Obama administration slash CEO pay by 90%.

[Jacobtm]

"The Obama administration stunned Wall Street on Wednesday by ordering massive pay cuts for top executives at seven financial firms that still hold billions in U.S. government bailout funds...

At the seven firms, total average compensation for many executives would be cut in half, according to an administration official. At AIG, no top executive will receive more than $200,000 in total compensation – a humbling comedown for the once high flying insurance executives at the firm.

Along with AIG, the firm affected are Citigroup, Bank of America, General Motors, Chrysler and the financing arms of the two automakers, GMAC Financial Services and Chrysler Financial."

http://www.politico.com/news/stories/1009/28569.html

I hope no one disagrees with this move.

[Marokai Backbeat]

This should've been done right away, but is no less welcome.

[Scam of God]

If they hold government securities, they are beholden to government rules. This ought to serve as a warning to private business before it again gets into the business of entangling itself with the State.

Is it a dick move, against everything I believe in? Yes. Are those CEOs themselves dicks and also against everything I believe in? Most certainly.

[Lunar]

isn't it sketchy for Politico to openly use the word "pay czar" without quotation marks or context for the term whatsoever?

"And the plan by pay czar Kenneth Feinberg comes in a week in which the White House has been increasingly aggressive in calling on Wall Street to stand down in its opposition to its regulatory reform proposal for the financial industry"

three paragraphs in...I mean, that's not his actual title, right?  That'd be like using the word "Governator" to describe Arnold in a serious, headline story without any introduction.

[Lief 🗽]

This is good news.

[○∙◄☻¥tπ[╪AV┼cVê└]

But guys, capitalism is all about having the taxpayer reward those who have earned their high pay by having serious connections.

[paul718]

Is this the wisest move by Obama?  Doesn't he want the best and brightest running these firms in which the federal goverment has so much invested?  This is certainly an "executive"-type move, so I guess we'll see how good of an executive our President really is.

[Scam of God]

Is this the wisest move by Obama?  Doesn't he want the best and brightest running these firms in which the federal goverment has so much invested?  This is certainly an "executive"-type move, so I guess we'll see how good of an executive our President really is.

Why? Shouldn't those businesses which want to act in a corporatist fashion be subject to corporatist controls? Should we really permit private industry to have an even louder voice in a State which is already too much in their service?

[paul718]

Is this the wisest move by Obama?  Doesn't he want the best and brightest running these firms in which the federal goverment has so much invested?  This is certainly an "executive"-type move, so I guess we'll see how good of an executive our President really is.

Why? Shouldn't those businesses which want to act in a corporatist fashion be subject to corporatist controls? Should we really permit private industry to have an even louder voice in a State which is already too much in their service?

If the purpose of government intervention was to "prop up" these businesses and float them through the current crisis, cutting executive pay seems counter-productive.

[Scam of God]

Is this the wisest move by Obama?  Doesn't he want the best and brightest running these firms in which the federal goverment has so much invested?  This is certainly an "executive"-type move, so I guess we'll see how good of an executive our President really is.

Why? Shouldn't those businesses which want to act in a corporatist fashion be subject to corporatist controls? Should we really permit private industry to have an even louder voice in a State which is already too much in their service?

If the purpose of government intervention was to "prop up" these businesses and float them through the current crisis, cutting executive pay seems counter-productive.

And I absolutely agree with you. Don't expect me to sympathize with these CEO cocksuckers, however; theirs was a gambit to exert their largesse over the State in a fashion that Mussolini would have embraced with open arms, and it failed. I smile every time that government and industry mutually discredits one another.

[War on Want]

It's about time he did this...

[Torie]

Pay should be cut (well restructured so as not to incentivize imprudent risk taking) for moral hazard reasons, and that alone. However, the US essentially "owns" some of these failed entities, and as an owner, well, owner's make the calls.  In any event, this is one issue I am not worried about. Some folks are in fact grossly overpaid, due to somnolent and themselves overpaid boards of directors. We need to tighten up what the legal definition of "breach of fiduciary duty" really means. Many of these folks seem to avoid fitting into that definition, when I consider their actions myself to fit withing the definition of being pecuniary hogs, who unlike pigs, deserve to be slaughtered.  But absent the government owning the businesses, or the moral hazard issue, government should spend more time cleaning its own house, which is itself an Augean stable.

[paul718]

Is this the wisest move by Obama?  Doesn't he want the best and brightest running these firms in which the federal goverment has so much invested?  This is certainly an "executive"-type move, so I guess we'll see how good of an executive our President really is.

Why? Shouldn't those businesses which want to act in a corporatist fashion be subject to corporatist controls? Should we really permit private industry to have an even louder voice in a State which is already too much in their service?

If the purpose of government intervention was to "prop up" these businesses and float them through the current crisis, cutting executive pay seems counter-productive.

And I absolutely agree with you. Don't expect me to sympathize with these CEO cocksuckers, however; theirs was a gambit to exert their largesse over the State in a fashion that Mussolini would have embraced with open arms, and it failed. I smile every time that government and industry mutually discredits one another.

I see no reason to feel concerned for the CEOs.  They'll have little trouble finding more gainful employment.  I am concerned, however, for the employees and shareholders.

[Jacobtm]

\

I see no reason to feel concerned for the CEOs.  They'll have little trouble finding more gainful employment.  I am concerned, however, for the employees and shareholders.

At least you can view it as a lesson; if the pay cuts really do scare away the good talent, and these firms keep sinking lower and lower, it'll be a perfect example of why high executive pay is actually justifiable. Also would be a perfect example of why the government ISN'T the best organization to run banks/insurance companies.

And honestly, the shareholders and employees for all these companies ought to have been screwed a long time ago, at least this way they're able to assess the situation and try to jump ship.

[Sbane]

Uh I don't think this is the smartest move, although it does "feel right". But of course people on Wall Street in general get paid way too much. 200k for a CEO isn't that much though. Should be about 400k salary with a huge bonus that comes only after good results. And no contractually obligated low end bonus. That doesn't make sense.

[Stampever]

Uh I don't think this is the smartest move, although it does "feel right". But of course people on Wall Street in general get paid way too much. 200k for a CEO isn't that much though. Should be about 400k salary with a huge bonus that comes only after good results. And no contractually obligated low end bonus. That doesn't make sense.

Also, I think Congress should have their pay slashed 90% for not doing their job and keeping an eye on how these companies were creating a situation for their collapse to begin with.  I say they are just as guilty.

[Grumpier Than Uncle Joe]

Purely political...not even a bandaid on a scrape......but like Einzige noted, when you're beholden to the government, expect this.

[Lunar]

Uh I don't think this is the smartest move, although it does "feel right".

That's what Levi said to Bristol HEYOHHHHHHHHHHHHHHHH!

[Stampever]

Uh I don't think this is the smartest move, although it does "feel right".

That's what Levi said to Bristol HEYOHHHHHHHHHHHHHHHH!

LOL!

[I spent the winter writing songs about getting better]

Awesome.

[Sbane]

Uh I don't think this is the smartest move, although it does "feel right". But of course people on Wall Street in general get paid way too much. 200k for a CEO isn't that much though. Should be about 400k salary with a huge bonus that comes only after good results. And no contractually obligated low end bonus. That doesn't make sense.

Also, I think Congress should have their pay slashed 90% for not doing their job and keeping an eye on how these companies were creating a situation for their collapse to begin with.  I say they are just as guilty.

Another "feel good" measure. I agree with it though.

[Obnoxiously Slutty Girly Girl]

And those crazy conspiracy theorists call Obama's economic policies "fascist." It's clear they don't know the meaning of the word; this is the free market at work, right?

[Lief 🗽]

And those crazy conspiracy theorists call Obama's economic policies "fascist." It's clear they don't know the meaning of the word; this is the free market at work, right?

It's clear that you don't know the meaning of the word, at least.

[opebo]

Pay should be cut for all in the class in question by very high tax rates rather than 'limits on compensation', though certainly it behooves us to nationalized the entities mentioned and hire people to run them for the reasonable rate of a couple hundred grand per annum.  (the little secret is that anyone could do it).

[Ban my account ffs!]

This is a feel good measure, but I think it was appropriate in this situation.  If these companies are that opposed to reigning in their executive pay, they could easily go without public funds and face the pressures of the market.

Of course with AIG it's tough.  Their collapse would do untold damage... but it's only fair that all bailout companies are treated equally in this case.

I think it's high time we introduced a bill pegging the top pay of employees to the lowest pay scale within that company.  If you wanna pay your top exec $70 million in one year, then you shouldn't have a problem paying your lowliest mailroom employees a few million a year.

Especially considering the lack of loyalty and experience within the company among top execs and lack of real talent.