Government Hits Execs at Banks and Auto Companies with Pay Cuts
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As part of its newfound involvement in the auto and bank industries, the government dealt a serious blow to the earnings made by top executives on Thursday.
Kenneth Feinberg, an independent official spearheading the new cutback project, ordered a 25% pay cut for top company executives that include such places as General Motors and Chrysler. Other companies impacted by the reductions include Citigroup and Bank of America.
Although some improvement is to be expected from the resulting changes, some critics suggest that Feinberg is not doing enough with some executives still making large seven-figure salaries. Others believe that Feinberg's efforts are not tackling the big problem.
"We're worried that it's shifting from one form of compensation to another and still letting people get away with some pretty outrageous things," Sarah Anderson of the Institute for Policy Studies tells the Wall Street Journal.
I put out an opinion piece on this (11573 for those interested. I first heard of it while listening to an NPR piece and that is where I heard the figure 90 percent. Actual amount seems to be more like 25 percent but is affected by salary limits, work arounds (stock issuance and options) and other niceties.
I guess this is an attempt for the "salary tzar" to demonstrate that he is doing something to justify his salary. I still think it could act as a very interesting economic experiment on impact of salary limitations to the multi millions that many of these so called golden boys (and girls) claim will lead them to defect to other places of employment. Not the least of questions might be "who will hire a guy who was at the heart of losses leading to near extinction of some of the world's largest companies?"
I absolutely agree that these pay cuts should be implemented for the execs involved in such bailouts. It is ridiculous that thousands of other employees lose their jobs and money, and the top guys are still making money, despite the suffering of the company- in part because of their management and decisions.
I guess this is an attempt for the "salary tzar" to demonstrate that he is doing something to justify his salary. I still think it could act as a very interesting economic experiment on impact of salary limitations to the multi millions that many of these so called golden boys (and girls) claim will lead them to defect to other places of employment. Not the least of questions might be "who will hire a guy who was at the heart of losses leading to near extinction of some of the world's largest companies?"