Obama Sets Executive Pay Limits - Tilted Forum Project Discussion Community

Seaver · 02-04-2009, 05:04 PM

Obama sets executive pay limits - CNN.com

Quote:

WASHINGTON (CNN) -- Pledging to take "the air out of golden parachutes," President Obama announced Wednesday that executives of companies receiving federal bailout money will have their pay capped at $500,000 under a revised financial compensation plan.
$500,000 will be the limit on executive salaries at companies receiving tax dollars, President Obama says.

$500,000 will be the limit on executive salaries at companies receiving tax dollars, President Obama says.

Last year's "shameful" handout of $18 billion in Wall Street bonuses "is exactly the kind of disregard for the costs and consequences of their actions that brought about this crisis: a culture of narrow self-interest and short-term gain at the expense of everything else," Obama said to reporters at the White House.

"For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis isn't just bad taste -- it's a bad strategy -- and I will not tolerate it. We're going to be demanding some restraint in exchange for federal aid -- so that when firms seek new federal dollars, we won't find them up to the same old tricks," the president added.

Under Obama's plan, companies that want to pay their executives more than $500,000 will have to do so through stocks that cannot be sold until the companies pay back the money they borrow from the government. The rules will be implemented by the Treasury Department and do not need to be approved by Congress.
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The restrictions will most affect large companies that receive "exceptional assistance," such as Citigroup.

The struggling banking giant has taken about $45 billion from the government's Troubled Asset Relief Program.

The new rules also will mandate that shareholders of banks have a greater say about the salaries paid to company heads. The measures will put in place greater transparency for costs such as holiday parties and office renovations.
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Obama also pledged further reforms in the future, promising that the administration will "examine the ways in which the means and manner of executive compensation have contributed to a reckless culture and quarter-by-quarter mentality that in turn have wrought havoc in our financial system." Video Watch Obama talk about limiting executive salaries »

"We're going to be taking a look at broader reforms so that executives are compensated for sound risk management and rewarded for growth measured over years, not just days or weeks," Obama said.

I have to say, I salute Obama for taking this stand. I never supported the massive free-money grab-bag we're passing off as a stimulus plan, however I regained a lot of respect for Obama for this.

The primary reason I was severely opposed to the stimulus plan was it rewarded companies who took the huge risks. The risks allowed massive amounts of capital to flow into a company during the golden years, and I felt they should pay the piper during the bad years. I saw the stimulus packages as rewarding bad behavior while the companies who shied away from such risks as being double-punished.

At least this prevents the head honchos from being double-rewarded.

blktour · 02-04-2009, 05:16 PM

If I owned a company and it flopped, it is my fault. why is this different? since it affects more people?

I dont get this at all.

ASU2003 · 02-05-2009, 05:05 AM

This makes a lot of sense to me.

If you run a large company, and you need taxpayer assistance to prevent it from flopping, the executives can't take 10% of the recovery money in salary. $500,000 is still quite a bit, but when one CEO was making $68.5 million before, it is a wake up call that he needs to fix his company and repay the taxpayers.

filtherton · 02-05-2009, 06:05 AM

I like the idea.

I am amused by the whining that seems to be occuring on Wall Street (though who knows if it actually is occurring). I heard an interview with a "compensation consultant" who was complaining about how some of these poor executives had become accustomed to a lifestyle which they just couldn't maintain if they had to subsist on a mere $500,000 a year. I tried to make out some sort of contempt in his voice, but there was none: he was fucking seriously complaining on behalf of these douchebags. These people who are supposed to be so brilliantly able to manage money that they deserve million dollar salaries can't seem to figure out how to make it on half a million a year.

I know families who have eked out a living on roughly $20,000 a year who have just had to come to terms with the fact that one of them needs to find a new fucking job. If any of these fucking overpaid Wall Street babies think they have it rough, then they could stand to learn a thing or two about what it's like to try and make a living doing something other than dicking around with other people's money.

Then I thought about it, and I realized that this "compensation consultant" guy's job was to tell executives that they should be making more money, and that executives probably paid him pretty well to do that job. Of course he's going to try to make it sound like their current pay rates are justified, he's a lackey.

dippin · 02-05-2009, 06:59 AM

On a related note, I think that divulging spending on certain superfluous items like companies receiving bail out money will have to should actually be extended to all publicly traded companies. Right now, it is impossible to tell.

When companies can order the airbus a380 and remain anonymous, hiding away the expense under some sort of investment, the shareholder's interest is certainly not being served.

roachboy · 02-05-2009, 07:40 AM

i support this move entirely.
it's becoming increasingly obvious that american corporate culture has grown dysfunctional as a whole. once the severing of capital from labor was rendered axiomatic, the distortions we are seeing now--which have been operative for a long time--followed in a straight line.

my main concern is that obama is addressing an obvious symptom rather than the disease---but as an aspect of a larger project of changing the political climate within which corporate culture operates, it is still a good move.

Plan9 · 02-05-2009, 08:01 AM

Gotta start somewhere. I figure pissing people off and putting their heads back under the clouds is a real good place. A little system shock'll do wonders.

aceventura3 · 02-05-2009, 08:31 AM

The gesture is essentially empty. But if it makes people happy, I guess it serves a purpose.

Quote:

Feb. 5 (Bloomberg) -- Executives at Goldman Sachs Group Inc., JPMorgan Chase & Co. and hundreds of financial institutions receiving federal aid aren’t likely to be affected by pay restrictions announced yesterday by President Barack Obama.

The rules, created in response to growing public anger about the record bonuses the financial industry doled out last year, will apply only to top executives at companies that need “exceptional” assistance in the future. The limits aren’t retroactive, meaning firms that have already taken government money won’t be subject to the restrictions unless they have to come back for more.

The new guidelines are the first salvo in a broader financial-rescue plan Obama plans to announce next week. The president and Congress have had to defend billions in aid to banks that continue to provide generous bonuses and luxury perks while posting record losses. Pay caps may provide the political cover the administration needs to deliver additional infusions of capital into the financial sector that may be necessary.

Some analysts said the new rules wouldn’t have much effect.

Obama, 47, “is not proposing to go back and get that $18.4 billion in bonuses back,” Laura Thatcher, head of law firm Alston & Bird’s executive compensation practice in Atlanta, said of the cash bonuses New York banks paid last year, the sixth- biggest haul in history. “Right now, we have not clamped down” on pay at banks.

Huge Paydays

In addition, some executives may be compensated for the potential reduced salaries with restricted stock grants, which may result in huge paydays after the bank repays the government assistance with interest.

“They’re just allowing companies to defer compensation,” said Graef Crystal, a former compensation consultant and author of “The Crystal Report on Executive Compensation.”

The restrictions are “a joke,” he said, because “if the government is paid pack, you can be sure that the stock will have risen hugely.”

According to the new guidelines, announced at the White House yesterday by Obama and Treasury Secretary Timothy Geithner, senior executives at banks that negotiate “exceptional assistance” deals with Treasury, such as the targeted relief provided to Citigroup Inc. last November or to Bank of America Corp. in January, would be limited to annual compensation -- salary plus bonus -- of $500,000.

Office Redecoration

Other perks that enraged Americans -- such as a $1.2 million office redecoration by the chief executive of Merrill Lynch & Co., which took $10 billion in government funds, or a four-day Las Vegas junket for executives at Wells Fargo & Co., which accepted $25 billion -- will be subject to new disclosure rules.

A White House official called it the name-and-shame provision, based on the idea that banks would limit such benefits if forced to disclose them.

“For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis is not only in bad taste, it’s a bad strategy, and I will not tolerate it as president,” Obama said yesterday.

Yet none of the new rules will apply to any firm until it negotiates an extraordinary deal with the federal government to remain solvent.

‘Double Dippers’

“What I’m a little bit surprised by is that those pay restrictions don’t apply to what I would call the double dippers, which is basically Citigroup and Bank of America, which have come back for capital,” said Charles Peabody, an analyst at Portales Partners LLC in New York. Both banks received money under the Treasury’s $700 billion Troubled Asset Relief Program, and required additional bailout funds and a government guarantee of their assets.

The Financial Services Roundtable, a Washington-based trade group representing banks, called the restrictions “a measured response” in a news release yesterday.

For some firms, the rules are insignificant. Morgan Stanley is among companies that don’t expect the restrictions to affect their business because they foresee no need for additional government help.

“We have one of the highest Tier 1 capital ratios among financial services firms, so we do not anticipate the need for additional government capital,” said Mark Lake, a spokesman for Morgan Stanley in New York, when asked about the new restrictions.

Repaying TARP

Goldman Sachs said yesterday it wants to repay $10 billion it got from Treasury under the TARP to signal the firm is healthy and to escape limitations that came with that infusion of money. “Our financial condition is sound and, subject to approval from regulators, we hope to repay TARP money as soon as practicable,” said Lucas van Praag, a spokesman for New York- based Goldman Sachs.

JPMorgan CEO Jamie Dimon said Feb. 3 that the firm didn’t need capital and didn’t ask for TARP funding. The lender accepted the $25 billion it received from the first capital injection at the request of the government and to help stabilize the banking system, he said.

Other restrictions on banks that get major new bailout packages include a “say on pay” provision that would require new executive pay packages to be subjected to nonbinding shareholder resolutions. Companies also must have in place provisions to reclaim, or “claw back,” bonuses and incentives from the top 25 senior executives if they are found to engage in deceptive practices. Bans on so-called golden parachute severance payments will be extended to more executives.

Treasury Discretion

Jen Psaki, a White House spokeswoman, said Treasury “will have discretion to apply” the restrictions “to the top leadership of the firm, but the size of that group will vary depending on the structure and size of the institution.”

Some of the new rules, including disclosure of luxury perks and the ban on golden parachutes, will also apply to banks taking part in generally available government capital programs, similar to the TARP, which has provided capital to some 360 financial institutions so far. The rules do not apply retroactively to TARP participants, however.

White House spokesman Robert Gibbs said the rules weren’t intended to be “overly punitive,” while a senior administration officials said their primary goal is to align the interests of top executives at bailed-out firms with those of shareholders, who now include U.S. taxpayers.

Right Direction

Nell Minow, founder and president of the Corporate Library, a corporate-governance research company in Portland, Maine, said the rules are in the right direction.

“Not allowing the restricted stock awards to vest until the government’s been paid back goes a step toward the goal,” she said.

Bill Black, a professor of economics and law at the University of Missouri-Kansas City, said the entire Wall Street pay structure is dysfunctional and needs to be revamped.

“Compensation is the root that created the perverse incentives and led to the current financial crisis,” he said.

Yet the new guidelines won’t bring about that change, said Sharyn O’Halloran, a professor of political science at Columbia University in New York.

“The goal is for accountability and the argument is that if a large portion of executive pay is based on excessive risk- taking, then you would anticipate them taking excessive risk,” she said.

Bloomberg.com: Politics

You know what would have a real impact? Doing something like saying to financial institution taking federal money who issue credit cards to discontinue the practice of raising rates on cardholders during this crisis. For example I have a card that I have had for about 13 years through a bank that recieved TARP money. The APR on the card was 11.9% and they raised it to 24.9% about a month ago. I don't give a crap about what the CEO makes, but I do care about the fact that they want to dig into my pocket as a consumer and as a tax payer.

Tully Mars · 02-05-2009, 08:45 AM

Quote:

Originally Posted by roachboy

i support this move entirely.
it's becoming increasingly obvious that american corporate culture has grown dysfunctional as a whole. once the severing of capital from labor was rendered axiomatic, the distortions we are seeing now--which have been operative for a long time--followed in a straight line.

my main concern is that obama is addressing an obvious symptom rather than the disease---but as an aspect of a larger project of changing the political climate within which corporate culture operates, it is still a good move.

Ditto. Esp. the part about dealing with symptom rather the the disease as a whole. Hopefully this is but one angle of attack on the overall all problem.

SabrinaFair · 02-05-2009, 09:20 AM

It's definitely a step in the right direction. I don't think it'll solve all of corporate American's myriad problems, but it definitely helps ensure that taxpayer dollars aren't going to pay for some CEO's wife's Botox injections.

filtherton · 02-05-2009, 09:45 AM

Quote:

Originally Posted by aceventura3

You know what would have a real impact? Doing something like saying to financial institution taking federal money who issue credit cards to discontinue the practice of raising rates on cardholders during this crisis. For example I have a card that I have had for about 13 years through a bank that recieved TARP money. The APR on the card was 11.9% and they raised it to 24.9% about a month ago. I don't give a crap about what the CEO makes, but I do care about the fact that they want to dig into my pocket as a consumer and as a tax payer.

Wait, so you want the government to intervene and regulate a completely legal and profitable business practice because you lacked the foresight to not get yourself in debt?

Ace, I'm impressed. Welcome to socialism.

Tully Mars · 02-05-2009, 10:02 AM

Quote:

Originally Posted by SabrinaFair

It's definitely a step in the right direction. I don't think it'll solve all of corporate American's myriad problems, but it definitely helps ensure that taxpayer dollars aren't going to pay for some CEO's wife's Botox injections.

Gez, how much does botox cost? I figured with 500K a year you could get those least every other month.

aceventura3 · 02-05-2009, 11:19 AM

Quote:

Originally Posted by filtherton

Wait, so you want the government to intervene and regulate a completely legal and profitable business practice because you lacked the foresight to not get yourself in debt?

Ace, I'm impressed. Welcome to socialism.

Sorry for the sarcasm. But, when trying to communicate with liberals I often try to relate to them in a manner that they might understand, so as they obsess over executive pay they get screwed in so many other ways and not even know it.

Willravel · 02-05-2009, 11:26 AM

Quote:

Originally Posted by Seaver

I have to say, I salute Obama for taking this stand. I never supported the massive free-money grab-bag we're passing off as a stimulus plan, however I regained a lot of respect for Obama for this.

Obama's winning over conservatives!

Quote:

Originally Posted by aceventura3

The gesture is essentially empty. But if it makes people happy, I guess it serves a purpose.

Obama's winning over a conservative!

aceventura3 · 02-05-2009, 12:45 PM

Quote:

Originally Posted by Willravel

Obama's winning over conservatives!

Obama's winning over a conservative!

Hey, as opposed to Rush I want Obama to succeed. I want him to read what I write and act accordingly. If he does what is right, I don't care about his political label. And I recognize that the current situation is mostly due to an irrationally based emotional response to what is generally a normal business cycle. If it takes empty gestures so that people regain confidence, so be it. the biggest problem right now is that his words describing our economic condition are making the situation worse. the stock market is ready to run, he needs to stop with dumping cold water on it.

KirStang · 02-05-2009, 01:22 PM

It's a good idea, so long as it doesn't discourage people from actually wanting those top exec jobs.

If I'm a brilliant economist and I could make more than $500,000 in Signapore, i'm totally there.

Locobot · 02-05-2009, 02:04 PM

Quote:

Originally Posted by KirStang

It's a good idea, so long as it doesn't discourage people from actually wanting those top exec jobs.

If I'm a brilliant economist and I could make more than $500,000 in Signapore, i'm totally there.

On the other hand a company full of brilliant economists shouldn't need money from everyone's paycheck to keep their company afloat. If Singapore wants a bunch of overpaid failed businesspeople they can have them.

Charlatan · 02-05-2009, 05:03 PM

I can tell you from ground zero that they are laying off and cutting back staff here as well. The banking industry is in a global tailspin and the expat bankers are getting hit the hardest.

Seaver · 02-05-2009, 05:21 PM

[quote]Wait, so you want the government to intervene and regulate a completely legal and profitable business practice because you lacked the foresight to not get yourself in debt?

Ace, I'm impressed. Welcome to socialism. /quote]

Not quite. If a company is failing, it should be allowed to fail. If it is deemed so important to the national system that something must be done, then do not allow the same policies which caused the company to fail to continue with taxpayer money.

Essentially it's telling the druggie in rehab he can't take a fix because that's what got him in the place to start with.

Quote:

Obama's winning over conservatives!

I'm giving him a chance (more than most give conservatives). And as I said in a previous thread... if he makes earmarks fully illegal once and for all I'll even vote for him (though doubt Pelosi will let him).

Tully Mars · 02-05-2009, 05:52 PM

Quote:

Originally Posted by Charlatan

I can tell you from ground zero that they are laying off and cutting back staff here as well. The banking industry is in a global tailspin and the expat bankers are getting hit the hardest.

I don't know any expat bankers down here but I do know the brown substance is starting to hit the fan here. The peso's in a nose dive and the economy is dead. Much the local economy is driven by tourism, Mexican tourism. Many places are running at less then 40% occupancy. The service staff are being laid off left and right.

guyy · 02-05-2009, 06:35 PM

About time!

filtherton · 02-05-2009, 06:54 PM

Quote:

Originally Posted by aceventura3

Sorry for the sarcasm. But, when trying to communicate with liberals I often try to relate to them in a manner that they might understand, so as they obsess over executive pay they get screwed in so many other ways and not even know it.

It's okay. It's not like these executive pay limits are contributing more to our screwing.

In any case, the article you posted doesn't really say anything all that interesting. The author seemed to be under the impression that everybody thinks Obama's plan would limit executive pay for every executive evar; I don't know anyone who is under this impression. It seems like it was written to burst a bubble that didn't exist.

ASU2003 · 02-05-2009, 06:56 PM

I was for it until I read about the deferred stock options (with no limits that I know of). I would rather get paid in stock options, do I have to pay the 35% tax when I cash those out? If they are long term gains, would it only be 15% tax on the capital gain amount?

At least it will give the CEO and other executives an incentive to bring back their companies and work hard to do so.

Seaver · 02-06-2009, 05:10 PM

Quote:

I was for it until I read about the deferred stock options (with no limits that I know of). I would rather get paid in stock options, do I have to pay the 35% tax when I cash those out? If they are long term gains, would it only be 15% tax on the capital gain amount?

Well, they can't cash out on those stocks until the federal loan is repaid in full. So I honestly don't care which of the tax codes it falls under as the government will get their money back with interest before it becomes a factor.

Tully Mars · 02-06-2009, 07:10 PM

Quote:

Originally Posted by Seaver

Well, they can't cash out on those stocks until the federal loan is repaid in full. So I honestly don't care which of the tax codes it falls under as the government will get their money back with interest before it becomes a factor.

And if the company fails how much will their stock options be worth? Seems to me like suddenly they have a direct interest in the company's success. Before they made millions whether the company made or lost money.
-----Added 6/2/2009 at 10 : 14 : 16-----

Quote:

Originally Posted by aceventura3

Sorry for the sarcasm. But, when trying to communicate with liberals I often try to relate to them in a manner that they might understand, so as they obsess over executive pay they get screwed in so many other ways and not even know it.

I understand completely. When I try to communicate with conservatives I tend to use smaller words and talk real slowly.

filtherton · 02-06-2009, 07:41 PM

Quote:

Originally Posted by Tully Mars

And if the company fails how much will their stock options be worth? Seems to me like suddenly they have a direct interest in the company's success. Before they made millions whether the company made or lost money.

But how are companies going to get the best and brightest CEOs if they insist that the CEOs actually care about what happens to the company?

Paq · 02-06-2009, 09:01 PM

haha, personally, i'm all for the 500K cap and anything extra in stock options that won't be exercisable until the federal money is paid off. Make the ceo put his money where his mouth is. As a stock trader/investor, i can say i'd feel MUCH better about putting money in a company if i knew the CEO's only way of making any 'real' money was by making the company profitable again.

Tully Mars · 02-07-2009, 02:21 AM

Quote:

Originally Posted by filtherton

But how are companies going to get the best and brightest CEOs if they insist that the CEOs actually care about what happens to the company?

The best and the brightest are going to take their ball and leave the play ground when they're forced to work for less than 200 million a year so I don't see the stock retainment issue ever having anything to do with them.

Strange Famous · 02-07-2009, 04:30 AM

I think its a good start.

ottopilot · 02-07-2009, 04:40 AM

Pay limits are fine as long as they are applied to everyone's pay structure when all or partial funds come from the federal government. College/university execs, political organizations, federally funded advocacy groups, lobbyists, federal employees, senators, congressmen, the president, the list goes on and on. This would include all perks and freebies as part of total income.

I believe these excesses are irresponsible and should be addressed (like the obscene extravagance of the presidential inauguration during dire economic times). But this is only a drop in the bucket related to the real economic issues we need to address. These are diversions... sort of like all the hubbub about Olympians smoking pot and executive pay caps when a $780-827,000,000,000 government-expansionists wet-dream of a pork-deal is about to be voted in as a "stimulus" package... and most of you (America) and our Senators don't have a clue as to what's in the details. As long as everyone's feeling all hopey-changey, I guess the details don't matter.

FoolThemAll · 02-07-2009, 12:27 PM

As long as they're only applied to companies that receive bailout money, I'm all for it. I see this - without sarcasm - as a case of two wrongs making one right. Not very right, right on a mediocre level actually, but it's going to mitigate the insanity.

I guess the democrats are determined to take back the mantle of fiscal liberalism after the GOP stole it.

ScottKuma · 02-07-2009, 02:48 PM

I'm of two minds on this:

1) How the hell is it the Government's right, even if they DO give money to these companies, to make demands on CEO compensation? Last time I checked, neither the Executive branch nor the Legislative branch aren't given any such powers in the Constitution! Let the marketplace will sort it out.

and

2) ALL CEO's compensations should be limited, anyhow. I think that the gap between the normal salary in a company and the CEO's salary has gotten way out of hand. I think that it should be limited to some multiple of the mean salary in the company. The way it exists now, the CEO does a GOOD job by keeping the workers' salaries low, or by shipping jobs overseas, where labor is cheap. By limiting salaries to a multiple of the mean workers' salaries, there is actually an incentive to keep jobs in the US!

And then my head explodes from the conflict.

Seaver · 02-07-2009, 03:32 PM

Quote:

1) How the hell is it the Government's right, even if they DO give money to these companies, to make demands on CEO compensation? Last time I checked, neither the Executive branch nor the Legislative branch aren't given any such powers in the Constitution! Let the marketplace will sort it out.

A loan company has full right to tell people how they are to use loaned money until it's paid in full. This is a similar situation.

Quote:

2) ALL CEO's compensations should be limited, anyhow. I think that the gap between the normal salary in a company and the CEO's salary has gotten way out of hand. I think that it should be limited to some multiple of the mean salary in the company. The way it exists now, the CEO does a GOOD job by keeping the workers' salaries low, or by shipping jobs overseas, where labor is cheap. By limiting salaries to a multiple of the mean workers' salaries, there is actually an incentive to keep jobs in the US!

I figure if the CEO runs the company well, the company should decide how much it's worth. The companies clearly were mismanaged, if they were so mismanaged they need government aid then the CEOs should not retain their massive income.

Quote:

And then my head explodes from the conflict.

I prefer to bang my head against my desk, it releases the pressure before it completely explodes.

ASU2003 · 02-07-2009, 05:10 PM

Quote:

Originally Posted by ScottKuma

I'm of two minds on this:

1) How the hell is it the Government's right, even if they DO give money to these companies, to make demands on CEO compensation? Last time I checked, neither the Executive branch nor the Legislative branch aren't given any such powers in the Constitution! Let the marketplace will sort it out.

How would the marketplace sort it out? What would be the end result?

Just for fun, let's say that the failed companies (all of them) go down like Enron, WorldCom, etc... The top executives having done nothing wrong in this case (because it was the slow down in the economy), would have made an additional $XX million dollars, and probably had paid themselves first. They would care a little bit, but at the same time, retirement wouldn't be a horrible option either.

But, what happens to all the employees of these companies? Can they form a new company from the ashes? Will there be enough loans to start this company? Would a foreign company with cheap labor and living standards provide the service?

The unemployment rate will go up, home prices will fall as people don't have enough savings to continue living in their homes (let alone buy a new home), more jobs will be lost in the smaller businesses around town, and pretty much what is going on in some places now. Politicians would lose their jobs because of the situation.

aceventura3 · 02-09-2009, 08:27 AM

Quote:

Originally Posted by Tully Mars

I understand completely. When I try to communicate with conservatives I tend to use smaller words and talk real slowly.

I like pictures.

From today's WSJ. Here is a link to the full article.

Loopholes Sap Potency of Pay Limits - WSJ.com

Does Obama really believe his words and empty gesture would have an impact on actual executive compensation, or is he using words and an empty gesture to sucker people?

roachboy · 02-09-2009, 08:31 AM

gee, ace, that's a one-dimsensional reading of one-dimensional pictures.
you could also use them to argue that there's something unhinged about american corporate culture in general, and that the wasj is advocating fraud---which is not recognized as fraud because the corporate culture that it synchs with is itself unhinged (a circle, you see)...

pan6467 · 02-09-2009, 08:38 AM

Quote:

Originally Posted by aceventura3

You know what would have a real impact? Doing something like saying to financial institution taking federal money who issue credit cards to discontinue the practice of raising rates on cardholders during this crisis. For example I have a card that I have had for about 13 years through a bank that recieved TARP money. The APR on the card was 11.9% and they raised it to 24.9% about a month ago. I don't give a crap about what the CEO makes, but I do care about the fact that they want to dig into my pocket as a consumer and as a tax payer.

This is extremely accurate and true. I am not a person who believes CEOs deserve great amounts of money when they lay people off or take tax revenue/abatements to operate.

But, the real focus right now should be on those banks who got TARP monies and are raising their Credit Card rates. My Chase went from 11.9 to 22.9 in one month. Minimum payments went up from $10 to $25. Another card from an RBS subsidiary bank went from 9.9% to 25% with a raise in minimum payment from $25 to $75.

Now, if I am having problems paying my credit card off to begin with due to this economy, how the Hell am I going to pay those increases? Let alone the interest on items I bought thinking I was buying at 9.9% now I'm paying 1/4 of the price in interest?

Let's see Obama do something about that, not freaking lip service to try to appease the people, while not truly changing anything.
-----Added 9/2/2009 at 11 : 39 : 27-----

Quote:

Originally Posted by aceventura3

Does Obama really believe his words and empty gesture would have an impact on actual executive compensation, or is he using words and an empty gesture to sucker people?

I truly believe it is the latter.

aceventura3 · 02-09-2009, 08:55 AM

Quote:

Originally Posted by roachboy

gee, ace, that's a one-dimsensional reading of one-dimensional pictures.
you could also use them to argue that there's something unhinged about american corporate culture in general, and that the wasj is advocating fraud---which is not recognized as fraud because the corporate culture that it synchs with is itself unhinged (a circle, you see)...

You call it "unhinged", I call it "people will do what they think is in their best interest." I think that is honest. I would not trust a CEO to do what is best for me, nor would I trust a politician to do that either. It is my responsibility to make sure things happen that are best for me. That is a fundamental difference between me and many who post here.

roachboy · 02-09-2009, 09:05 AM

what the wsj is advocating, ace, is fraud.
that's the point.
the explanation for it is an unhinged corporate culture, one in which all that is important is me me me, what's in my interest, what serves my immediate material requirements.

Cynthetiq · 02-09-2009, 09:10 AM

Quote:

Originally Posted by roachboy

what the wsj is advocating, ace, is fraud.
that's the point.
the explanation for it is an unhinged corporate culture, one in which all that is important is me me me, what's in my interest, what serves my immediate material requirements.

how is it fraud? the WSJ loopholes are just that loopholes. Fraud is fraud. It isn't any different from some divorcee who puts all assets in the new spouse's name to keep their worth and value whole.

02-05-2009, 06:05 AM	#4 (permalink)
filtherton Junkie Location: In the land of ice and snow.	I like the idea. I am amused by the whining that seems to be occuring on Wall Street (though who knows if it actually is occurring). I heard an interview with a "compensation consultant" who was complaining about how some of these poor executives had become accustomed to a lifestyle which they just couldn't maintain if they had to subsist on a mere $500,000 a year. I tried to make out some sort of contempt in his voice, but there was none: he was fucking seriously complaining on behalf of these douchebags. These people who are supposed to be so brilliantly able to manage money that they deserve million dollar salaries can't seem to figure out how to make it on half a million a year. I know families who have eked out a living on roughly $20,000 a year who have just had to come to terms with the fact that one of them needs to find a new fucking job. If any of these fucking overpaid Wall Street babies think they have it rough, then they could stand to learn a thing or two about what it's like to try and make a living doing something other than dicking around with other people's money. Then I thought about it, and I realized that this "compensation consultant" guy's job was to tell executives that they should be making more money, and that executives probably paid him pretty well to do that job. Of course he's going to try to make it sound like their current pay rates are justified, he's a lackey. Last edited by filtherton; 02-05-2009 at 06:09 AM..

02-05-2009, 07:40 AM	#6 (permalink)
roachboy Super Moderator Location: essex ma	i support this move entirely. it's becoming increasingly obvious that american corporate culture has grown dysfunctional as a whole. once the severing of capital from labor was rendered axiomatic, the distortions we are seeing now--which have been operative for a long time--followed in a straight line. my main concern is that obama is addressing an obvious symptom rather than the disease---but as an aspect of a larger project of changing the political climate within which corporate culture operates, it is still a good move. __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite

02-05-2009, 08:01 AM	#7 (permalink)
Plan9 I Confess a Shiver	Gotta start somewhere. I figure pissing people off and putting their heads back under the clouds is a real good place. A little system shock'll do wonders. __________________ *Whatever you can carry.* "You should not drink... and bake."

02-05-2009, 09:20 AM	#10 (permalink)
SabrinaFair Junkie Location: Louisville, KY	It's definitely a step in the right direction. I don't think it'll solve all of corporate American's myriad problems, but it definitely helps ensure that taxpayer dollars aren't going to pay for some CEO's wife's Botox injections. __________________ "With all its sham, drudgery, and broken dreams, it is still a beautiful world. Be cheerful. Strive to be happy." -Desiderata

02-05-2009, 05:03 PM	#18 (permalink)
Charlatan Getting it. Super Moderator Location: Lion City	I can tell you from ground zero that they are laying off and cutting back staff here as well. The banking industry is in a global tailspin and the expat bankers are getting hit the hardest. __________________ "My hands are on fire. Hands are on fire. Ain't got no more time for all you charlatans and liars." - Old Man Luedecke

02-04-2009, 05:16 PM	#2 (permalink)
blktour Psycho Location: Anchorage, AK	If I owned a company and it flopped, it is my fault. why is this different? since it affects more people? I dont get this at all.

02-05-2009, 05:05 AM	#3 (permalink)
ASU2003 immoral minority Location: Back in Ohio	This makes a lot of sense to me. If you run a large company, and you need taxpayer assistance to prevent it from flopping, the executives can't take 10% of the recovery money in salary. $500,000 is still quite a bit, but when one CEO was making $68.5 million before, it is a wake up call that he needs to fix his company and repay the taxpayers.

02-05-2009, 06:59 AM	#5 (permalink)
dippin Crazy, indeed Location: the ether	On a related note, I think that divulging spending on certain superfluous items like companies receiving bail out money will have to should actually be extended to all publicly traded companies. Right now, it is impossible to tell. When companies can order the airbus a380 and remain anonymous, hiding away the expense under some sort of investment, the shareholder's interest is certainly not being served.

02-05-2009, 01:22 PM	#16 (permalink)
KirStang Future Bureaucrat	It's a good idea, so long as it doesn't discourage people from actually wanting those top exec jobs. If I'm a brilliant economist and I could make more than $500,000 in Signapore, i'm totally there.

02-05-2009, 06:35 PM	#21 (permalink)
guyy Addict Location: Cottage Grove, Wisconsin	About time!

02-05-2009, 06:56 PM	#23 (permalink)
ASU2003 immoral minority Location: Back in Ohio	I was for it until I read about the deferred stock options (with no limits that I know of). I would rather get paid in stock options, do I have to pay the 35% tax when I cash those out? If they are long term gains, would it only be 15% tax on the capital gain amount? At least it will give the CEO and other executives an incentive to bring back their companies and work hard to do so.

02-06-2009, 09:01 PM	#27 (permalink)
Paq Junkie Location: South Carolina	haha, personally, i'm all for the 500K cap and anything extra in stock options that won't be exercisable until the federal money is paid off. Make the ceo put his money where his mouth is. As a stock trader/investor, i can say i'd feel MUCH better about putting money in a company if i knew the CEO's only way of making any 'real' money was by making the company profitable again. __________________ Live. Chris

02-07-2009, 04:30 AM	#29 (permalink)
Strange Famous follower of the child's crusade?	I think its a good start. __________________ "Do not tell lies, and do not do what you hate, for all things are plain in the sight of Heaven. For nothing hidden will not become manifest, and nothing covered will remain without being uncovered." The Gospel of Thomas

02-07-2009, 04:40 AM	#30 (permalink)
ottopilot let me be clear Location: Waddy Peytona	Pay limits are fine as long as they are applied to everyone's pay structure when all or partial funds come from the federal government. College/university execs, political organizations, federally funded advocacy groups, lobbyists, federal employees, senators, congressmen, the president, the list goes on and on. This would include all perks and freebies as part of total income. I believe these excesses are irresponsible and should be addressed (like the obscene extravagance of the presidential inauguration during dire economic times). But this is only a drop in the bucket related to the real economic issues we need to address. These are diversions... sort of like all the hubbub about Olympians smoking pot and executive pay caps when a $780-827,000,000,000 government-expansionists wet-dream of a pork-deal is about to be voted in as a "stimulus" package... and most of you (America) and our Senators don't have a clue as to what's in the details. As long as everyone's feeling all hopey-changey, I guess the details don't matter. __________________ "It rubs the lotion on Buffy, Jodi and Mr. French's skin" - Uncle Bill from Buffalo Last edited by ottopilot; 02-07-2009 at 04:42 AM..

02-07-2009, 12:27 PM	#31 (permalink)
FoolThemAll Walking is Still Honest Location: Seattle, WA	As long as they're only applied to companies that receive bailout money, I'm all for it. I see this - without sarcasm - as a case of two wrongs making one right. Not very right, right on a mediocre level actually, but it's going to mitigate the insanity. I guess the democrats are determined to take back the mantle of fiscal liberalism after the GOP stole it. __________________ I wonder if we're stuck in Rome.

02-07-2009, 02:48 PM	#32 (permalink)
ScottKuma Insane Location: Maineville, OH	I'm of two minds on this: 1) How the hell is it the Government's right, even if they DO give money to these companies, to make demands on CEO compensation? Last time I checked, neither the Executive branch nor the Legislative branch aren't given any such powers in the Constitution! Let the marketplace will sort it out. and 2) ALL CEO's compensations should be limited, anyhow. I think that the gap between the normal salary in a company and the CEO's salary has gotten way out of hand. I think that it should be limited to some multiple of the mean salary in the company. The way it exists now, the CEO does a GOOD job by keeping the workers' salaries low, or by shipping jobs overseas, where labor is cheap. By limiting salaries to a multiple of the mean workers' salaries, there is actually an incentive to keep jobs in the US! And then my head explodes from the conflict. __________________ A government big enough to give you everything you want is big enough to take from you everything you have. -Gerald R. Ford GoogleMap Me

02-09-2009, 08:31 AM	#36 (permalink)
roachboy Super Moderator Location: essex ma	gee, ace, that's a one-dimsensional reading of one-dimensional pictures. you could also use them to argue that there's something unhinged about american corporate culture in general, and that the wasj is advocating fraud---which is not recognized as fraud because the corporate culture that it synchs with is itself unhinged (a circle, you see)... __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite

02-09-2009, 09:05 AM	#39 (permalink)
roachboy Super Moderator Location: essex ma	what the wsj is advocating, ace, is fraud. that's the point. the explanation for it is an unhinged corporate culture, one in which all that is important is me me me, what's in my interest, what serves my immediate material requirements. __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite