Obama To Cap Executive Compensation At Firms Receiving Help at $500,000

February 4, 2009 at 12:25 pm  ·  Category: Market Commentary, Obama, Politics

We’re going to be demanding some restraint in exchange for federal aid.

President Obama on Wednesday

If you have someone who was making well over $1 million, and now they are capped at $500,000, it is very conceivable that they are going to look to go to a company that is not subject to those limitations.

Mark Poerio , Partner at law firm Paul Hastings

President Obama announced today a $500,000 cap on executive pay at companies receiving “exceptional” government aid.  One thing to note is that this is going forward so it doesn’t apply to anyone yet.

But isn’t it pretty obvious that if you are an executive whose market value is in the millions and you’re forced to take a fraction of what you could get elsewhere that you are going to leave?  Why stick around?  Let it be someone else’s problem if you’re not going to be compensated for the difficulty of task. 

The unintended consequence of this will be the best talent leaving the troubled banks where they are most needed.   Not only will these banks have crippled balance sheets, they won’t have the best people to deal with the situation.

Posted by Greg Feirman  ·  Trackback URL  ·  Link
No Responses to “Obama To Cap Executive Compensation At Firms Receiving Help at $500,000”
  • While it should go without saying that even a legitimate President’s “ordered” $500,000 pay cap is an unenforceable intrusion into the private sector, as if that weren’t enough, Obama LACKS EVEN OSTENSIBLE AUTHORITY to issue the order UNTIL HE OVERCOMES “RES IPSA LOQUITUR” BY SUPPLYING HIS LONG FORM BIRTH CERTIFICATE AND PROVING HIS ELIGIBILITY TO BE PRESIDENT UNDER ARTICLE 2 OF THE US CONSTITUTION.

    Ted  ·  Feb 4, 2009 at 4:14 pm  ·  Permalink
  • Since the “best talent” has managed to lose $trillions perhaps it is time to bring in less “talented” but more astute players off the bench.

    Groundhogday  ·  Feb 4, 2009 at 4:38 pm  ·  Permalink

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