I still do not like the $700 billion Wall Street bail-out, but if there is to be a bail-out it must have as one of its provisions a cap on executive pay and bonuses. Democrats should not vote for any package that does not have the pay caps.
The executive pay in all American corporations has really gotten out of whack and needs to be adjusted. As Social Seppuku tells us, CEOs made 24 times the average worker's salary in 1965. By 1980, the CEO compensation was 40 times an average worker's salary, and today the CEO pay is 374 times the average worker's salary. While worker wages have stagnated, CEO compensation has risen exorbitantly.
Do the Republicans and their Wall Street buddies really expect these kind of ridiculous executive compensations to be paid out of taxpayer monies? We may have to bail these companies out, but we don't have to make their executives obscenely rich off taxpayer money.
Treasury Secretary Paulson opposes the cap on executive pay. He says he's afraid some companies won't participate in the bail-out if executive pay is capped. That sounds stupid to me. Paulson has been telling us that these companies will go bankrupt and cease to exist if they aren't bailed out by the taxpayers.
Is he now telling us these companies would rather be put out of business rather than accept executive pay caps? If so, then it is easy to see why these compaies are in trouble. Their executives have put their own greed above what is good for the company.
I say we must proceed with the pay cap as a requirement for getting bail-out money. If a company doesn't want taxpayer money (and the rules that go with it), then they don't have to take it. We should not beg any company or force any company to take bail-out money from the taxpayers.
I like Senator Feinstein's attitude when she said, "I'm told that the reason the Treasury Secretary doesn't want limits on executive compensation is because he believes that an executive then won't bring his company in to partake in any program that is set up. Well here's my response to that. We can put that executive on his boat, take that boat out in the ocean and set it on fire if that's how he feels. That's what should happen, or his company doesn't come in."
(Numbers in above illustrations come from The Economist.)