Click here to subscribe today or Login.
PRESIDENT BARACK Obama might have had a tough time selling his stimulus package to Republicans, but there seems to be common agreement on another issue: limits on executive compensation for companies receiving federal bailouts.
Obama earlier this month condemned the “irresponsibility” of those who received payouts even as their businesses sought a handout. Rep. John Boehner of Ohio, the Republican minority leader, had to agree that in such cases, “Executive pay caps are appropriate.”
As President Obama noted, Americans do not begrudge success and the rewards that come with it, but they get upset when they see executives being rewarded for failure. With taxpayer money, to boot.
A study by a compensation research firm called Equilar reported that the CEOs of the 10 largest financial services in a survey of 200 companies with revenue of at least $6.5 billion received $320 million in 2008 – even though the companies had mortgage-related losses of $55 billion.
Not all of them are lining up for a bailout. But companies handing out money to executives despite the huge losses they incurred are engaging in irresponsible and reckless behavior that has brought the economy to the brink of collapse.
Most Americans understand that demanding compensation caps is not, as some critics of Obama would have it, about government meddling in the private sector. It is about the government, at long last, saying no to those with power and privilege who want to sustain their status at the expense of others.