McCain: Limit CEO Pay To $400K In Exchange For Bailout
By Justin Gardner | Related entries in 2008 Election, McCain, Money
An intriguing idea floated by the Arizona senator, but would it actually hurt the recovery?
Sen. John McCain (R-Ariz.) said Sunday that bank executives who take the mortgage bailout should have an annual salary limit of $400,000, a substantial pay cut that could dramatically reduce participation in the program. [...]“I notice at Lehman … some $2.5 billion in compensation,” McCain said. “If they’re bankrupt, where did they get that? But the major point is that no CEO of any corporation or business that is bailed out by us, that is rescued by American tax dollars, should receive any more than the highest paid person in the federal government.”
The highest paid person in the government is the president, who makes $400,000 a year, just under twice as much as the House Speaker and the Chief Justice.
Who knew McCain was such a statist!
And do note that I like the idea, but will the CEOs bite? I mean, I have my doubts that Bush would ever okay something like this, so it may be nothing more than a populist stunt. Still, I think this will play well with those swing voters who’re infuriated that CEOs get paid massive amounts for running our country’s financial infrastructure into the ditch.
This entry was posted on Sunday, September 21st, 2008 and is filed under 2008 Election, McCain, Money. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
September 21st, 2008 at 7:58 pm
they have no leverage. they take what they get. Lets see McCain actually work for this behind the scenes before he gets credit for it. he is in a position to affect the outcome so we should see if he does. Same for Obama, lets see what he does with his position in the senate before he gets credit.
September 21st, 2008 at 8:25 pm
I think if it was a choice between going bankrupt or taking the deal, the boards would have to accept the deal. If the CEO balked, he could be tossed out.
My mantra is government pay for government money.
September 21st, 2008 at 9:43 pm
Limit CEO pay to $400,000 for running their enterprises into the ground? What, pray tell, did they do to deserve $400,000?
This is a joke, right?
I know people who have been fired for poor performance in sales when they don’t bring in twice what they are paid and these guys have killed their companies and cost their employees jobs, their investors their savings and the taxpayers debt.
And you want to limit them to $400,000? These guys should be out on the street with a tin can selling pencils for 3 cents a piece. Gimme a break, John.
Oh, you are being such a tough guy.
September 22nd, 2008 at 7:43 am
Didn’t the Democrats propose limiting CEO pay the day before?
How many times is McCain going to appropriate his opponent’s ideas? Maybe he should just go out and campaign for Obama.
September 22nd, 2008 at 8:46 am
Granted, I’m far from being a fan of any of the “deep-end” blogs or sites, such as Daily Kos, Powerline, Democratic Underground, or “FreeperLand”… but this post over at Daily Kos has one idea that I particularly love, and it’s a whole lot more equitable than McCain’s $400,000 plan:
“Set a maximum cap on CEO pay at 30 times the base worker salary – if the company outsources American jobs to be done as slave labor in developing countries for pennies an hour, then the CEO is capped at 30 times that pennies-per-hour rate.”
Love it!
Agnostick
agnostick@excite.com
http://marciaford.blogspot.com
September 22nd, 2008 at 7:54 pm
$2.5 Billion In Bonuses…
Really? I wonder how many people thats spread around to?
McCain wants to throttle the amount the robber barons make off with as we the taxpayer bend over and state, “thank you sir, may I have another.”
The amount he’s settled on is…
September 22nd, 2008 at 11:18 pm
Certainly there is a high degree of populism to such a proposal, and in the movie or book version would be applauded by the audience. But this is neither likely to get implemented nor, frankly, particularly sensible. In addition, as a strictly technical matter, financial sector executives typically have relatively low salaries – e.g. $200K per annum – and rather significant bonsues. Thus the key item to focus on, were such a proposal to be pursued, is total compensation, rather than salary.
September 24th, 2008 at 7:58 am
Dem-Soc, It is for 10,000 people. In reality much of it will paid in severance to many US employees including admins and other low level and back office people. There are 200 A-listers and a handful of very key people who will be employed by Barclay’s. The top four people hired are Wall Street all-stars who will (have already been signed by Barclay’s) receive guarantees of between 10 and 25MM a year for a year (maybe two). I know that it sounds crazy. This is the going rate. Even if it weren’t Barclay’s doing the hiring, with Lehman money, they would be paid this by someone else. These people are famous in this industry. The money that the judge let Lehman keep was to pay their employees. This money was taken out monthly based on a projection it costs to pay people bonuses. On Wall Street many people get paid once a year. There are people who have worked for 10 months and have not yet been paid. They have very low salaries and basically are compensated in at year end.
Not every person deserves to be punished.
As far as CEO’s working for 400K which is what a junior trader makes, it will not happen. Why would it? If you had the talent to go to a bank not receiving bailout money why wouldn’t you? These people get paid in the multiple 10’s of millions a year. I don’t know if the cap would include compensation in the form of stock or if it only applies to cash. If it does not restrict stock compensation maybe someone would bite.
The part that people are missing is that this kind of cap would create a situation where the least talented people would be trying to lead the banks out of their trouble. That’s just stupid.
GerryF- It’s not as if every person at these banks had a money losing business. There were many people at Lehman who were very successful at their work. They were number one in many kinds of trading. Imagine that you work for a company that sells all kinds of things and although you are making money in your department, another department loses so much that your company must declare bankruptcy. It’s the same thing. The people who are being cherry-picked are the people who ran the best (departments) desks on Wall Street. No one wants the people who lost tons of money.
p.s. I do not work in finance.
February 9th, 2009 at 7:34 pm
I think it was a right decision to limit CEO salaries at 500K for the companies that are getting taxpayer money. In general I strongly disagree with government intervention in private business matters, but since these companies are utilizing my money and your money and the money that belongs to all Americans, we have the right to limit their payroll, especially after the embarrassing facts of CEOs using bailout money for lavish parties, private jets and unreasonable bonuses. Once they pay us back the money owed, they can have all the bonuses and salaries they want.