Obama sets maximum wage.

[lynks66]

http://news.yahoo.com/s/ap/20090204/ap_on_go_pr_wh/bailout_executive_pay

 

Good idea or not?

[ladiesbballcoach]

I have no problem with it being tied to bailout money.

[cch5432]

As noted, the people to get us out of this mess needs to be people who know how to run a business efficiently. If we are capping the pay, the best executives will go elsewhere.

[Getslow]

I don't like the plan one bit. When a major corporation is in distress of going under, it needs to put some of the best and brightest financial and entrepreneurial minds it can find at the table to save it. That isn't possible if your corporation can no longer offer a competetive wage and benefit package. This doesn't help solve the financial crisis, it's a vindictive step against the easy scapegoat in this mess.

 

*CCH, I think we typed that at the same time.

[ladiesbballcoach]

As noted, the people to get us out of this mess needs to be people who know how to run a business efficiently. If we are capping the pay, the best executives will go elsewhere.

 

I don't like the plan one bit. When a major corporation is in distress of going under, it needs to put some of the best and brightest financial and entrepreneurial minds it can find at the table to save it. That isn't possible if your corporation can no longer offer a competetive wage and benefit package. This doesn't help solve the financial crisis, it's a vindictive step against the easy scapegoat in this mess.

 

*CCH, I think we typed that at the same time.

 

Who said they couldn't do that?

 

They can reject the easy money from the government and try their luck in the free market with the best and brightest.

 

That is a good option for them.

 

But if they want the taxpayers to come in and bail them out of their mistakes than it comes with a price FOR A PERIOD OF TIME.

[Run To State]

As noted, the people to get us out of this mess needs to be people who know how to run a business efficiently. If we are capping the pay, the best executives will go elsewhere.

Bingo, you hit that nail on the head. Very stupid of Obama.

[Getslow]

Who said they couldn't do that?

 

They can reject the easy money from the government and try their luck in the free market with the best and brightest.

 

That is a good option for them.

 

But if they want the taxpayers to come in and bail them out of their mistakes than it comes with a price FOR A PERIOD OF TIME.

 

But isn't that cyclical? If they decline the government handout, they risk going under or, at the very least, getting bought out. If they take the money, then salaries are capped and they are stuck with the same subpar leadership that got them there in the first place. I would think it would be in the government's interest to ensure that these companies are enabled with the tools they need to use taxpayer dollars effectively.

[woodsrider]

As noted, the people to get us out of this mess needs to be people who know how to run a business efficiently. If we are capping the pay, the best executives will go elsewhere.

 

I don't like the plan one bit. When a major corporation is in distress of going under, it needs to put some of the best and brightest financial and entrepreneurial minds it can find at the table to save it. That isn't possible if your corporation can no longer offer a competetive wage and benefit package. This doesn't help solve the financial crisis, it's a vindictive step against the easy scapegoat in this mess.

 

*CCH, I think we typed that at the same time.

There won't be any where for them to go.

[ladiesbballcoach]

But isn't that cyclical? If they decline the government handout, they risk going under or, at the very least, getting bought out. If they take the money, then salaries are capped and they are stuck with the same subpar leadership that got them there in the first place. I would think it would be in the government's interest to ensure that these companies are enabled with the tools they need to use taxpayer dollars effectively.

 

Well, isn't that what the free market system is about?

 

You want the socialistic form when they fail and their bills but the capitalistic system for the executives pay?

[cch5432]

Well, isn't that what the free market system is about?

 

You want the socialistic form when they fail and their bills but the capitalistic system for the executives pay?

What we have is a failure to communicate.

 

I (and I assume Getslow) as well are assuming that the executives already in place have shown to be inept at their jobs. In order for these companies to recover, these companies are going to need new leadership. But you can't attract the best leadership unless you offer the best packages.

 

LBBC, I didn't support the bailout (OK, well I didn't, then I did but now I don't like the way it is looking). I think these executives should be without their jobs (because their companies should have gone under). But regardless of what I want, the government already did this. Now we have to make the best of it. And policies that keep good businessmen out of the job isn't the best thing for the economy.

[ladiesbballcoach]

What we have is a failure to communicate.

 

I (and I assume Getslow) as well are assuming that the executives already in place have shown to be inept at their jobs. In order for these companies to recover, these companies are going to need new leadership. But you can't attract the best leadership unless you offer the best packages.

 

LBBC, I didn't support the bailout (OK, well I didn't, then I did but now I don't like the way it is looking). I think these executives should be without their jobs (because their companies should have gone under). But regardless of what I want, the government already did this. Now we have to make the best of it. And policies that keep good businessmen out of the job isn't the best thing for the economy.

 

I would assume that this limits are not forever.

 

I think they are appropriate for a time period. And if the new leadership is successful, than they can be appropriately compensated at that time.

 

But when the company wants taxpayer money to help out the company, than it is fitting that the salaries are not just going to the top levels.

[Getslow]

Well, isn't that what the free market system is about?

 

You want the socialistic form when they fail and their bills but the capitalistic system for the executives pay?

 

No, I don't want this form of bailout at all. But when the government is giving out money, why hamstring the companies with restrictions that seem to assure continued failure instead of recovery?

[ladiesbballcoach]

AH! It seems that we might not have had all the story. You can pay over the $500,000 level but are limited on how you can do it and when the stock can be cashed in. It seems when the taxpayers have been paid back, than the limits on the compensation ceases. That could even be a performance based bonus. You could tell your exec $5 mill (or some amount) when we pay back the taxpayers.

 

http://townhall.com/news/politics-elections/2009/02/04/obama_caps_executive_pay_tied_to_bailout_money

 

Firms that want to pay executives above the $500,000 threshold would have to use stock that could not be sold or liquidated until they pay back the government funds.

 

The pay cap would apply to institutions that negotiate agreements with the Treasury Department for "exceptional assistance" in the future.

 

Generally healthy institutions would have more leeway. They also face the $500,000 limit if they're getting government help, but the cap can be waived with full public disclosure and a nonbinding shareholder vote.

 

[woodsrider]

What we have is a failure to communicate.

 

I (and I assume Getslow) as well are assuming that the executives already in place have shown to be inept at their jobs. In order for these companies to recover, these companies are going to need new leadership. But you can't attract the best leadership unless you offer the best packages.

 

LBBC, I didn't support the bailout (OK, well I didn't, then I did but now I don't like the way it is looking). I think these executives should be without their jobs (because their companies should have gone under). But regardless of what I want, the government already did this. Now we have to make the best of it. And policies that keep good businessmen out of the job isn't the best thing for the economy.

I did misunderstand what you were saying and now totally agree with you.

[Trinity alum]

Have any of you folks ever had a business loan? They are called loan covenants and a loan covenant that restricts how much money can be taken out of the company is very common. Not only that, in a small corporation the officers would also be asked to pledge their personal assets. These restrictions only last until the federal loans are paid off. More importantly, executives can be compensated with stock options that are redeamable after the federal loans are paid. If these "best and brightest" do a good job of bringing the company back, they stand to make a lot of money on the stock. There is one other factor. These folks are getting federal loans because their companies are in no position to get commercial loans. Doesn't seem unreasonable to me.