U.S. Plans to Curb Executive Pay for Bailout Recipients

I wonder what this cap translates like into:

a) lost taxes for NYC;
b) cuts in firefighters;
c) cuts in police officers.

Gonna be a lean year all around....

Yeah I know. I wonder if I might have to get out of Dodge in the near future. Having recently seen Death Wish on AMC doesn't help.

If that's the whole story, it's not a big deal. The "top executives" are a small slice of the total bonus pool. And most of them already own their homes.

Obama has said that he supports this bill, so there is no reason to think that it won't become law.

NYC's revenue base will drop DRASTICALLY. Financial firms will no longer be able to attract top talent since the money will no longer be there. Consequently, cops will get laid off, and violent crime will rise aharply in the next few years. NYC will return to the 1970's and 1980's.

My, my, the troll is hungry tonight.

West81st, it's called basic economics. It's not my fault that you're too dumb to realize how this will damage NYC and lead to higher crime.

Sorry, JA - not taking the bait. Have a good night.

JA, if these a$$%@&*^s are so smart, how come they drove our economy off a cliff? Let 'em have $26,000 a year; sounds about right to me!

I think it depends on how "executives" is defined for purposes of the limit. If the CEO/CFO can't get more than $500k, but midlevel bankers still can, then I agree with West81st that impact will be limited. On the other hand, if $500k becomes a cap on any individual's pay, that's a different story. I guess we'll have to see how the legislation shakes out.

I'm not an Obama supporter by any means, but let's not go crazy before we fully know what this bill exactly entails. If they're placing a cap on base salary at $500K, that's perfectly reasonable, given that these banks are being subsidized by the government. And moreover, it's not so far off from the $600K base that goldman partners were getting. If this bill allows high performers to make a lot more through their bonuses, then I don't have a problem with it. On the other hand, if they want to limit total compensation for every employee at $500K a year, then we are headed towards socialism, and we're in deep trouble.

Re: "On the other hand, if they want to limit total compensation for every employee at $500K a year, then we are headed towards socialism, and we're in deep trouble."

Since w/out government involvement all these employees would be with no job at all it is a very fair proposal.

Boss, you should have marched on DC when gov decided to bail them out. That was the start of the socialism. Now it is just a nice icing on the cake ;) Please, keep in mind that we are talking TARP-recepient caps, not the every-fat-cat cap. Yeeess?

First, the nationalization of the banks is just the first step towards socialism. The next steps are nationalizing other key industries in trouble (autos, insurance, etc.). When the government controls these institutions - they also control terms of credit and compensation.

I also agree that its too soon to tell what this proposal will mean, but let me just do some very rough math. Total comp = $500K - taxes = $300K (or so). Many banks have the policy that comp over a certain level (say $200K) is paid in stock or other securities. At MS, it used to be that 50% over 200K was paid in stock. So, the actual take-home pay for people making $500K is *small*.

"First, the nationalization of the banks is just the first step towards socialism. "

you prefer to let them fail and move on? one thing for sure, not wiping out the common shareholder when bailing out banks is as dumb as it can get. just so that financial illiterate people don't get scared when shareholders frame it in terms of "socialism"?

is redistribution of the losses what you are advocating? that's a type of socialism too.

> I wonder what this cap translates like into:
> a) lost taxes for NYC;
> b) cuts in firefighters;
> c) cuts in police officers.

Yes, but the government then has to spend less on TARP and then gives more money directly to the city... which is already happening.

If you'd rather have $10 billion given to banker bonuses rather than directly to city, then you are an idiot.

People, we are already waist-deep in socialism, in all aspects of our nation. Even before the bailouts, the government incentives, tax breaks, subsidies for so many US businesses make the proud banner of "free market" quite the joke.

just to provide diversity of opinions i'm looking forward for a city that's affordable to live in. many people here believe that the mkt always has it right, that "you get what you pay for". but when it comes to consequences of one of the biggest credit bubbles cost and value are get of wack.

for ex, living next door to over-paid morons that work in wall street don't provide any benefit whatsoever. on the contrary, we have to pay extra for everything as they drive prices up. so, again, looking forward for an affordable nyc. smaller and leaner government does not scare me.

There was a whole documentary on the socialism of corn production recently... I think it won an oscar.

cost and value are "out" of wack

admin: You inferred a view on the government bailout from my comment. I was writing fact, not expressing what I think the government should/ could have done better. I'm just being clear about where we are headed: socialism. Full stop. Not trying to scare anyone, as I always find knowledge is power.

admin: "for ex, living next door to over-paid morons that work in wall street don't provide any benefit whatsoever."

I can dig it, as long as you promise me I won't have to live next door to some moron who splatters paint on a canvas and calls it art and wants gov't handouts because nobody will buy his piece of garbage he calls art. Deal???

Just heard more details. complete smokescreen on the 500k deal...only applies to top 5 executives and can be overridden by shareholders. So top bankers, dealmakers, traders and sales can be comped tens of millions. The wWorld is safe again from this one angle. But still dead because of all the original reasons.