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Feds may limit execs' pay at banks that get aid - Yahoo! News (http://news.yahoo.com/s/ap/20090203/ap_on_go_pr_wh/obama_bailout - broken link)
WASHINGTON – The Obama administration is tackling the bailout of the battered financial sector on two tracks: overhauling how the government spends the money while devising new executive compensation restrictions for banks that get it.
Administration officials said the pay limits could be announced this week, but said the more complicated task of setting up a new framework for rescuing the nation's ailing banks would have to wait until early next week.
I understand the argument against 'Nationalizing' the financial institutions, and in a perfect world...well, we wouldn't be discussing this as a reality.
BUT, with the ridiculous expenditures that are being discovered (not really even hidden) by corporations that insisted they needed emergency assistance or else FAIL...
It isn't just this set of banks that needs to be looked at for limits on the levels of executive compensation, bonuses and stock options. These issues have been bubbling along for 10-15 years due to shareholder discontent with pay and options that are totally out of whack with reality. Boards of Directors have a fiduciary duty to the STOCKHOLDERS, not to the CEO and other insider fatcats and they are NOT living up to that duty. Another nail in the coffin of the capitalism that many people on this board hold in such high esteem. Ironic, the capitalist system is being killed by its very own INSIDERS, not the barbarian hordes from the barren wastes of bumphuqistan. When any industry calls for "deregulation" of itself, run, don't walk, to the nearest exit; deregulation being the gateway to destructive practices. Common sense limits served to keep things safe and steady for a long time, too bad we threw out our structural safety nets.
The US government is now an equity shareholder in many of these firms, We The Shareholders, have a fiduciary responsibility to insure that the companies that we have invested in pursue the most profitable course so that we can realize the greatest gain for our investment. In short, damned right we have a right to set limits on executive pay.
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.
'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.
'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.
It isn't just this set of banks that needs to be looked at for limits on the levels of executive compensation, bonuses and stock options. These issues have been bubbling along for 10-15 years due to shareholder discontent with pay and options that are totally out of whack with reality. Boards of Directors have a fiduciary duty to the STOCKHOLDERS, not to the CEO and other insider fatcats and they are NOT living up to that duty. Another nail in the coffin of the capitalism that many people on this board hold in such high esteem. Ironic, the capitalist system is being killed by its very own INSIDERS, not the barbarian hordes from the barren wastes of bumphuqistan. When any industry calls for "deregulation" of itself, run, don't walk, to the nearest exit; deregulation being the gateway to destructive practices. Common sense limits served to keep things safe and steady for a long time, too bad we threw out our structural safety nets.
Well phrased. But we are talking real life here. Yes, in principle boards have a duty to their shareholders and not CEOs. However, over time "exclusive clubs" were created. Inside the clubs they support each other to keep the engine running. Today's directors are tomorrow's CEOs and vice versa. Like in a mob family, everything stays inside. When Ford needed a new CEO , they chose Boeing executive Alan Mulally as new chief. When Ford needed one, Robert Nardelli of Home Depot (!) was their man. The same one who perused GE top seat, just 5 year before. They keep membership in the exclusive club for life.
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