View Full Version : Proposed Cap on Bonuses
Here is an article that I woke up to this morning. Interesting how and what this might do, and if it will even work.
http://www.msnbc.msn.com/id/29192298
I like the part where the lobbyist says that the higher up people would flee to other companies. Yea, right. Like other companies want the same ones that ran their old companies into bankruptcy...Yea, those are the people that I want to 'help' my company out!!!:D:D::D
Nathan_Bell
02-14-09, 09:56
Here is an article that I woke up to this morning. Interesting how and what this might do, and if it will even work.
http://www.msnbc.msn.com/id/29192298
I like the part where the lobbyist says that the higher up people would flee to other companies. Yea, right. Like other companies want the same ones that ran their old companies into bankruptcy...Yea, those are the people that I want to 'help' my company out!!!:D:D::D
The executives bailing out to higher pay in other companies is unknown to me, I would imagine that would be a case by case basis. If a vp had a division that did everything right, but got caught up in the large CF, I would imagine that they would be able to land a good gig. An executive that crafted the strategy that got the banks into the situation... they still might land a gig at half of their old pay, which would still be higher than what the cap would allow.
The traders etc that make big money, yeah they can probably find a place at another company. The new company may not pay as much as they earned at the bailed out firms, but they will probably pay more than the cap will allow them.
The Dems must just be beside themselves. They finally have figured out ways to limit what business pay evil capitalist. Put the businesses on welfare. Interesting that Hollywood is getting gov money yet I haven't heard that Brad Pitt(not picking on Pitt) is going to be allowed a certain amount of pay.
Business_Casual
02-14-09, 11:07
This will end up back-firing on them, no worries.
M_P
thopkins22
02-14-09, 16:50
I didn't read the article, but if it's talking solely about the companies that we the American taxpayer are now majority shareholders in, then it's a responsible stance to take. The boards of those companies should have done that in the first place, because the executives clearly weren't worth it...however current contracts must be respected as a matter of following the rule of law.
I don't like it, but IF we're going down the path of buying companies, we can't reward failure any more than we're already doing.
I didn't read the article, but if it's talking solely about the companies that we the American taxpayer are now majority shareholders in, then it's a responsible stance to take.
I don't remember any of the numbers showing any Government/Treasury stake at the majority level. Mind posting where you saw this?
FromMyColdDeadHand
02-14-09, 18:20
What they need to do is take the top 10,000 earners on Wall Street over the past five years and Ban them for life from ever dealing in the financial industry. Either they were in on the cause, or they didn't raise a flag. These are supposed to be the best and brightest, er not so much. That would make sure the next time people raise flags.
Somebody has to got to did ditches.
I think this is a great idea.
I've seen to many companies run day-to-day with the only goal of trying to maximize there personal bonus rather than the greater good of the company in the long run. It's been getting ridiculous for the past few years.
What they need to do is take the top 10,000 earners on Wall Street over the past five years and Ban them for life from ever dealing in the financial industry. Either they were in on the cause, or they didn't raise a flag. These are supposed to be the best and brightest, er not so much. That would make sure the next time people raise flags.
Somebody has to got to did ditches.
So Freddie and Fannie, with the Gov't community reinvestment mandate had nothing to do with the mortgage meltdown? C'mon now, aren't we supposed to have a little bit better handle on the facts?
One thing I don't see mentioned very often is that (supposedly) most of that $18B in bonuses that every one is so upset about did not go to the top executives. I guess it is pretty standard on Wall Street that people work for a base salary and then get a big bonus at the end of the year. I mean most of the white collar staff. One figure I read in an OP ED piece was that that $18B was spread out amongst almost 200k people...
I will try and dig up the article I read that explained it.
Let me ask y'all this, would the subprime exposure been this great if we didn't have our Federal Government saying more minorities and previously unqualified buyers had a right to the "american dream" and home ownership? Was there a big problem with the system the loan underwriters were using, before this government interference in free markets?
thopkins22
02-14-09, 19:35
I don't remember any of the numbers showing any Government/Treasury stake at the majority level. Mind posting where you saw this?
Look up the market cap of these companies. The federal government has raked over more to save these companies than they were worth in total.
thopkins22
02-14-09, 19:37
Let me ask y'all this, would the subprime exposure been this great if we didn't have our Federal Government saying more minorities and previously unqualified buyers had a right to the "american dream" and home ownership? Was there a big problem with the system the loan underwriters were using, before this government interference in free markets?
Of course it wasn't a problem. That's what I've been screaming...the problems with the "free market" are because it's not a free market. I also tend to place a large share of the blame squarely on the shoulders of the FED though. Cheap money causes people to do stupid things.
FromMyColdDeadHand
02-14-09, 19:41
So Freddie and Fannie, with the Gov't community reinvestment mandate had nothing to do with the mortgage meltdown? C'mon now, aren't we supposed to have a little bit better handle on the facts?
We can throw them in too! They were definately a big part of the problem, not just by allowing bad loans. Those people then crowded people higher into the market, causing some of the price inflation. To ignore the CDO and low interest rates role in the problem is to drink to much of the Country Club Republican Koolaide (though it does come in a nice crystal goblet, it is not worth the hang over).
One thing I don't see mentioned very often is that (supposedly) most of that $18B in bonuses that every one is so upset about did not go to the top executives. I guess it is pretty standard on Wall Street that people work for a base salary and then get a big bonus at the end of the year. I mean most of the white collar staff. One figure I read in an OP ED piece was that that $18B was spread out amongst almost 200k people...
I will try and dig up the article I read that explained it.
Bonus, in light of the bailouts seems repugnent. It would have been better, and probably more accurate to say "commision" that was tied to some performance. I assume the guys directly tied to the CDSs and CDOs didn't hit their nut this year. A guy doing currency or commodity exchanges did have much to do with the mess, though with out the bailout they would be SOL.
I'm not that much of a populist, but it would be nice to see some Louis go get a short haircut, figuratively speeking.
Nice three week honeymoon for BHO. Everyone looks like they are walking on water when the decks are awash.
Look up the market cap of these companies. The federal government has raked over more to save these companies than they were worth in total.
I'm aware of the market cap of a few of the banks. Yes, in some cases, the equity investment is even greater than the number of outstanding shares x share price. Right now, Citigroup has a market cap of right around 19 billion and "we the people" have 45 billion into them. Based on this math, are you saying the taxpayers now own Citigroup?
thopkins22
02-14-09, 19:53
Right now, Citigroup has a market cap of right around 19 billion and "we the people" have 45 billion into them. Based on this math, are you saying the taxpayers now own Citigroup?
Not in the sense that the federal government bought regular shares...but yes, these companies are now accountable to the government.
Equity Investment:
Money that is invested in a firm by its owner(s) or holder(s) of common stock (ordinary shares) but which is not returned in the normal course of the business. Investors recover it only when they sell their shareholdings to other investors, or when the assets of the firm are liquidated and proceeds distributed among them after satisfying the firm's obligations.
http://www.businessdictionary.com/definition/equity-investment.html
We can throw them in too! They were definitely a big part of the problem, not just by allowing bad loans. Those people then crowded people higher into the market, causing some of the price inflation. To ignore the CDO and low interest rates role in the problem is to drink to much of the Country Club Republican Koolaide (though it does come in a nice crystal goblet, it is not worth the hang over).
Throw them in too? The Government - Republicans and Democrats alike were the authors of the policy that perpetuated the unsustainable expansion. FWIW, my friend, I'm not drinking any of this koolaid. I didn't participate in the real estate insanity and my market investments were hit just as hard as anyone.
I hope we as a group can identify the real issues and vocalize what is needed to get us back on course. IMHO, we need some serious fiscal conservatism, not more of the same. We will have very bad problems in the near future if we allow the federal government to keep printing money and borrowing from our future.
thopkins22
02-14-09, 20:00
We will have very bad problems in the near future if we allow the federal government to keep printing money and borrowing from our future.
We're definitely on the same page.;) I don't condone the federal government getting involved at all, we're heading down an awfully scary path. The problem is that a severe prolonged recession is unavoidable. But it's the medicine required...unfortunately we keep trying to overdose on the same drug that gave us the problem in the first place.
What's happening now is a cakewalk compared to hyperinflation.
Not in the sense that the federal government bought regular shares...but yes, these companies are now accountable to the government.
A normal shareholder has certain rights. The government isn't an ordinary shareholder in any of these cases and now they have extraordinary, unprecedented rights to control what once was private industry.
That is not a good thing! They don't have a clue and can't run a debt free, balanced budget, profit generating operation if they wanted to. Now they have the reigns on the engines for all that money. We are soooooooo screwed...
We're definitely on the same page.;) I don't condone the federal government getting involved at all, we're heading down an awfully scary path. The problem is that a severe prolonged recession is unavoidable. But it's the medicine required...unfortunately we keep trying to overdose on the same drug that gave us the problem in the first place.
What's happening now is a cakewalk compared to hyperinflation.
Too true. We ARE on the same page!!! We were just talking about hyperinflation last friday...
I wrote my Senator and Congressman last fall and told them "no bailout". I told them we needed to go through the recession, endure the correction and come out healthier as a whole. So much for writing your elected representative...
Nathan_Bell
02-14-09, 20:32
What they need to do is take the top 10,000 earners on Wall Street over the past five years and Ban them for life from ever dealing in the financial industry. Either they were in on the cause, or they didn't raise a flag. These are supposed to be the best and brightest, er not so much. That would make sure the next time people raise flags.
Somebody has to got to did ditches.
How about we punish the people who truly caused it to happen;Jimma Carter, Bill Clinton, Greenspan, and Congress? These guys where just following the stream around the dam that the scum in government built.
thopkins22
02-14-09, 20:39
How about we punish the people who truly caused it to happen;Jimma Carter, Bill Clinton, Greenspan, and Congress? These guys where just following the stream around the dam that the scum in government built.
GWB didn't exactly point the problems out either. But especially Greenspan, he started the fire, and Bernanke is trying to put it out with kerosene. Scholar of the great depression.:rolleyes:
GWB didn't exactly point the problems out either. But especially Greenspan, he started the fire, and Bernanke is trying to put it out with kerosene. Scholar of the great depression.:rolleyes:
GWB tried multiple times to put more regulation and oversight on Fannie and Freddie. There are a bunch of online videos from C-SPAN covered hearings where the Bush Administration tried to rein in F&F. I am not saying they had perfect oversight but they tried to do something to rein it in.
Barney Frank, Chris Dodd and Chuck Shummer have the most immediate personal responsibility for the mortgage problem for forcing lending to unqualified borrowers and blocking Bush reforms.
I think ALL large company executives should receive their excess compensation (say 70% of total) in the form of common stock in their companys that could not be sold for five years from the time they received it. They might then do some realistic long term planning.
thopkins22
02-15-09, 09:06
GWB tried multiple times to put more regulation and oversight on Fannie and Freddie. There are a bunch of online videos from C-SPAN covered hearings where the Bush Administration tried to rein in F&F. I am not saying they had perfect oversight but they tried to do something to rein it in.
They may have tried to do SOMETHING...but THIS SPEECH (http://www.youtube.com/watch?v=eW9viaJatpo) he gave sort of leaves my opinion of his stance on the issue in the same place. You could have substituted a democrat's voice, the words are the same.
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