Our President Barack Obama today said that top executives at companies receiving financial assistance from the tax-payers cannot be paid more than $500,000 per annum.
A long overdue reform, if you ask us.
Folks, it’s the greedy and incompetent executives of Wall Street that have brought the country to its knees.
And these greedy and incompetent fellas are being paid richly for their failures.
Financial institutions that have received tax-payer assistance under the U.S. Government’s TARP initiative include Citigroup (headed by Vikram Pandit), Bank of America, Goldman Sachs, AIG, JP Morgan Chase, WellsFargo and Morgan Stanley.
Here’s an excerpt from Obama’s address at the White House today:
We all need to take responsibility. And this includes executives at major financial firms who turned to the American people, hat in hand, when they were in trouble, even as they paid themselves customary lavish bonuses. As I said last week, this is the height of irresponsibility. It’s shameful. And that’s exactly the kind of disregard of 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.
….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 bad strategy — and I will not tolerate it as President. 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.
As part of the reforms we’re announcing today, top executives at firms receiving extraordinary help from U.S. taxpayers will have their compensation capped at $500,000 — a fraction of the salaries that have been reported recently. And if these executives receive any additional compensation, it will come in the form of stock that can’t be paid up until taxpayers are paid back for their assistance.
Companies receiving federal aid are going to have to disclose publicly all the perks and luxuries bestowed upon senior executives, and provide an explanation to the taxpayers and to shareholders as to why these expenses are justified. And we’re putting a stop to these kinds of massive severance packages we’ve all read about with disgust; we’re taking the air out of golden parachutes.