageous salaries don't need bail out money.

On the other hand - that's reaching into captialism, which is how this country is supposed to be run, and it is strangling and interfering with it.

I think I'm leaning more towards the fact that if someone wants a bail out then they need to show that they aren't overspending $$$ on salaries for idiots who just get the company in trouble to begin with. BUT BUT BUT ... this could be a slippery slope. I'm nervous about it. I can see the massive potential for abuse with this on the part of the government.

Immediate edit.


[edit on 2/4/2009 by FlyersFan]



posted on Feb, 4 2009 @ 07:51 AM
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reply to post by FlyersFan
 


I feel that if they are sooooo bad off that they need bailout funds, then they are soooo bad off that their executives don't need to use that money to get tens of millions in bonuses every year.

The bailout money should go to helping the company get back on its feet, not making sure that the executives got the same bonuses they got before the company fell on hard times.



posted on Feb, 4 2009 @ 07:55 AM
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Executives of companies receiving federal bailout money will have their pay capped at $500,000

Now, this is an idea that I can go along with.

Are you sick or what??
500k?
How about NOTHING and put in JAIL!
Oh the poorpers, they can just rott yeh?
Sick in the head people........



posted on Feb, 4 2009 @ 08:05 AM
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dependancy=servitude....
and it's coming at us on a personal level, why shouldn't be coming at us within the business world.
it's one of the many gateways to hell that is opening up. there's plenty of examples of other gateways on these boards...
most of the smoking/non-smoking discussions are stemming from the fact that we are overly dependant on one another when it comes to healthcare...if I am paying for you healthcare, I should have some say in how you treat your body!!
then there's the lets force all women to be on birth control till they can prove that they are able both mentallly and financially to pay for their babies...
and it just goes on and on, and will continue to do so as long as the cost of living so badly exceeds the earning ablility of the people.
well, it's finally reached up into the business sector and now, they are finding themselves dependent on the government also...
oh, well.....I say go for it, cap the salaries of all those businesses that are sucking in the tax money, not just those who are being bailed out now. the colleges and universities, the healthcare systems, all these companies that are paying most of their employees wages that don't even come close to providing the basic necessities of life!

maybe then, it will sink into our heads why preserving our independence is a bigger priority than having a nice stock portfolio, or a bigger house, or a new car, or a workfree life!



posted on Feb, 4 2009 @ 08:07 AM
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I agree with this move. I don't want to pay these guys' salaries at all but there's an old saying. Beggars can't be choosers. These people ASKED the government to bail them out. It's not like they have successful businesses and the government came along and said, "You're making too much money. We're limiting your salary."

We're doing them a favor and they have shown that they're totally incompetent.

Frankly, I agree with BorgHoffen that they should be in jail or at least without governmental help. Let them fail. But seeing as how they DID get TARP funds, we have every right to set limits that anyone in this country should be able to live on. Half a million dollars a year might mean they have to give up their place in the Hamptons or forego that private jet, but they can survive if they put their minds to it.


I only hope this is a limit on total compensation and they don't sneak through $5 Million bonuses. Does anyone know if this applies to bonuses?



posted on Feb, 4 2009 @ 09:05 AM
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reply to post by Benevolent Heretic
 


Both stories say that bonuses and/or pay over and above the $500,000.00 will have to be done with stock that can't be sold until the companies pay back the money they borrowed from the government.



posted on Feb, 4 2009 @ 09:22 AM
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reply to post by skeptic1
 


Actually, they don't say that, specifically, that I could see. And that's what concerns me. These articles talk about "pay", which, to me, means salary.

Only when they talk about "total compensation" can we be sure they're including bonuses, as Claire McCaskill proposed here:



"I do know this: We can't just say, 'Please, please,'" said Sen. Claire McCaskill, D-Mo., who has proposed that no employee of an institution that receives money under the $700 billion federal bailout can receive more than $400,000 in total compensation until it pays the money back.


This worries me, too:



The administration official, speaking on the condition of anonymity because the plan had not yet been made public, said the most restrictive limits would apply only to struggling large firms that receive "exceptional assistance" in the future. Healthy banks that receive government infusions of capital would have more leeway.

Banks and other financial institutions that receive capital infusions, but are considered healthy, could waive the $500,000 salary cap and the stock restrictions under the new Obama rules.


If they were "healthy banks", they wouldn't have needed government infusions. EVERYONE who received TARP funds should be capped. They have proven that they can't handle it themselves and would have failed without the government.

Source

I'm wondering if this is just for show...
I'll have to see the details.

[edit on 4-2-2009 by Benevolent Heretic]



posted on Feb, 4 2009 @ 09:29 AM
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reply to post by Benevolent Heretic
 


You are right. A lot of corporations, though, do view annual bonuses as "pay". But, like you, I'll err on the side of caution and say that more details are needed where bonuses are concerned.

Another question....I would think that any company/institution which received/receives TARP money or bailout money would not be considered "healthy". So, I wonder just what the government's definition of "healthy" is.....especially if it involves receiving federal funds.


[edit on 2/4/2009 by skeptic1]



posted on Feb, 4 2009 @ 09:40 AM
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I'm not so sure that all those "healthy banks" could come through this. the banks routinely borrow from each other to tide them over if there's more demand for cash than they are accoustomed to. and, well, with the economy as it is, I wouldn't be surprised if there wasn't a few people making sure that the deposits at these banks were at least less than what the fdic insures. so, many have seen big withdrawals...

and, it got so bad, that none of the banks would lend to each other, so, well......
who knows...there's probably a few who were running strong companies till this hit.



posted on Feb, 4 2009 @ 10:21 AM
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Obama just announced it. He said several times "compensation", not pay or salary, so it would appear that it does include bonuses. Thankfully. At least this is a step in the right direction.



posted on Feb, 4 2009 @ 10:23 AM
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reply to post by Benevolent Heretic
 


Good.

I don't think that the government should stick their noses in the business world and say how companies should run themselves and pay their employees and executives.

But, if these places are receiving bailout funds, TARP funds, or government funding, then I honestly have no problem with the government stepping in and saying that it can't be "business as usual" any longer.



posted on Feb, 4 2009 @ 11:09 AM
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Originally posted by skeptic1
I don't think that the government should stick their noses in the business world and say how companies should run themselves and pay their employees and executives.


You know, I used to feel that way. But that has resulted in trickle-up economics and redistributed the wealth to the CEOs and other top-level executives of corporations, and ultimately failing corporations... while leaving the workers to get by on wages at the low end of the gap or to be layed off. The "compensation gap" between the workers and executives has continued to grow to an extreme, distributing the wealth to the point of an unhealthy economy.

I wouldn't support caps on regular businesses salaries, but I would support a maximum percentage of gap between the lowest- and highest-paid employees. If the company is doing well the wealth should be spread to all people who are contributing. Just my opinion.



posted on Feb, 4 2009 @ 11:16 AM
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This little notion of Obama's looks great on paper and makes for great news. However, I don't buy it for one minute. I'm sure there are plenty of loopholes and a lack of enforcement and accountability measures in place to make this stick. I hate it when politicians pander to the masses.

These execs and their companies own DC and they will get full compensation one way or another because I highly doubt that the majority of the hand outs will ever be paid back in full.



posted on Feb, 4 2009 @ 11:18 AM
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More Smoke and Mirrors....

Where's the meat? Where's the Stimulus package? What happened to that thing?

This capping CEO salaries is cute for PR but we see right through it. It's a PR Stunt during a time when cheap gimmicks isn't going to be enough to save us.

Start laying down plans with substance and save the flashy tricks for the Movies.



posted on Feb, 4 2009 @ 11:27 AM
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What powers can Obama use to override the terms of the Bailout bill?

I would think that the terms of the bailout bill is what the companies have to comply with.

Anybody have any idea how he is going to do this when the bailout bill doesn't stipulate a cap?

[edit on 4-2-2009 by jam321]



posted on Feb, 4 2009 @ 11:29 AM
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reply to post by jam321
 


Did it have any stipulations or terms at all??

Wasn't every thing left up to the discretion of the Treasury Secretary and/or the Fed Chairman??



posted on Feb, 4 2009 @ 11:41 AM
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I am also leery of this. I want the greedy B_ _tards to get what they deserve, however, who's next?? I am scared this type of move sets precedence for capping our salaries eventually.



posted on Feb, 4 2009 @ 12:03 PM
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Wow some people are so quick to jump on the whole 'its a bunch of bologna' band wagon. How about we wait for all the details before coming to a conclusion about 'loopholes' etc. being apart of this, you know, instead of embracing ignorance.




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