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I'm not completely against it, but I worry about unintended consequences. The problem is that you're likely to see the CEO's leave. While that sounds good, it creates a situation where you now have a bank that's not doing well, looking for a CEO that's willing to take on a troubled bank that's saddled with bureaucratic stipulations while not paying nearly what the competitors pay. They're likely to get someone that may not be qualified that does even further damage to the banks and banking system.
'Should the Feds be Allowed to limit execs' > NO
'limit execs' pay at banks that get aid' > YES
Those banks should have been allowed the chance to fail,
Oh, what short memories we have.
"The morning of September 15 witnessed scenes of Lehman employees removing files, items with the company logo, and other belongings from the world headquarters at 745 Seventh Avenue. The spectacle continued throughout the day and into the following day.
Lehman's bankruptcy is the largest failure of an investment bank since Drexel Burnham Lambert collapsed amid fraud allegations 18 years prior.[57] Later that day, the Australian Securities Exchange (ASX) suspended Lehman's Australian subsidiary as a market participant after clearing-houses terminated their contracts with the firm.[58]
Lehman shares tumbled over 90% on September 15, 2008.[59][60] The Dow Jones closed down just over 500 points on September 15, 2008, which was at the time the largest drop in a single day since the days following the attacks on September 11, 2001.[61]"
The failure of Lehman Brothers is seen as the last straw that broke the credit market. The financial markets have been in a state of complete disarray ever since the U.S. Government allowed Lehman Brothers to file for bankruptcy on September 15th 2008 instead of intervening to save it, as it did with Bear Sterns and later with the insurance company, American International Group.
I'm not completely against it, but I worry about unintended consequences. The problem is that you're likely to see the CEO's leave. While that sounds good, it creates a situation where you now have a bank that's not doing well, looking for a CEO that's willing to take on a troubled bank that's saddled with bureaucratic stipulations while not paying nearly what the competitors pay. They're likely to get someone that may not be qualified that does even further damage to the banks and banking system.
How much further damage is possible?
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 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.
"Recognition events are still part of our culture," spokeswoman Melissa Murray said Tuesday afternoon. "It's really important that our team members are still valued and recognized."
This is all well and good, but using tax payer money? Shoot man, just the fact that you have a JOB is recognition enough these days!!!!
Claire McCaskill is right ... what planet do these people live on???
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.
The carrot is “if the bank turns around” and becomes profitable again, the CEO and others can claim their gross salaries, if not ~ they don’t get paid for failure!
No gross salaries for failures with taxpayers money. A fair wage for a fair days work, rewards for excellence when it’s earned not taken.
The carrot is “if the bank turns around” and becomes profitable again, the CEO and others can claim their gross salaries, if not ~ they don’t get paid for failure!
No gross salaries for failures with taxpayers money. A fair wage for a fair days work, rewards for excellence when it’s earned not taken.
In the first place, the government never should have handed over that bailout money without insisting on some accountability. Allowing banks to report the use of those funds on a voluntary basis was completely ridiculous--if not actually criminally negligent. Thanks again, Dubya!
'Should the Feds be Allowed to limit execs' > NO
'limit execs' pay at banks that get aid' > YES
It's a sad state that the Fed is involved in any ownership stake of a bank. Those banks should have been allowed the chance to fail, then this would not have been question. And those execs would have an opportunity to sell their talents elsewhere, if possible.
Ultimately the shareholders... and taxpayers are the fools.
Agreed.
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