Treasury Secretary Paulson Caves On CEO Pay Limitations

New York Times:

Meanwhile, Treasury Secretary Henry M. Paulson Jr. had agreed to demands from lawmakers in both parties to limit the pay of executives whose companies benefit from the bailout. The enormous pay packages of some Wall Street executives, coupled with the realization among nonwealthy Americans that the crisis could affect their financial foundations, have created an incendiary issue on Capitol Hill.

"The American people are angry about executive compensation, and rightfully so," Mr. Paulson told the House Financial Services Committee. "Many of you cite this as a serious problem, and I agree. We must find a way to address this in legislation without undermining the effectiveness of the program."

The continuing crisis, already a huge issue in the presidential election campaign, had a more direct effect on Wednesday afternoon, as Senator John McCain, the Republican nominee, announced that he was temporarily suspending his campaign and returning to Washington to deal with the crisis. He also asked Senator Barack Obama, his Democratic opponent, to agree to postpone their first debate, scheduled for Friday night. But Mr. Obama was inclined to go ahead with the debate, his aides said, and was planning to explain his stance late Friday afternoon.

Read the whole story: New York Times

Comments

[ajax2]

12:22 PM on 09/26/2008

There is nothing for Paulson to cave on. If you are a horse trader you just got a bag of bones. Paulson wouldn't and couldn't enforce executive pay limits.

[ugmold]

11:05 AM on 09/26/2008

This guy is about as good for America as Fox News.

[wordvarc]

07:12 PM on 09/25/2008

The executive pay issue is symbolic but a diversion. Truth is, we're in great dept, having to buy resources to stay alive, and our 'good will' is exhausted. We're sliding into a second or third tier country.

'Credit' is 'goodwill' with a dollar sign. We've exhausted ours over the past twenty-five years with this 'trickle down,' smoke and mirrors economy.

We're 'bailing out' our financial industry which 'produces' only paper wealth. We should be bailing out our manufacturing industries, investing in infrastructure, and working out the housing crisis mortgage by mortgage. Flushing Bernacke's "plumbing" (as he describes as our financial system) fixes nothing.

Other than starting an unjust "pre-emptive" multi-trillion dollar war based on lies this is the greatest taxpayer ripoff in history.

[WolfLarsen]

02:20 PM on 09/25/2008

I love it how conservatives firmly believe a teacher's pay should be based on performance but when it comes to one of their thieving amigos they think that the sky should be the limit.

The only salaries they are interested in restricting are the people making minimum wage.

[wordvarc]

07:25 PM on 09/25/2008

That's 'trickledown' the way the neocons think..."Give me everything; I'll give you the scraps."

Neocons place 'finance' (paper wealth) above democracy, freedom, justice, manufacturing, health care, foreign relations, and common sense.

McCain was in a similar mess before with Keating but only slapped in the hand. We are all complicit for turning our heads and/or following their lead for the last 25 years.

I like Kevin Phillips, the former Republican strategist on this issue:

http://www.pbs.org/moyers/journal/09192008/watch2.html.

[realityczech4u]

02:09 PM on 09/25/2008

Once this hurdle is behind us, executive compensation needs a thorough review. It is outrageous that anyone receives eight and nine figures as compensation for doing a job. Yes, compensation should be partially incentive-based, but within reasonable limits. In my mind, NOBODY, is worth more than a few million dollars in a year at the high end, no matter what they do. Not unless they have their own capital and future livelyhood entirely at risk. If they are betting their own money, as entrepreneurs on their ideas and skills then the benefits are unlimited. Otherwise, if they are just the hired help, shareholders need to put a stop to this. These guys have set up a sort of union of their own, whereby they have been feathering one anothers' nests by setting the "going rate" for their their talents at these outrageous levels. We need to bring them back down to earth. The tax code can be used to address this as well.

[BPCentrisAmerican]

12:28 PM on 09/25/2008

Why is Paulson in a position to debate anything? In China they would have taken him out back hung him. I guess he’s planning on returning to Sacks after Treasury, at least his stock will be charged up. Bonuses and stock options were created to enhance performance and business growth. Is there a shortage of incompetent, greedy CEOs in this country, NO?

[HatingTheGame]

11:54 AM on 09/25/2008

It strikes me as odd that when we have the biggest threat to our national security these guys still want fat pay checks. What about patriotism? Why is it that when we want poor white, brown, and yellow folk to go put their lives on the line to go kill other brown people that they need to be patriotic and do their duty for their country, and then when we need "talented" execs to rescue America that they need to be paid a lot of money to do so.

Why aren't they being asked to be patriotic?

Plus, what else are these guys gonna do if they don't do this? Its not like they can go do something else to make all their money. This is the only game in town. If this doesn't work, then they're all in the sh*t can. They either step up and do their duty, or they're all screwed.

Come on fat cats, where is your patriotism when your country needs you?

Oh I forget, patriotism is only for flag waving suckers. You guys are beyond that.

My solution: those execs that don't step up and do their patriotic duty should be declared enemy combatants, sent to gitmo, and have electric batons shoved up their collective arses, no due process, solitary confinement for years, and their Amex Gold cards confiscated.

That'll shut them up.

Sheesh.

[gadfly55]

11:49 AM on 09/25/2008

Germany blamed the Anglo-Saxon capitalist model today for spawning the global financial crisis, saying the United States would lose its financial superpower status and will now have to accept greater market regulation.

German Finance Minister Peer Steinbrueck told the German parliament
"The world will never be as it was before the crisis,"

"The United States will lose its superpower status in the world financial system. The world financial system will become more multi-polar."

Steinbrueck lay the blame for the crisis squarely on the United States and what he called an Anglo-Saxon drive for double-digit profits and massive bonuses for bankers and company executives.

"Investment bankers and politicians in New York, Washington and London were not willing to give these up," he said. "Wall Street will never be what it was."

.



T
He said the crisis showed the need for a greater state role in setting the rules for markets and called the turmoil primarily an American problem.

"The financial crisis is above all an American problem. The other G7 financial ministers in continental Europe share this opinion," he said.

"This system, which is to a large degree insufficiently regulated, is now collapsing - with far-reaching consequences for the US financial market and considerable contagion effects for the rest of the world," Steinbrueck added.

sourced from Reuters

[chappelforpres]

05:16 PM on 09/25/2008

Right on the money. Unfortunately, the Reptilians have cut education to spend on weapons systems and many Americans cannot read. If they can, most are unable to decipher a majority of the words she is using.

[vippy]

10:08 AM on 09/26/2008

Right, no money, no influence, no attention, nothing. A third world nation!

[dgscol]

11:08 AM on 09/25/2008

This is a red herring. they are trying to deflect public outrage onto these severance packages.

They do not get it. We do not want this culture of greed back : they have engaged in the dumbest practices imaginable and have proven themselves to be entirely irresponsible. DISSOLVE these companies.

There are plenty of responsible bankers who can pick up the credit markets and run them properly, who will request regulation, and follow it even if it is not adopted.

[tedling12]

11:07 AM on 09/25/2008

Secretary Paulson should be fired. He did not see this disaster coming and now he wants to dictate the remedy?

[tedling12]

11:01 AM on 09/25/2008

Secretary Paulson should be fired. The man failed to see this disaster coming and now he's going to recommend the remedy?

[dgscol]

10:59 AM on 09/25/2008

The issue of severance packages, etc. is just a red herring. It is to ameliorate the outrage of people, while they pass the bailout anyway. The real issues are obtaining documentation for evaluation of these banks, assessing problems, and charging criminals. Then sensibly dissolving these companies.

These politicians do not get it. We do not want these guys back. What they have done is outragous, sophomoric, and entirely irresponsible.

[sf94127]

10:57 AM on 09/25/2008

Exec pay..............what a non-issue. All these guys are so rich with previous comp they would gladly work for $1 year until the crisis is over. >90% of these guys have been paid a million times over already. This is all posturing, misdirection.

[DayoftheLiberal]

10:37 AM on 09/25/2008

Can someone remind me, just one more time, what it is we are trying to salvage? And where are all the big-brained big-money boys complaining about socialism?

We should let Wall Street burn, then start over.

[vippy]

10:10 AM on 09/26/2008

I, too, would like to know what exactly this bailout package would include. Just wall street, then
that would not benefit us, the majority of the people. Being a player in the stock market
requires money and as we know, the Hedge Funds were set up requiring one million just to
enter the market. Now let them eat it.

[ajax2]

09:57 AM on 09/25/2008

Why shouldn't he cave. He has no intention of enforcing it, and probably can't.