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Should the Government Limit Executive Pay?

Executives might think twice before asking the government to bail them out — the Obama administration is set to announce new rules that will limit executive pay for companies receiving "exceptional assistance" from a bailout. The restrictions will most likely prohibit severance payments to a corporation's top-55 executives, and also cut bonus pools by 40 percent from the 2007 level.

In reaction to news that Bank of America spent $10 million on its NFL sponsorship and that Wall Street gave itself $18.4 billion in bonuses last year, many of you said that the government shouldn't give these corporations a blank check and then complain about how they use the money.

Do you think limiting executive pay is a smart way to make sure taxpayer money is spent responsibly?

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nylorac nylorac 8 years
... just another reason not to pay taxes.
geebers geebers 8 years
I agree with Steph- we want restrictions on welfare because it is tax-payer money yet feel it is unfair for businesses that took the bail-out money? No way -you take government money you better deal with the consequences.
PinkNC PinkNC 8 years
I really feel for all those poor people that are struggling. The ones that don't know how long they'll be in their homes, and worried as hell about where they can go with their children. And for older people that have been paying for their homes for years and just now are running into finance troubles are the worse as well. And of course they're worried about job loss and cut paychecks too. Americans are far past simple worry these days. These executives need to feel more than just ashamed for spending money the wrong way.
PinkNC PinkNC 8 years
After these companies begged for money and then spent 10 million on a new jet, and 18.4 BILLION for their executives to have personal bonuses, then yes, I can absolutely see where Barack is coming from. . Something has to be put into place so that the government can see where the money is going, or at least make sure that it's not going towards unneeded bonues for executives that already live pretty wealthy. . Don't ask for bailout money in the high millions knowing you just want to get another added personal payday and a luxury business jet for your company. The American people don't have time for that kind of ignorant money spending.
fcseamstress fcseamstress 8 years
My favorite thing I've heard being tossed around with all this is allowing people in bad mortgages to refinance at a fixed 4-5%, thereby saving the average homeowner $400/month and allowing them to stay in their home. Home prices would stabilize because you wouldn't have 6 houses on the same block foreclosed on (that's seriously what's happened on my parents 12 house street), homeowners would be spending more because their mortgages would be lower and it would generally stabilize the backbone of our economy, the working class. Cutting payroll taxes needs to be a part of this too. Yeah, less $ would go to SS if we did this, but most people aren't relying on it for retirement anyway (and if you are you're crazy or retiring soon). But it would give workers AND employers more $ in their pockets. We could nearly halve the payroll tax and still pay for Medicare and other basic social services, and for someone with a $30,000 income it would give you an extra $3,000 or more. I think I've been paying too much attention to financial stuff...
fcseamstress fcseamstress 8 years
outtajo is right, the bonus stipulation only applies to the second half of the bailout money getting ready to be spent; it is not retroactive. And thumbs up Stephly, if we can put restrictions on 'poor people' welfare, why shouldn't we on 'rich people' welfare? Yeah, I don't like corporate bailouts (especially since my grandchildren will be paying them off), but I don't like the idea of the whole economy collapsing either. What really gets me is the fact that taking away corporate bonuses, jets, etc. will only solve about 1% of the problem. The real problem (with banks) is how they've been lending, where they've been investing and how they've been collecting on debt. So generally how they've been running their business in general. And IMHO, someone running a company so badly it's on life support doesn't deserve a million dollar bonus or severence anyway.
Jazz-Z Jazz-Z 8 years
I think it is a good if the President is successful in implementing rules for buyouts ~ being that companies who accept them are crying they are on a sinking ship and threatening to take the economy with them ~ because apparently as soon as the big wad is delivered they go out and buy a new jet or give out $18.4 billion in bonuses ~ which makes their dire need a little hard to swallow; however, as much as I would like it I don't think these "rules" should be retroactive. I think it might have been better spent in some cases giving the tax payers a buyout to stimulate the economy.
0fashionqueen 0fashionqueen 8 years
I am so against the government aiding executives looking to be bailed out of their taught situations, but it is not the problem of the government to help those executives with all of their problems, but I am against businesses going out of business without the fact that government should help in many different ways. However, I think that the government should limit the help that they are giving these executives.
liliblu liliblu 8 years
"If we can put restrictions on welfare recipients, we can certainly restrict corporate welfare recipients." :highfive:
kscincotta kscincotta 8 years
Well said, outtajo. I found the whole discussion about releasing the second half of the TARP funds to be really interesting. Almost everyone was complaining that we spent the $700 billion recklessly and without any oversight. In actuality, if there had to be a second vote to release the second half of the funds, then it means that there was a review and oversight built into the plan. And after reviewing the results of the first $350 billion, there are new regulations like these being put in place to make sure that the bailout money is being used appropriately. Maybe the TARP money should have been released in more than two chunks, but all in all, this sounds pretty okay to me. And Steph's right, if we can put restrictions on individual welfare recipients, then we can put restrictions on corporate welfare recipients.
Nina_79 Nina_79 8 years
No, but taxes for the rich should to up substantilly. This way everyone can profit from it.
genesisrocks genesisrocks 8 years
If they're in such a crisis then they can give up their 18 million dollar raise or whatever it is.
stephley stephley 8 years
Whether the government should have given the companies money is moot - it's out there, they took the help. These CEOs don't give away anything for nothing in their business dealings and neither should taxpayers. If we can put restrictions on welfare recipients, we can certainly restrict corporate welfare recipients.
SillyGirl SillyGirl 8 years
While I am against any sort of salary caps, the businesses are getting what they asked for. They should have refused the bailout money (besides the fact that it shouldn't have been offered in the first place). There aint no such thing as a free lunch. You take govt money, expect there to be strings. Dont ever borrow money from someone that is allowed to change the rules midgame.
Pegona Pegona 8 years
YES, there's should be executive pay limits, and not just for companies receiving bailout money. 100% taxation for all income over $3M/year. (Yes, that three million is a very exorbitant number, I agree, it should be much lower, but I'm thinking politically...)
wren1 wren1 8 years
I think definitely if they took the bailout they should have to be restricted. They begged to be put in the government's pocket.
bastylefilegirl bastylefilegirl 8 years
No, because the business are private. With one exception if the business took "bailout" money the government has an obligation to the lenders i.e. tax payers/us to make sure the money is being spent wisely and someone who can't run a business (i.e. or they wouldn't be in this mess) should be having there salary lowered, receive no bonuses, and at the least take a pay cut!
outtajo outtajo 8 years
Michelin - I'm pretty sure these restrictions are being imposed for the NEXT round of TARP funds. What's been given out already is pretty much a lost cause. The decision with the one company to not go through with the new corporate jet last week wasn't forced on them legally - they (smartly) made the decision due to the harsh public shaming and backlash that resulted from the info getting out. And to answer the initial question - I absolutely think there should be conditions attached to any and all future federal bailout money. If you don't want the conditions, don't take the money. Oh, what? You've run your company into the ground and are on the verge of losing everything? Well, then, I guess you've got a tough decision to make. Let mommy and daddy bail you out and take your punishment - or bug off and let your "free market" ideals run their course - and you out of a job.
UnDave35 UnDave35 8 years
My only concern is that we get the money back that was loaned. If they can rationalize their expneditures, and still be able to pay the US Government back, then I don't have a problem with the bonuses. If they can't, then the government should be able to come in and fire the executives.
mydiadem mydiadem 8 years
Corporations were forced to take bailout money? Many banks refused to take government money, many other corporations that took the funds lobbied on Washington saying they would collapse without the funds. And its their CEOs and executives that did this lobbying, if they had any respect for the American people they would voluntarily reduce their pay and bonuses. Its sad this is something that is now even being discussed. And I'm not for the oh well, we shouldn't have done it in the first place argument. It's done but not set in stone, so why can't we try to fix the lack of oversight now before more funds are doled out?
hypnoticmix hypnoticmix 8 years
Well it's not just about limiting what they can do with our money. It's the behavior that needs to be corrected because even if their throwing away their own money the mind set of reckless finance is going to mean that our money went to a bad investment and really isn't going to help much of anything.
Symphonee Symphonee 8 years
My bills are screaming yeah cap those suckers but the logical side of me is seeing that this is not a good idea. These rules were not in place when the money was accepted and it is not fair that the government can impose rules that affects anyone's paycheck after the ink has dried. It just seems like a slippery slope.
Roarman Roarman 8 years
I agree that it was short sighted to not put restrictions on the funds from the first bail out. But maybe the lawmakers thought that these executives wouldn't be irresponsible and greedy with the money that the tax payers gave them. I think it is Obama's intention to put the restrictions in the bill up front so it is clear what kind of stipulatins come with the money. I also agree that we, the tax payers, should have never had our money used to bail out failing corporations.
organicsugr organicsugr 8 years
I'm excited to see the rank and file come up with explanations as to why nationalizing the banks and dictating their payroll while floating them is not socialism.
Who needs lobbyists when your administration can climb directly into bed with corporations?
Michelann Michelann 8 years
I also don't like the idea that these restrictions will be placed on the money after the fact. these companies accepted bail out money (although I'm not sure how much say they really had in it) before rules like salary caps were in place. To come in afterward and say "Now that you took it, we want to add these rules" seems completely outrageous. The bail out was a horrible idea to begin with, but the law-makers didn't even bother to put any of these restrictions into the law before they passed it? How short-sighted.
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