Les passes on some of the pissing and moaning from executives about the Obama-proposed $500,000/yr cap on executive salaries for companies that accept TARP money.
As news of the plan leaked last night, wealthy Wall Street went into panic mode, insisting that the caps would ruin the financial industry. It’s “a nightmare for any financial institution,” CNBC host Joe Kernen proclaimed this morning, while Fox Business host Alexis Glick said it was evidence of Obama being “a little anti-business.” Others insisted that the “draconian” caps would drive the “best and the brightest” away from Wall Street and that Obama’s anger over executive bonuses was misplaced:
“That is pretty draconian — $500,000 is not a lot of money, particularly if there is no bonus.” [James F. Reda, founder and managing director of James F. Reda & Associates]
“If I didn’t pay [bonuses], the people were going to go. … These people didn’t choose to cure cancer. These people didn’t choose to do public service work…These people chose to make money.” [Jack Welch, former CEO of General Electric]
“The consequences of it are going to be a massive brain drain of senior talent from those companies that have taken TARP money to those companies that have not.” [Donald Straszheim, managing principal at Straszheim Global Advisor]
“Companies that need the most talented people to fix their problems won’t be able to pay them.” [Jamie Dimon, JPMorgan Chase & Co. Chief Executive Officer]
Since the yahoos in place are the ones who are getting these salaries and have driven companies to the point of needing TARP money, it doesn’t seem that they are either the “best and brightest” or the “most talented people to fix their problems.”
And if that means a “brain drain,” not only are those the brains that need to be drained, but it sounds like a fabulous opportunity for some hungry up-and-comers to prove how they can turn major companies around, even on the starvation diet of $500K.
I mean, they can’t do worse than the Gang of Idiots already there, can they?
Now, if you really want to liven things up, then sweeten the pot — cap it at $500K for N years after receiving federal bail-out money — with some outrageous bonus to be paid at that time. If the company is still in business, that is. Of course, some Boards may cheap out and try to fire the bum before he can get his bonus, but if s/he’s actually keeping the company afloat and prosperous, then they’d be idiots to do so.
Meantime — welcome the six figure salary, guys. You’ll still be making thirty times what a minimum wage worker does. And just think of how much you’ll save on taxes!