FT.com / US & Canada - Obama ‘pay tsar’ to order huge cuts .
The top 25 executives at the seven US companies bailed out by the government face a dramatic cut in their cash pay.
Kenneth Feinberg, the Obama administration’s “pay tsar”, is set to unveil drastic curbs for those whose pay plans he can overrule.
OK it's symbolic - but symbols count.
Time for replication in the UK, I say
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Daft question given the connections but: Why is Goldman-Sachs excluded? Why was this conveniently announced AFTER they have awarded 15Bln in Bonuses?
Nothing like hobbling these corporations against their competition. why didn’t they let them fail to begin with? Now, when the Government has a stake in them, they decide to make them less competitive than the competition that didn’t take handouts? That sounds like a perfect way to make sure you don’t get your money back.
“Bank of America’s soon to retire chief executive, Ken Lewis, last week announced that he will forgo his $1.5m (£900,000) salary this year, under pressure from Feinberg.”
How’s that going to make Bank of American less competetive Fred Fry?
Martin,
Note what it says, he is retiring. So, how are they going to replace him with the Government limiting his replacement’s salary to $150,000, a tenth of the current salary?
Sure, I bet you can find lots of takes, but few if any that are also qualified to hold the position. the company is a mess, and as a bonus, his replacement will also get called in front of Congress to get grilled on what happened in the past, which not for anything, was lots of activities that the Government was pushing these companies to do in the first place, such as lend lots of money to people who could never afford to pay it back.
The most likely pool of candidate will be from inside the bank. However, many of them will fall outside the group getting the pay cut, so why would they take the job when it pays less then the job they currently hold?
Here is another comment as found on Instapundit as to how the Government is going to exclude itself from this crippling rule:
“GENEROUS PAY for new Freddie Mac CFO. “The government-controlled mortgage finance company is giving CFO Ross Kari compensation worth as much as $5.5 million. That includes an almost $2 million cash signing bonus and a generous salary that could top $2.3 million.” It’s okay to pay him a lot. He works for the government. “Freddie Mac is not just another company. It’s alive today, and nearly 80 percent owned by the government, only because almost $51 billion in taxpayer funds were pumped into it over the last year. More bailout money also may be needed in the quarters ahead as losses from its troubled mortgages mount.””
Do you think General Motor’s CEO or AIG’s boss are going to suffer from this rule? They might be working for $1 a year, but you can bet that there is a payoff somewhere for them.