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Obama Orders $500,000 Limit on Executive Pay

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posted on Feb, 4 2009 @ 12:50 PM
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Obama Orders $500,000 Limit on Executive Pay


www.dailypaul.com

President Barack Obama will announce tomorrow that he’s imposing a cap of $500,000 on the compensation of top executives at companies that receive federal rescue funds, an administration official said.

The unprecedented steps -- which also include restrictions on corporate jets, office renovations and holiday parties -- come amid an outcry over an $18.4 billion bonus payout in 2008 to executives. The protests have been building since October when Congress passed a $700 billion financial-rescue
(visit the link for the full news article)


Related News Links:
www.bloomberg.com
www.bloomberg.com




posted on Feb, 4 2009 @ 12:50 PM
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It's fitting. If they are going to receive bailout money, they ought to restrict it further than that, imo. Because the fact is, decisions at the executive level caused their own demise. $100, 000 would be more like it, considering the alternative of complete failure.


Any additional compensation will be in restricted stock that won’t vest until taxpayers have been paid back, said the official, who requested anonymity.


Also a good move.

But what I want to see is some kind of legislation that limits company relocation of jobs and outsourcing of labor internationally. Bring the jobs back home, or get out.



www.dailypaul.com
(visit the link for the full news article)



posted on Feb, 4 2009 @ 12:53 PM
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Started a thread on this earlier this morning....

Thread



posted on Feb, 4 2009 @ 12:55 PM
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I would like to see executive pay fixed at a multiple of the median income of its workers. Say three times the median salary.

That would give them a disincentive to cost cut by slashing employee compensation down to rates that are worthless as a living wage.

Because believe it or not, the wealth of a nation is the spending power of its people, not just that of the elite.



posted on Feb, 4 2009 @ 12:59 PM
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apologies to True American,

thread is open, post away

[edit on 4-2-2009 by Crakeur]



posted on Feb, 4 2009 @ 01:15 PM
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Thanks Crakeur.

I really did search for this on ats and nothing came up with the exact title... The rephrasing of title content is probably the biggest culprit of failed searches. Happens to me a lot. It's not the search engine's fault. The thread was reopened due to the two thread rule which allows for one thread in BAN as well as another in one other forum (for anyone wondering why). Also wanted to point out that I will not post a thread, even with the two forum rule, if I find it anywhere else on ATS. But sometimes this happens.

On topic:

reply to post by Illusionsaregrander
 


That sounds like a great idea all the way around. But it appears this order only concerns those affected by the bailout, does it not? Maybe what we really need to be looking at is for a limited time applying similar legislation to all companies until the US is out of this mess and the economy recovers. The disparity between rich and poor and the demise of the middle class is killing us. Extreme measures such as this are needed.

[edit on Wed Feb 4th 2009 by TrueAmerican]



posted on Feb, 4 2009 @ 01:36 PM
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Originally posted by TrueAmerican
But what I want to see is some kind of legislation that limits company relocation of jobs and outsourcing of labor internationally. Bring the jobs back home...


YES! Now THERE would be a championship move towards the lower and middle class. How much my CEO gets paid effects me...not at all. Two other moves that would take me out of a world of hurt is reducing mortgage/home costs and student loans (over $50,000 at present). Beyond that, I can handle.

[edit on 4-2-2009 by saint4God]



posted on Feb, 4 2009 @ 01:49 PM
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You are incorrect. What your CEO gets paid DOES affect you greatly.

Especially in a "performance based" pay system. Why? Because cutting costs and increasing profit is what they are calling performance.

And you, as an employee of that company, are a cost. Hence cutting your salary (and benefits) has a direct impact on your CEO's salary.

If you didnt have CEO's all over America cutting the compensation of their workers to make their own checks fatter, you wouldnt need to hope for a bailout to pay off your personal debts. You would have an income that was sufficient to do that.

Edit to add;

And the reason jobs get sent overseas into developing nations is because of this same "performance based pay" scheme. There are absolute limits as to how far they can cut "costs" in America. We have minimum wages. And, even if we didnt, there would come a point (such as in unregulated industries like agriculture who are exempt from minimum wage rates) when the pay offered for a job was too low to make the job worth taking for an American as they would not be able to cover their own living expenses working there. So these jobs are either farmed out to countries with no regulation of pay rates and lower costs of living. Or, as we see here, jobs that cant be sent overseas by the very nature of them, import cheaper labor. Illegal immigrants.

Fixing the "problem" of performance based pay would begin to solve all these issues naturally, without having to create a million new agencies for oversight and costing tax payers more.

[edit on 4-2-2009 by Illusionsaregrander]



posted on Feb, 4 2009 @ 01:52 PM
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I think Obama's decision is extremely fitting. Why should companies who get a government hand out of the peoples money no less, make more that 500K a year? It's not like they blew through the millions gained in the last 8 with George's pro big business administration.

He's attempting to make these companies suffer a little bit for having mis-managed they're companies for this long, and not preparing for a 21st century economy.

They should feel the burn of their leadership on a personnal and financial level.



posted on Feb, 4 2009 @ 01:59 PM
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I think these crooked executives should be forced to live on the same amount of pay that they would get from unemployemnt benefits, since technically without being bailed out they would all be out of work right now.



See how these crooks can survive on $1600 mo USD....poor little guys wouldnt even be able to afford manicures or fuel for their private jets.


They should take it in shame and be thankful they still have any job at all.



posted on Feb, 4 2009 @ 02:07 PM
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Great post, star and flag.

Some very interesting points I read,


Obama said that massive severance packages for executives who leave failing firms are also going to be eliminated. "We're taking the air out of golden parachutes," he said.
Other new requirements on "exceptional assistance" will include:
_The expansion to 20, from five, the number of executives who would face reduced bonuses and incentives if they are found to have knowingly provided inaccurate information related to company financial statements or performance measurements.
_An increase in the ban on golden parachutes from a firm's top five senior executives to its top 10. The next 25 would be prohibited from golden parachutes that exceed one year's compensation.

Yahoo News

No more 500 million dollar retirement packages!!!!

This needs to be used much more often:
"The next 25 would be prohibited from golden parachutes that exceed one year's compensation"



posted on Feb, 4 2009 @ 02:09 PM
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Originally posted by Illusionsaregrander
If you didnt have CEO's all over America cutting the pay of their workers to make their own checks fatter, you wouldnt need to hope for a bailout to pay off your personal debts. You would have an income that was sufficient to do that.


I digress, if this is the case then surely there wouldn't be any objections for me if my pay increases...but we'll see right? Everyone in my company will now be getting a raise?



posted on Feb, 4 2009 @ 02:13 PM
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No, you wont. Because they did NOT tie executive pay to the median pay of the employees of that company.

They set a salary cap, which is a different thing altogether, and should in fact drive your wages DOWN.

Because they dont get to go back to business as usual until they pay off the loan they are getting in the bailout.

And that is going to necessitate further cutting of "costs" to come up with that money, and as I explained above, you are a cost.



posted on Feb, 4 2009 @ 02:20 PM
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Yep, I figured...so back to square one, this affect me and my co-workers not at all.



posted on Feb, 4 2009 @ 02:40 PM
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Outstanding!!! Finally something in politics that actually makes sense. Although I don't think that it will be that simple. I am sure somebody will "cry" that it is unconstitutional or find a loop hole somewhere. Obviously these people are very good at being deceitful.



posted on Feb, 4 2009 @ 02:51 PM
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Originally posted by Illusionsaregrander
I would like to see executive pay fixed at a multiple of the median income of its workers. Say three times the median salary.

That would give them a disincentive to cost cut by slashing employee compensation down to rates that are worthless as a living wage.

Because believe it or not, the wealth of a nation is the spending power of its people, not just that of the elite.
I believe the spending power of the ever shrinking middle class is more important than the elite. The middle class are the ones that buy the Fords and Chevy's of the world. The middle class also wants to spend money on those pesky big screen televisions. The middle class are the ones that throw a Big game party, to the tune of millions across the nation.

True, we as a nation, and indeed the world, need the elite, but I believe they need us more than we need them. The elite spend their time thinking of ways to make more money, the middle class spends time thinking of things to spend money on, then spending it.

When they/we had the money, that is.



posted on Feb, 4 2009 @ 04:49 PM
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reply to post by saint4God
 



You didnt "figure" at all. If you "figured" you wouldnt have said CEO pay has no affect on you.

It has a profound effect on you. And anyone who works. You just dont care to take the time to run through all the ramifications of different pay strategies because that would take time.

Its far easier to just spout off an opinion based on nothing more than hot air.

[edit on 4-2-2009 by Illusionsaregrander]



posted on Feb, 4 2009 @ 04:56 PM
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Originally posted by saturnsrings


True, we as a nation, and indeed the world, need the elite, but I believe they need us more than we need them.



I personally am not sure how much we "need" the elite. I think that is part of the story they need to sell to us. There would be competent people willing to do the exact same jobs they do for far less money. And, I am certain that there are much more competent people willing to do their jobs for far less money.

But I agree with you completely on the rest of the sentence. They do need us more than we need them. They have ever since the very first person decided they were "elite." Because without us, they are just another person with delusions of grandeur. Its only because we believe that they are "better than us" that they have the status they do.



[edit on 4-2-2009 by Illusionsaregrander]



posted on Feb, 4 2009 @ 05:42 PM
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Yeah and here's the result we get from the greedy (^%%( 's on Wall Street:

rawstory.com...


Dismay on Wall Street over Obama pay cap

Wall Street and the business community gave a lukewarm response Wednesday to the US administration's plan to cap executive pay, fearing it may lead to a talent exodus and delay recovery in the finance sector.

The reaction came after President Barack Obama announced that executives of finance firms taking government bailouts would have their annual salaries limited to 500,000 dollars, a move aimed at protecting taxpayer interests.

The salary limit is "still a hefty sum to be sure, and the spirit of the order certainly has popular appeal, but it's a slippery slope when the government puts restrictions on how much an individual can earn in the private sector," said Patrick O'Hare of the independent research firm Briefing.com.

"Also, the order itself strikes us as a disincentive for financial firms to reach out for aid, which will just prolong the recovery for the sector and the economy."

Douglas McIntyre at the financial website 24/7 Wall Street said the limits could make it more difficult for troubled banks to retain their best executives.


Retain their best executives??????? WHAT? The same executives that got us into this mess in the first place?

You just keep on pushing the right buttons Wall Street.



posted on Feb, 5 2009 @ 12:37 AM
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I'm sure they will be able to figure out a way around it. When it comes to hiding earnings corporate America is always one step ahead of the government, the banking sector in particular. It will be a minor inconvenience for them at best.



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