U.S. plan caps Executive pay at $500,000
WASHINGTON — The Obama administration is expected to impose a cap of $500,000 for top executives at companies that receive large amounts of bailout money, according to people familiar with the plan.
Executives would also be prohibited from receiving any bonuses above their base pay, except for normal stock dividends.
President Obama and Treasury Secretary Timothy F. Geithner plan to announce the executive compensation plan on Wednesday morning at the White House.
The new rules would be far tougher than any restrictions imposed during the Bush administration, and they could force executives to accept deep reductions in their current pay. They come amid rising public fury about huge pay packages for executives at financial companies being propped up by federal tax dollars.
because as Peggy Noonan on Msnbc said this morning, it will give them a powerful incentive not to take the money and to make it in a free market. If their companies really have no other choice then they will still access federal funds, but it is good to have the decision makers with a personal stake; in this case to avoid federal rules.
We often discourage profit motive and greed as being bad. It is dangerous when left unchecked by morality and government, but within our system it is what has made this the great country we are.
Good move by the President.
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