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I think reasonable limits on exec pay is appropriate given that these companies are turning to the government for assistance. I think canceling junkets is appropriate, as well.
I have nothing against Wells Fargo doing that. It was the only major bank that didn't ask for a bail out. They were one of the very few that handled the business responsibly over the years, while others sold their soul. In fact, Wells Fargo just paid $371.5 million in quarterly dividend back to the government.
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Originally Posted by delusianne
How stupid. The top-talent people will instantly go elsewhere, if not for the money then certainly for their pride! Dont interfere with this, let the market do its job. Those bonuses werent paid out of bailout money.
Let them. If their talent gets us the results that they did, they don't need to be treated any better. My only concern is, how are golden parachutes going to be handled.
And bonus needs to be performance based. Given recent history of exaggerating/misrepresenting profits and financial health of companies, performance too will need to be scrutinized instead of taking their word for it.
It's beginning. We have started on the road to communism. We all looked at Russia with amazement when they nationalized their oil industry...well, it's started here. The gov't has taken over the financial industry, and it will spread to other areas.
As a general rule, government does not run business as efficiently as private industry. It can't. The idea that the government can tell private industry what to do is stupid. There is a reason that talented people tend to not work for the government--they just don't pay as well as private industry. This idea of a salary cap is only going to hurt the companies.
I have nothing against Wells Fargo doing that. It was the only major bank that didn't ask for a bail out. They were one of the very few that handled the business responsibly over the years, while others sold their soul.
Let them. If their talent gets us the results that they did, they don't need to be treated any better.
Wells Fargo actually did get bailout funds. I think it was about $25 billion. And when these banks and investment houses say that they didn't use bailout money for these junkets and bonuses, the problem is so what? If they hadn't gotten the bailout, would the money have been there for the junket and bonuses? Income is income. Just because you earmark some income for certain purposes, only means that other money is freed up.
Wells Fargo actually did get bailout funds. I think it was about $25 billion. And when these banks and investment houses say that they didn't use bailout money for these junkets and bonuses, the problem is so what? If they hadn't gotten the bailout, would the money have been there for the junket and bonuses? Income is income. Just because you earmark some income for certain purposes, only means that other money is freed up.
There are several banks that got the bail out, without asking for it. In fact, many have gone official claiming that they are not going to alter their business model, and will not lend any more or less, despite of Paulson writing them a check.
I don't blame these banks for it. I blame Paulson for mutilating the purpose of TARP and distributing money.
How stupid. The top-talent people will instantly go elsewhere, if not for the money then certainly for their pride! Dont interfere with this, let the market do its job. Those bonuses werent paid out of bailout money.
Gotta disagree with you here.
Those managers who ran their banks into the ground hardly qualify as "top talent." Who wants to hire someone who ran Citibank into the ground? Pride? If they had any they would have resigned a long time ago. They all deserve to have a bankruptcy on their resume. You can hire plenty of smart people at $400K per year.
Don't interfere with this? You mean like pumping billions into their institutions?
Let the market do its job? The market and their nmismanagement are what got the financial system into this mess. If we had let the market "do its job" we would have let them declare bankruptcy.
Those bonuses weren't paid out of bailout money? Then where did the money come from, fleecing shareholders? They all came to Washington and begged for cash - too bad that doormat Paulson didn't make them sign up to some stipulations before handing over that money our government borrowed in order to give them.
If you received assistance, your executives will have their pay capped. If you don't like the pay cap, enjoy bankruptcy!
Those managers who ran their banks into the ground hardly qualify as "top talent." Who wants to hire someone who ran Citibank into the ground? Pride? If they had any they would have resigned a long time ago. They all deserve to have a bankruptcy on their resume. You can hire plenty of smart people at $400K per year.
Don't interfere with this? You mean like pumping billions into their institutions?
Let the market do its job? The market and their nmismanagement are what got the financial system into this mess. If we had let the market "do its job" we would have let them declare bankruptcy.
Those bonuses weren't paid out of bailout money? Then where did the money come from, fleecing shareholders? They all came to Washington and begged for cash - too bad that doormat Paulson didn't make them sign up to some stipulations before handing over that money our government borrowed in order to give them.
If you received assistance, your executives will have their pay capped. If you don't like the pay cap, enjoy bankruptcy!
Unfortunately many of the leadership who created the damage are gone and now replaced with firemen. The question might be? Do you cut the salary of firemen in the middle of the fire? Let's hope we don't see in the future a headline about the brain drain from government backed entities.
I think it should be pointed out that we're talking about replacing CEO's that ignored that their companies were failing and kept rewarding poor performance with enormous bonuses. Bonuses are supposed to be for strong performance, not for driving a company to bankruptcy. We're talking about replacing CEO's that ignored the problems while redecorating their executive bathroom for a price that would pay off many people's homes. We're talking about CEO's that sign off today on expensive junkets despite the fact that they needed federal funds to stay afloat, because those expensive junkets are part of their "corporate culture." What exactly makes these people qualified to haul their companies from the edge of the abyss?
There's a Grand Canyon of disparity between the reality many of these corporate executives seem to be living, and the reality of how companies are supposed to work. These banks, brokerages, and large corporations don't exist to pay exec's enormous salaries and give them lives of fantastic privilege. The businesses exist for the sole purpose of turning a profit. The most important qualification for a CEO is to recognize this, and to be able to make it happen. The current ones don't seem to have that qualification.
I'm not disagreeing with your point about the behavior of the executives, and I'm not saying it would be bad if they left. My point is that once they leave, you're in the position of hiring executives at about a quarter of the salary they can earn elsewhere.
Obama is proposing a salary cap of $500k and any additional salary to be paid in stock that cannot be cashed in until the bailout funds are repaid.
I think that is fair - if they're receiving bailout funds.
Seems reasonable to me, with the stock cashout provision.
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