The Raw Story | Dismay on Wall Street over Obama pay cap
I found this kinda unbelievable myself. Anyone else?
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.
[From The Raw Story | Dismay on Wall Street over Obama pay cap]
I think its absolutely ridiculous that Wall Street is complaining over the salary cap Obama is enacting. I think its one of the best moves he could have made in deciding who gets gov’t money. And to say “it’s a slippery slope when the government puts restrictions on how much an individual can earn in the private sector” is outrageous. The government should have every right to say what happens with it’s money and who it goes to. Are big CEOs seriously going to be picky about getting bailout money? I think the bailouts and stimulus plan situations continue to show just how far corporate America has dove off the edge of greed with no limits. Not that I’m a fan of bailing anyone out or allowing the gov’t to be involved in this at all. If anything good comes out of this though, it’s that it is showing us some of the true colors of the people behind the economic system of this great nation of red, white and green….
I’ll go ahead and play devil’s advocate for the sake of… whatever. Because I’m bored, I guess.
Capping salary seems like a nice idea because $500,000 sounds like a lot of money. But if we expect these banks to have the very best managers, CEOs, CFOs, etc. then they have to be able to pay competitively.
If the top 10% of CEOs can get $1,000,000 working in almost any other industry, then what’s the motivation for them to come work at a bank? The banks get the low-quality end of the managers, the ones who can’t get $1,000,000 jobs, and we’re stuck with idiots managing the banks again.
Meh.
Josh
February 6, 2009 at 12:01 am
Even with their outrageous salaries, the banks did not attract top quality. They attracted greedy schmucks whose incompetence drove those companies into the ground. A salary cap may attract talent that does high-powered finance for the thrill/rush & the challenge, not the money.
This, in fact, is the motivation that drives many CEOs according to Reed Hastings (CEO of Netflix). But he rejects Obama’s caps and instead says his income bracket needs to be taxed 50% instead of 30%. Anybody making $1m+ would be included, so that when a CEO rakes in $30m for bankrupting his company, at least we know $15 of that is going towards schools, highways, etc.
kevin
February 9, 2009 at 10:27 pm
the only potential problem i see with the pay cap is that all the people who BSed their way into their current CEO positions will be compelled to switch industries and then proceed to run every other sector of our economy into the ground
derek
February 11, 2009 at 11:43 am