Salary Cap Limits for executives of companies receiving bailout money
February 5th, 2009
Yesterday President Obama announced a plan to impose a $500,000 maximum salary cap for executives or CEOs of companies taking US bailout money.
Many people, especially those on Wall Street cried foul because it reeks of socialism, or at least non-capitalistic behavior.
Of course on the other hand, the Government wouldn’t have had to do this if the idiots hadn’t given themselves multi-million dollar bonuses despite posting multi-billion dollar losses (or going bankrupt or otherwise). These overpaid executives unfortunately are the face of current modern politicians: mega-wealthy predominantly white males that get away with everything.
The folly of these executives is a clear case why the GOP should “re-brand” itself.
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Although Wall Street execs have to share part of the blame for some of this anti-capitalistic measure from the White House, my take is that we’re shooting ourselves in the foot with unintended consequences. For example:
* With such a salary cap, these bailout banks are doomed to fail. What sane/good exec would take such a job? As a taxpayer I’d rather see these banks turn around with the hiring of exceptional execs at market rates. As a shareholder indirectly through the government, I want these banks to succeed.
* Tax revenues are going to further decrease especially for New York and NYC. Instead of collecting taxes on a $5M salary, now it’s $0.5M. New York is already suffering from lack of funds. This isn’t going to help.
* What’s wrong with buying corporate jets and having conferences in Vegas? That’s job creation. The jets don’t fly on their own — pilots, attendants, maintenance crews, fuel stations, etc. are required. And having corporate events in Vegas keeps the hotel rooms booked, keeps the hotel staff busy, keeps the caterers working, and sells show tickets.
Sometimes the best thing is not to do anything.