The White House is responding to all those top executives that gave themselves bonuses and huge salaries after the gov't bailouts. Turns out as part of the bailouts, the Treasury Dept has the right to veto such things, and vetoing they are, to the tune of 90% pay cut for some of these execs.
I think it shows a very patient and careful approach, since these bonuses etc have been in the headlines for weeks, but only now is Obama and team deciding to use the big stick. Most of the execs just refused to self-regulate, to be decent.
Prediction: The same right wingers who complained out the bonuses and high salaries after the bailouts will now complain this move is "socialism", an evil plan to micromanage all the banks...
http://news.bbc.co.uk/2/hi/business/8321435.stm
I think it shows a very patient and careful approach, since these bonuses etc have been in the headlines for weeks, but only now is Obama and team deciding to use the big stick. Most of the execs just refused to self-regulate, to be decent.
Prediction: The same right wingers who complained out the bonuses and high salaries after the bailouts will now complain this move is "socialism", an evil plan to micromanage all the banks...
http://news.bbc.co.uk/2/hi/business/8321435.stm
| Quote: |
| Obama hails companies' pay cuts
President Barack Obama has welcomed plans to force some companies which accepted government aid during the financial crisis to cut executive pay. Firms paying bosses vast bonuses while getting state assistance offended people's values, the president said. Under Treasury plans, seven companies must slash the basic salaries of their 25 best-paid employees by up to 90%. Separately the US Federal Reserve wants to prevent bank bosses from taking excessive risks while pursuing bonuses. It proposes being able to veto the pay of any employee able to take risks that might threaten a firm's stability. But the Fed said it would not set pay caps or outlaw specific practices. 'Offends values' The Treasury plans apply to Bank of America, American International Group (AIG), Citigroup, General Motors, GMAC, Chrysler and Chrysler Financial - the seven companies that received the most aid from the US Treasury. As well as its top earners facing a 90% pay cut, the total paid to each firm's 125 top earners would be halved under the proposals. "It does offend our values when executives of big financial firms that are struggling pay themselves huge bonuses even as they rely on extraordinary assistance to stay afloat," President Obama said. |
