Apparently $400,000 is not enough!
According to the LA Times:
Provisions to impose a penalty on banks that paid hefty bonuses and to cap pay at $400,000 for all employees at firms applying for additional government funds did not survive the compromise, sources said.
Get that...? The caps "did not survive the compromise..." What compromise? Compromise with who?
$400,000 per year is not enough money for a banker to live on. What kind of wierd twisted world have we created?
Last Tuesday Eugene Robinson wrote:
Earth to Wall Street: It's over, people. You had a terrific run, better than you deserved, but now you'd be wise to pay attention to those citizens outside, the ones with the pitchforks and the torches.
...
McCaskill introduced a bill to limit compensation at any company receiving bailout money to $400,000 -- the salary of the president of the United States. It's hard to improve on her words: "We should have done it in the first place. But I don't think any of us thought these guys were this stupid. I don't think any of us believed that they would take billions of dollars in bonuses while their institutions were literally days from being wiped out. But they did. And we've learned our lesson."
...
Things have changed. No longer does it seem reasonable -- if it ever did -- that the average CEO makes 344 times as much as the average worker, as was estimated last August by the Institute for Policy Studies and the nonprofit group United for a Fair Economy. No longer does it seem acceptable that John Thain, the since-ousted Merrill Lynch chief who ordered the accelerated bonuses that so irked McCaskill, would spend $1.2 million of his fast-sinking firm's money to redecorate his office -- and then, with Merrill's losses being revealed as even greater than feared, request a bonus of up to $10 million for himself.
No longer does it make any sense to reward those who work in the financial industry so lavishly compared to the way we compensate those who, say, build tractors or write software or teach our children. Salaries should be reasonable and bonuses -- much more modest ones -- should be reserved for those who actually, you know, make money. If some of Wall Street's vaunted "talent" balks and flees, terrific. It was "talent" that got us here.
And now we learn that this provision may have not "survived the compromise." What?
Don't they get it. It is over. Over! O..V..E..R.. Over!
Take a look at this report:
Executive Excess 2008 from United for a Fair Economy. Seriously, this will make you sick.
CEO-WORKER DIVIDE: CEOs in the United States, despite our current hard economic times, continue to pocket outlandishly large pay packages. S&P 500 CEOs last year averaged $10.5 million, 344 times the pay of typical American workers. Compensation levels for private investment fund managers soared even further out into the pay stratosphere. Last year, the top 50 hedge and private equity fund managers
averaged $588 million each, more than 19,000 times as much as typical U.S.
workers earned.
How does this compare to other nations? Read this 2005 report comparing US executive compensation to other countries, CEO Pay Rates, U.S. vs. Foreign Nations:
In 2004, the average American CEO was paid $10 million, as reported in The Wall Street Journal’s annual analysis of the 350 largest public companies (WSJ 2005). This is a huge 14.5 percent increase over the annual CEO compensation in 2003. American CEO pay currently dwarfs foreign CEO pay. German CEOs make 13 times more than the average German manufacturing employee an in Japan, the CEO-to-worker pay ratio is just 11-to-1 (Greenfield 1999).
CEO compensation in Germany 13x average worker.
CEO compensation in the US 344x average worker.
That's simply ridiculous.
So $400,000 is not enough. Not nearly enough.
Who the hell makes $400,000 per year and for what?
All those super geniuses that flocked to the "best" job in the investment banking industry. Forget about actually designing or building anything. Forget about teaching something or creating a small business. There went an entire generation of the most clever minds that our nation produced...
And for what?
Moving money around. Taking it from one pocket and moving into someone else's pocket. And all the complex math was devoted to "opague" financial instuments... Whatever the heck...
Let's make sure that the next generation of wiz kids goes into something that actually produces something. Let's reign in these crooked salaries. Let's make sure that the bankers truly understand that standing at the turnstile does not mean they get to skim off the gate receipts. The party is over boys and girls.
Go look for some real work.
I'll tell you what. $400,000 is plenty. In fact, it is too much.
WaPo says that it is not quite a done deal yet, but...:
The situation was in flux last night, but provisions in the Senate bill that called for a ban on bonuses for all companies receiving government funds also appeared to be headed to the chopping block, congressional sources said.
...but it looks like Congress is going to cave in on bonuses too!
This can not stand!
UPDATE:
Fight Over Executive Pay Caps Isn't Over
By Elana Schor - February 12, 2009, 1:10PM
TPMDC was the first to report on the Democrats' plans to remove Senate-passed limits on executive pay from the final stimulus bill.
Today the WaPo followed by reporting the same thing ... but as we mentioned yesterday, Sens. Olympia Snowe (R-ME) and Ron Wyden (D-OR) aren't done fighting for their proposal to claw back $3.2 billion in bonuses paid out by banks after they got government rescue money last year.
"We are still having difficulty getting a straight answer as to whether or not it is still in the bill," Wyden's spokeswoman told me via e-mail. "Everyone we ask says that someone else is trying to kill it."
It ain't over till legislative language is formally filed -- but if you think they'll take up executive pay limits later this year, I have some worthless Fannie Mae stock to sell you.
Certainly seems like they are trying to slice it out in a pretty sneeky way.
This might be a good time to call your congress person...