Discussion

Rush had an interesting point on this. If they cap executive pay, the executives will be less to beg for bailout monies. Less business on the governemnt dole = a good thing!

I think that imposing a cap on executive compensation is to distract the public and make us think that Obama is working to protect the bailout money.

Surely teh best thing to do woudl be to deny bonuses full stop.
Why reward failure?
Some of the so called fat cats have invented schemes to line their pockets,I am thinking of derivative traders etc here
Tom

On the one hand I like the idea of there being guidelines for bailout money so that it actually does some good for the economy since we are in the situation now. On the other hand I very much don't like the idea of the government telling you how to use your money and getting their hands in places it shouldn't. Putting a cap on executives pay will only be the beginning I think.

I generally would think this a terrible thing for the country, but I also think, serves these people right. Look if you practice political entreprenuership this is what your going to get. Sort like selling your soul to the devil, it may appear great and wonderful at first but then he comes and claims his toll.

Of course thats my initial reaction when somebody askes me my opinion. When I really think about it though, I feel that there obviously something that I cant see.

Obama, and all government(yes including Bush, dont want some over sensitive Lib. getting upset), get and stay rich off of these companies that have this sort of business practice.

My overall thought would be if I were explaining this to my children would be, this is classic socialism, and socialism is a very bad way of life. It has always been proven to have detrimental(hope i spelled that right!) effects on any group of people that it has touched, including the first American settelers.

I watched a TV program just the other day on Stalin and Russia. Man, need I say more!? It truly amazes me that anyone can honestly say that they support socialism, and I think that this is what is beginning, with DC leading the charge, and lining thier pockets.

No. There should not have to be a cap on executive pay. The United States Government was not created in order to determine what we can and cannot make! It was created in order that we may have liberty and freedom. Those who say that there should be because these executives should be punished are falling prey to the Obama teams strategy of diverting you off the true problem! The execs should have been ALLOWED TO FAIL! If you want to punish an executive for doing a bad job, you don't just dock or cap his pay, YOU FIRE HIM OR LET HIM FAIL! This safety cap is just a political ploy, and frankly the governments way of getting more of their dirty little fingers into our lives. Conspiracy of the rich? Yes. If not just that, then its at the very least a conspiracy of the politician in order to keep their power.

Absolutely yes... but let me explain. First off... our government has no business what so ever in conducting this bailout in the first place. The "bailout" is the governmental crime and overstep here... not the caps. Secondly... the officers in charge of these failed institutions should be fired... any other company leader or business owner would be out on his/her head if they failed to this extent. However... IF the government gives bailout money and IF those in charge of this failure are not fired... then YES to the caps. What an insult to intelligence and logic for these Execs to otherwise receive multi-million dollar salaries/bonuses taken from bailout money. Yes it stinks... but you KNOW that they will not behave themselves with this money otherwise. The caps MAY be the only reason they would decline the bailout money in the first place.

The executive's pay might get capped, but I'm sure they'll go on extra conferences in Hawaii, get extra bonuses, etc. There's no way to stop executives from milking the earnings of a company. These are very educated people who can think of a million ways to be compensated through means other than pay.

Don't forget, the executives don't own the companies they run. The investors are the ones who took the hit for management's incompetence.

The rich executives probably did not blink with an earnings cap because there are other compensation methods to use to work around the cap. It is a gesture to appease us simple folk by a man whom we want to believe in. We are members of the greatest country in the world.

Robert - My answer is a conflicted one. I do not agree with capping executive compensation. That should be left up to the Shareholders by way of the Board of Directors.

I did not agree with the bailout in the first place. Regardless of whether it is called a loan or not, it is still a handout. A handout of our tax dollars to a free market entity. Which leads us down the road to Socialism. To be plain and clear, the financial institutions should have collapsed. The vacuum created would have been filled with more fiscally responsible institutions and our free market would have been stronger for it. The government helped create the mess and allowing them to head up the process of recovery is like putting an alcoholic in charge of a liquor store - a recipe for disaster because they have already shown their inability to manage the situation in the first place.

To answer your question, a straight across the board cap is not the way to handle executive compensation. Give them an average salary based on the national average of the lowest 5000 corporations that have executive positions. 100 corporations form each state. Add the salaries together and compute the average. For the sake of argument, let's say that number is $25,000 per year. Allow the executives a salary of $25,000 per year, but give them a compensation bonus depending upon profits. If and only if the company profits, does the executive receive compensation. If an executive can pull an entity that is 1 billion in the hole to a 2 billion dollar surplus, that person deserves millions in compensation. However, if that person does not, then they receive their average wage. A confident and competent executive would have no problem with that as long as they were granted an adequate period of time to complete the task (ie: not terminated the month before profits are estimated to be achieved).