Armed Polite Society
Main Forums => The Roundtable => Topic started by: Fjolnirsson on October 22, 2009, 06:17:36 PM
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http://news.yahoo.com/s/ap/20091022/ap_on_bi_ge/us_obama_executive_pay (http://news.yahoo.com/s/ap/20091022/ap_on_bi_ge/us_obama_executive_pay)
WASHINGTON – The Treasury Department on Thursday ordered seven companies that received billions of dollars in government bailouts to halve total compensation for their top executives. But the big reductions will not apply to pay earned before November.
Kenneth Feinberg, the Treasury official leading the pay review, told reporters that average salaries for the top 25 executives are being cut 90 percent starting next month.
The action will apply to the top executives at Bank of America Corp., American International Group Inc., Citigroup Inc., General Motors, GMAC, Chrysler and Chrysler Financial.
More at the link. I ask myself, "Self," I say, "if your boss told you he was cutting your salary in half, and you would be performing the same duties, what would you do?" I'd tell him to take his job and shove it.
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I did just hear an interview with Ken Feinberg on the radio, where he stated that a large portion of these are not straight pay cuts, but conversions from cash to stock, for whatver that's worth.
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Yeah, the 90% figure is just shock value. It works out to around 50%, according to the article. Still, someone tries to change the deal on me like that, I'd go elsewhere..
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I ask myself, "Self," I say, "if your boss told you he was cutting your salary in half, and you would be performing the same duties, what would you do?" I'd tell him to take his job and shove it.
You say that as if it might, in this case, be a bad thing.
???
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Anyone catch Judge Napoitano on Fox News today? He rattled off several reasons why this deal is unconstituional, but I can't remember his examples. On a related note, is "Judge" his first name or former profession?
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He was a judge. In Arizona, I think.
The government has no authority to regulate someone's pay any more than they can force someone to buy something he/she doesn't want or need (health insurance).
This is so far out of control that I wonder if the SC could ever reel it back in, or if they'd just roll over for the executive and legislative branches.
Hope and Change. I don't know about the hope, but the last time there was change this radical was in Beijing in 1949.
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I thought it was scary when Obama fired the GM CEO. Ominous, as it were... :|
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Newsflash: 14 companies bailed out by the government, including GM and Bank of America filed bankruptcy today, citing irreversible losses since their top executives quit for more money and benefits at their competitors.
In other financial news, Ford, under the leadership of former Bank of America and GM executives, reported record profits. Commissar Rahm Emanual on behalf of Chairman Hussien, was reportedly seeking legislation that precluded executives from changing companies without the permission of the Politb...White House
WildthereturnofkobaAlaska TM
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Let's see. So we have a problem with shrinking tax revenues, so let's cut the pay of some of the people that pay the most in income taxes. Brilliant.
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Let's see. So we have a problem with shrinking tax revenues, so let's cut the pay of some of the people that pay the most in income taxes. Brilliant.
Ah, but if you cut their pay, the money they would have gotten goes to the commune.
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If you take the king's shilling ...
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Don't worry!
Most of them have left already, anyway:
http://www.marginalrevolution.com/marginalrevolution/2009/10/gone-gone-gone.html
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If you take the king's shilling ...
This. I find it difficult to have sympathy when the [deleted] complains about getting [deleted]. When you sell your .biz to fed.gov you shouldn't be surprised when they tell you what to do.
edited - The Round Table is all-ages, lest we forget...
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This. I find it difficult to have sympathy when the [deleted] complains about getting [deleted]. When you sell your .biz to fed.gov you shouldn't be surprised when they tell you what to do.
Oh, absolutely. I'm just saying it's a stupid move on the Feds part. Oh, wait. I'm repeating myself....
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I thought it was scary when Obama fired the GM CEO. Ominous, as it were... :|
I agree with Bryan. When you take the King's shilling, you are the King's man. Maybe next time companies learn bloody well to stay away from the government's checkbook if they know it will bring them personal ruin. Retroactive paycuts, bills of attainder, for messing with the pay of non-welfare corporations, I'd agree scary.
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IIRC, the GM CEO got the Presidential boot before GM was even close to getting their bailout. IOW, they hadn't received the king's shilling yet. When FedGov can arbitrarily fire private business leaders that aren't necessarily beholding to them, that's bad juju.
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IIRC, the GM CEO got the Presidential boot before GM was even close to getting their bailout. IOW, they hadn't received the king's shilling yet. When FedGov can arbitrarily fire private business leaders that aren't necessarily beholding to them, that's bad juju.
I'm pretty sure they had either gotten the money or agreed to take it.
Chris
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Ah, but if you cut their pay, the money they would have gotten goes to the commune.
Ok ................... Wait a minute ........What Commune .........
Or that's what I would hope our national reporters would actually ask. Of course I don't expedt any different.
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I agree with Bryan. When you take the King's shilling, you are the King's man. Maybe next time companies learn bloody well to stay away from the government's checkbook if they know it will bring them personal ruin. Retroactive paycuts, bills of attainder, for messing with the pay of non-welfare corporations, I'd agree scary.
My biggest problem is not just the breaking of contracts. I expect the Democrats to ignore the law, thus that argument I am unlikely to make as it will fall on deaf ears.
My argument is that this is STUPID. Cut the pay of the top people cause you're angry. Many will leave (as I have already noted many did it preemptively) and many aspiring to be one of those top people will leave because they know they will not be rewarded.
Thus the smartest ones will leave. Sooo... just like the government, we're left with the ones that are either incapable or incompetent.
But HEY, at least they are getting paid less.
I've read so many stupid liberal comments about this- "They caused the problems!!! Let them leave, the company can only get better!!!"
"If another company hires them, they'll just take that company down too!!!"
I would say I'm surprised, but long ago I realized the left point of view has very little grounding in reality.
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This. I find it difficult to have sympathy when the [swell folks at banks] complains about getting [intercoursed]. When you sell your .biz to fed.gov you shouldn't be surprised when they tell you what to do.
edited - The Round Table is all-ages, lest we forget...
You take the man's money, you follow the man's rules, even when they change them in midstream. Honestly, I think they are getting the devil's due. I'm shocked that Obama hasnt pulled Sherman Antitrust out of mothballs already.
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You take the man's money, you follow the man's rules, even when they change them in midstream. Honestly, I think they are getting the devil's due. I'm shocked that Obama hasnt pulled Sherman Antitrust out of mothballs already.
That's for punishing the insurance companies for telling the truth, silly.
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The government has no authority to regulate someone's pay any more than they can force someone to buy something he/she doesn't want or need (health insurance).
They already do via minimum wage laws, and have been for a long time.
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They already do via minimum wage laws, and have been for a long time.
Clearly you know what to do, then.
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Thus the smartest ones will leave. Sooo... just like the government, we're left with the ones that are either incapable or incompetent.
I agree it's a punitive move, but I guess it's all relative...since "the best and the brightest" already succeeded in bankrupting their companies and tanking the global economy. Sadly, they will just move on and carry on business as usual. They'll all just continue to develop and utilize new means of transferring wealth from us to themselves, no matter where they work. At least the incompetent and slow might stick with what they know, like producing goods and services that have actual value, and are perhaps desired by customers...unlike derivatives, hedge funds, or other clever things, known and understood only by "the best and brightest".
Who knows, there may actually be some bright people who will step into those jobs, only for the satisfaction of the challenge and an opportunity to make a paltry $1-2 million a year base, and bonus based on successful performances.
The so called meltdown succeeded at shining a little light on the situation, but the fleecing continues at break-neck speed. Obama and friends (including Wall Street) are just throwing a bone to the masses.
I just wish I could figure out how to hedge my finances to protect my family from them. I'm thinking a paid for double-wide trailer, with a wood burning stove (in the boonies), a big garden, and a good squirrel rifle might be the best investment going. I don't think they can think small enough to steal or transfer those things from me to them.
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I agree it's a punitive move, but I guess it's all relative...since "the best and the brightest" already succeeded in bankrupting their companies and tanking the global economy. Sadly, they will just move on and carry on business as usual. They'll all just continue to develop and utilize new means of transferring wealth from us to themselves, no matter where they work. At least the incompetent and slow might stick with what they know, like producing goods and services that have actual value, and are perhaps desired by customers...unlike derivatives, hedge funds, or other clever things, known and understood only by "the best and brightest".
Who knows, there may actually be some bright people who will step into those jobs, only for the satisfaction of the challenge and an opportunity to make a paltry $1-2 million a year base, and bonus based on successful performances.
The so called meltdown succeeded at shining a little light on the situation, but the fleecing continues at break-neck speed. Obama and friends (including Wall Street) are just throwing a bone to the masses.
I just wish I could figure out how to hedge my finances to protect my family from them. I'm thinking a paid for double-wide trailer, with a wood burning stove (in the boonies), a big garden, and a good squirrel rifle might be the best investment going. I don't think they can think small enough to steal or transfer those things from me to them.
>.<
Many of these executives had nothing to do with the problems in their companies.
Secondly, as I have said many times, they did not make foolish moves. They assumed they could take on the risk associated with those "toxic" assets judging that the government would be likely to bail them out if these assets failed.
Their risk assessment was exactly right. Their purchasing those assets is the result of what economists call a "moral hazard"- the, government by indicating they were willing to bail out these assets (through their backing of Fannie and Freddie) made them more attractive. Knowing that, the companies bought these assets because the government artificially lowered the risk on them.
When the government is handing out "free" money (or backing VERY risky securities that will, therefore, pay a higher premium), very few people will fail to line up.
Be angry about the "failure of the market" if you want. The market responded as it always will. If you don't want something like this to happen again, though, get angry about the government skewing the incentives in the market.
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I did just hear an interview with Ken Feinberg on the radio, where he stated that a large portion of these are not straight pay cuts, but conversions from cash to stock, for whatver that's worth.
I believe the reductions are 90% of your salary and 50% of your stock options, plus a requirement that any stock options not be vested for at least 5 years.
So, depending on how your pay is structured, it's a pay cut of anywhere between 50% and 90%, along with a hefty delay in receiving major chunk of your pay.
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I thought it was scary when Obama fired the GM CEO. Ominous, as it were... :|
Yup. the GM CEO was first, cause he was the easiest target. Now they've done the banking execs. I heard on the Tee Vee this weekend (some news channel show, I forget the details) that our illustrius Pay Czar has another 60 execs lined up for the next round.
But don't worry. It may take 'em a bit longer, but they'll get around to cutting your salary and mine soon enough.
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I agree it's a punitive move, but I guess it's all relative...since "the best and the brightest" already succeeded in bankrupting their companies and tanking the global economy. Sadly, they will just move on and carry on business as usual. They'll all just continue to develop and utilize new means of transferring wealth from us to themselves, no matter where they work. At least the incompetent and slow might stick with what they know, like producing goods and services that have actual value, and are perhaps desired by customers...unlike derivatives, hedge funds, or other clever things, known and understood only by "the best and brightest".
Who knows, there may actually be some bright people who will step into those jobs, only for the satisfaction of the challenge and an opportunity to make a paltry $1-2 million a year base, and bonus based on successful performances.
The so called meltdown succeeded at shining a little light on the situation, but the fleecing continues at break-neck speed. Obama and friends (including Wall Street) are just throwing a bone to the masses.
I just wish I could figure out how to hedge my finances to protect my family from them. I'm thinking a paid for double-wide trailer, with a wood burning stove (in the boonies), a big garden, and a good squirrel rifle might be the best investment going. I don't think they can think small enough to steal or transfer those things from me to them.
I would agree that some of these execs made bad decisions, and ought to be punished.
I absolutely, 100%, wholeheartedly disagree that Obama is the right person to impose any punishments. It isn't any of his business whatsoever, and he has no right to meddle in these affairs.
:mad:
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History is relevant. IIRC President Clinton railed against excessive pay of evil poobah's and went to congress for relief. Congress, in its wisdom (yeah, I know but humor me) said "foul" and passed legislation which limited poobah pay to something like $800 grand per year which was full deductible. Anything over the figure was not deductible as a business expense. The effect was predictable. Businesses simply shifted poobah compensation from salary to perks, bonuses, and deferred compensation. Due to the nature of the business Wall Street types want after bonuses like a retriever goes after a ham sandwich. Now Obama rides into town decrying excessive bonuses that were created by Clinton in a fit of righteous indignation over excessive pay.
Just doesn't seem to be any pleasing these people. Which begs the question, "Why do they continue to support 'em?"
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I would agree that some of these execs made bad decisions, and ought to be punished.
I absolutely, 100%, wholeheartedly disagree that Obama is the right person to impose any punishments. It isn't any of his business whatsoever, and he has no right to meddle in these affairs.
:mad:
Only reason I disagree is because these banks and whatnot took my money. When Obama decides to regulate pay of a specific company that did NOT take my money, then he will have gone too far.
[of course I mean in the form of a bailout, not a regular contract.]
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Only reason I disagree is because these banks and whatnot took my money. When Obama decides to regulate pay of a specific company that did NOT take my money, then he will have gone too far.
[of course I mean in the form of a bailout, not a regular contract.]
Lending money to someone does not grant you control over how they behave. This is (or ought to be) basic common sense.
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There has already been some trial balloon noise made about going after executive pay outside of those companies that received bailout funds. This was mentioned in an earlier thread.
Barney Frank and a few of his cronies have also made noise about taking 401(k)s and IRAs because it is unfair that some have had a "free ride" with regard to their associated tax deferrals.
All of this should be no surprise: the American people voted for socialism in the last election.
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Lending money to someone does not grant you control over how they behave. This is (or ought to be) basic common sense.
I will inform the Fed of this!
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I've got serious reservations about the bailouts, but since they HAVE happened . . .when we're tallking about companies that have been run into the ground to the degree that they need tens of billions of dollars - let me repeat that, tens of billions of dollars in taxpayer funds to rescue them . . .
The CEO, CFO, and entire BOD ought to have been fired out of hand for sheer incompetence, and prohibited from jumping to any other company being bailed out.
And spare me this crap about "the best and the brightest" needing to be retained. If some large company has an operating unit that's turning a profit, fine . . . leave the guy running that unit alone; HE is EARNING his pay. Otherwise, a thorough housecleaning is in order; the "best and brightest" do not repeat not run giant megacorporations into the ground.
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Lending money to someone does not grant you control over how they behave. This is (or ought to be) basic common sense.
Sure it does. When the bank lent me money to buy my house, they control how I behave. They mandate that I purchase insurance to protect their investment in me. They mandate that I pay them on certain dates, and pay them extra for their trouble.
If you borrow money from someone, they will mandate that you protect their investment in you. If you borrow money from the government, they will do the same, and they have the power to change the rules in midstream via legislation.
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Sure it does. When the bank lent me money to buy my house, they control how I behave. They mandate that I purchase insurance to protect their investment in me. They mandate that I pay them on certain dates, and pay them extra for their trouble.
If you borrow money from someone, they will mandate that you protect their investment in you. If you borrow money from the government, they will do the same, and they have the power to change the rules in midstream via legislation.
You agreed to live up to certain terms when you took the loan, such as maintaining insurance and paying the loan back according to an agreed upon schedule. The bank has no power to enforce anything at all except what you willingly agreed to upfront.
Your mortgage bank can't come in and tell you what color to paint the walls of your house, or how often you must mow your lawn, or whatever else. You car loan lender can' tell you how to drive your car, or how to maintain it, or hwo can borrow it, or anything else. Your credit card company can't tell you what to do with any of the stuff you charge onto your card.
All the lender can do is enforce the terms of the loan. They have no other rights or powers whatsoever. None!
The loans to the big banks are no different. FedGov has no more right to run the big banks because they gave 'em a loan than your mortgage bank has a right to make you hire the bank CEO's brother-in-law Joe Bob to replace your furnace.
FedGov has no right to do anything except enforce the ortiginal terms of the loans they made to the banks. Those terms cannot be changed on the fly. Those terms did not include any provisions that the government would get run the bank.
Get a clue, people. You're falling for a red herring. Obama knows the big bank execs are unpopular right now. He knows he can get away with abusing them. This has nothing to do with loans or bailouts or the economy, and everything to do with power. Obama sees a chance to steal a huge chunk power for himself, so he's doing it. He's going to get away with it because the country is cheering on the abuse of hated executives, and nobody is bothering to stop and think about what's happening here.
What happens when FedGov decides to tell you how to run your household the same way they've told the banks how to run their businesses? Do you think they can't? Do you think they won't? Do you think they're only going to abuse other people and never abuse you? They own your mortgage, you know, either through Freddie/Fannie or through the banks they've taken over. By your reasoning the fact that you owe them money for your house grants them the authority to control everything that goes on in, around, and relating to, your home.
Right?
They also now own the car business, the student loan business, the credit card businesses, and the investment brokerages. By your reasoning they can control most every aspect of your life, everything from where you can travel, to what you can learn and what careers you can pursue, to what you can spend your money on and how you can use the things you've spent your money on, and whether or not you're allowed to build up any savings or personal wealth.
Wake up, people!
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I think HTG nailed it.
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Get a clue, people. You're falling for a red herring.
I'd agree with you that far...but I think the red herring is that he is appeasing the masses with some selective punishment, while the real players continue to play tricks with computer programs to make the numbers look better and make everyone feel all warm inside. These guys are like the Robber Barons of the last century, except they create nothing but wealth for themselves....even if only temporary in some cases. The only problem I have with what BO's doing, is that it's not universal. I could possibly agree with you if we had just let every bank in the world fail...and most economies...but we didn't. ..and for good reason.
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I suppose it depends on how it is handled, as to whether or not I am outraged.
1) In principle, I don't agree with any kind of salary caps, for sport or business.
2) However, if a business takes Federal money then the executives give themselves massive bonuses while the business is still failing, I can see how that could be considered outright theft. Like if a friend says they are starving and needs a loan, you give it to him, then you find out he spent all the money on this and that.
So I guess I would have to say I would need to see a case by case analysis on why they step on a particular business/bank and make a determination individually.
Then I can say how offended I am :)
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These folks ran their companies into the ground. If these are the best and brightest, then let them leave. I'll do just as good of a job for half the price.
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Yep. Just sit around in that executive suite and wear expensive suits. Hell, I can do that. Anybody can. That's why the boards of directors offer these guys millions. Go to a board meeting. I'll bet they'll offer you millions, too, if you ask real nice.
Since Obama wants to control the outrageous compensation given to these thieves, do you think the voters can limit how much money he can make after he leaves office? After all, we'll be paying his pension--if he doesn't bankrupt the country first.
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These folks ran their companies into the ground.
No. they. did. not.
makattack nailed it. They played by the rules of the market, and the .gov distorted the market. Remember Milt Friedman and Free to Choose ? The market and prices communicates information (scarcity or abundance) about any product. The problem was is that the .gov distorted the market by removing the risk (through Freddie and Fanny). Think about it. You go to the horse track knowing that you could bet on any horse and if wins you got to keep you winnings and that if your bet lost, you rich uncle would cover your losses, no need to do any handicapping, just bet on each horse. The problem was that all the horses broke their legs.
Whenever there's a major economic meltdown, generally the market has been distorted somehow and generally it's the .gov that doing the distorting.
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After all, we'll be paying his pension--if he doesn't bankrupt the country first.
I think the last few Presidents had that one covered already. The money is just flowing in a different direction.
I think George W. (we have a no-cutesy-name rule here) was trying to raise himself up from possibly being rated as "the worst President ever" to "Destroyer of the modern World."
"Man that's lak ten of your ball players having heart attacks on the sme day of the World Steeries....it's hard work". BO came in to relive him, and now he just sits in the dugout waiting to see what perks he gets for being "Wort President ever"
Good Executives are worth their weight in gold, it's just too bad the standard rate has become 20 people's weight in gold, + another ton for bonus.regardless of performance. That's fine if you're making the company money -not fine if the company is on it's knees begging for trillions from me and you.
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1. They never should have been bailed out/stimulated/given free money.
2. Executive salary and bene's are negotiated upfront. It's a contract, you do 'X', then you get paid 'Y'.
3. How come when sport figures have a crappy year or season, they don't have to give the money back ? Didn't they help drive their team into the ground ?
I've worked on salary most of my life. I've worked at a place where I did my part and my area/plant/division did what was required to hit the bonus numbers and then be told that because the other part(s) of the company screwed the pooch, no one would be getting bonuses. Didn't stay at that place very long.
One place I worked for stated right up front: We expect you to make at least 25% of you income in bonuses. If you're not hitting the goals to get that 25%, then your not doing your job. "
Friends of mine that work in the financial sector get a pittance as base salary. The rest is bonuses based on performance. So be careful when the .gov starts villianizing those "Executive Bonuses", Directive 10-289 isn't far behind.
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I suppose it depends on how it is handled, as to whether or not I am outraged.
1) In principle, I don't agree with any kind of salary caps, for sport or business.
2) However, if a business takes Federal money then the executives give themselves massive bonuses while the business is still failing, I can see how that could be considered outright theft. Like if a friend says they are starving and needs a loan, you give it to him, then you find out he spent all the money on this and that.
So I guess I would have to say I would need to see a case by case analysis on why they step on a particular business/bank and make a determination individually.
Then I can say how offended I am :)
How about this one:
http://www.businessweek.com/ap/financialnews/D9B3HEI00.htm
The pay package given to Freddie Mac's new chief financial officer should have sent a message from Washington to corporate America about how executive compensation standards must change. Instead, it did just the opposite.
The government-controlled mortgage finance company is giving CFO Ross Kari compensation worth as much as $5.5 million. That includes an almost $2 million cash signing bonus and a generous salary that could top $2.3 million.
Look at how the government is limiting the salaries of the companies it had to bail out!!!!... or, not...
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Anyone catch Judge Napoitano on Fox News today? He rattled off several reasons why this deal is unconstituional, but I can't remember his examples. On a related note, is "Judge" his first name or former profession?
he never made it that far as a state judge in jersey left that to be a scholar
Judicial and academic career
Napolitano sat on the New Jersey bench from 1987 to 1995, becoming the state's youngest life-tenured judge. He also served as an adjunct professor at Seton Hall University School of Law for 11 years. Napolitano resigned his judgeship in 1995 to pursue his writing and television career.
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No. they. did. not.
Yes. They. Did. So.
To be sure, bad government had a role, and bad government continues to plague the economy, but note that only SOME companies have tanked; if .gov was solely responsible, then every company - every company - would go bust or need a bailout. But that's not the case.
When it comes to a company's operations, where does the buck stop, if not at the top?
Banks? There are quite a few banks that are healthy, because they did NOT jump into the sub-prime mess. (One local bank is including this in its advertising.)
Brokers? Not every broker went bust - some managed risk and assets in a rational manner.
Insurers? Not every insurance company has gone bust.
Car makers? GM and Chrysler have been mismanaged for decades - yet Ford is (at this writing) managing to hold on, as are Toyota, Nissan, etc.
Yep. Just sit around in that executive suite and wear expensive suits. Hell, I can do that. Anybody can. That's why the boards of directors offer these guys millions. Go to a board meeting. I'll bet they'll offer you millions, too, if you ask real nice.
Yeah, I do catch the sarcasm here . . . but just because someone was chosen to fill a highly visible position with a lot of power DOES NOT mean he is well suited or even competent in that position. (Take Obama . . . please.)
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The failure of a company is not, in itself, evidence of CEO incompetence. There are often circumstances beyond their control that can have devastating affects on the business and the business environment.
Government has severely screwed up the financial markets. I won't say the bank CEOs have been flawless and never made any mistakes, but it's absolutely true that this environment is extremely difficult for any finance type company. Even the best companies and CEOs are teetering on the brink these days.
Any of you Monday morning quarterbacks who think you could have done just as well in this environment, well, let's just say you don't know what you're talking about.
And I'm still waiting for an explanation of how it's any of your business or Obama's what happens to "bad" CEOs.
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Obama did it for the children, near as I can tell.
I've been joking with my Executive Vice President here, telling him that Obama will fire his posterior if he doesn't produce. ;)
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How about this one:
http://www.businessweek.com/ap/financialnews/D9B3HEI00.htm
Look at how the government is limiting the salaries of the companies it had to bail out!!!!... or, not...
*shrug* That doesn't seem to be about limiting compensation, so I am not offended within the context of this discussion. As far as being offended overall, I guess it depends on what average compensation is in that industry for that position. I might have missed something in the article though, feel free to point out specifics.
And I'm still waiting for an explanation of how it's any of your business or Obama's what happens to "bad" CEOs.
Well, companies that take TARP money agreed to follow congressional rules about compensation, so that is their fault if it bites them in the butt.
Companies that were bailed out by something besides TARP funds agreed to Federal oversight on...well, pretty much everything. So again, if it bites them it is their fault.
If you just mean in general, outside of the bailouts, then it isn't anyones business unless you are a stock holder in the company, or the industry is heavily regulated by the Fed (regardless of whether or not you think that is right).
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Well, companies that take TARP money agreed to follow congressional rules about compensation, so that is their fault if it bites them in the butt.
Yes, and what laws have congress passed regarding employee compensation?
And if they have passed any such laws, by what legal authority?
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Yes, and what laws have congress passed regarding employee compensation?
Federal minimum wage
And if they have passed any such laws, by what legal authority?
I would argue, no legal authority at all
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Yes, and what laws have congress passed regarding employee compensation?
And if they have passed any such laws, by what legal authority?
I imagine that by accepting TARP money they simply agree to follow the congressional rules. No-one says they have to accept Federal money. If an organization takes Federal grant money for whatever reason, they also agree to follow whatever rules the Fed wants them to.
I am just saying it isn't like this stuff is blind-siding these companies. They knew what they were agreeing to when the asked for Federal help, and compensation oversight was certainly part of that. It would be different if this was random, after the fact stuff for fully private companies, but it isn't. TARP has requirements built into it, and so do the non-TARP bailout programs.
They have legal authority because these private enterprises voluntarily accepted Federal oversight when they asked for Federal money. They entered a contract with the Fed, and part of that contract was giving up some corporate sovereignty.
Stupid? Maybe...if their choice was bailout money or total failure it might have been tough to refuse. Right or wrong? It doesn't matter. Legal? Certainly, since the programs are all voluntary. GM did not have to give the Fed a majority stock holding and agree to total oversight, they could have just let things collapse or sold out to some other company for pennies on the dollar. Any of them could have.
(Edit: Legal as within commonly accepted Federal authority. If you are arguing it is wrong because the government should not be able to do something like TARP in the first place, commerce clause abuse, etc. then fine, but that is another discussion.)
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I imagine that by accepting TARP money they simply agree to follow the congressional rules. No-one says they have to accept Federal money. If an organization takes Federal grant money for whatever reason, they also agree to follow whatever rules the Fed wants them to.
They have legal authority because these private enterprises voluntarily accepted Federal oversight when they asked for Federal money. They entered a contract with the Fed, and part of that contract was giving up some corporate sovereignty.
Really? Have a copy of that contract? Where's the clause dealing with executive compensation?
Democrats want to screw the executives over now (and, before this all happened). I understand that.
By what legal authority can they do that?
Can I, after seeing you get into an accident come and save you and then require you to hand over your house/car/life to me now that I've saved you?
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No-one says they have to accept Federal money.
Ummm, not quite.
http://www.cnbc.com/id/30745687
"We don't believe it is tenable to opt out because doing so would leave you vulnerable and exposed. If a capital infusion is not appealing, you should be aware your regulator will require it in any circumstance," the document said, citing Paulson talking points.
Might want to read the entire article.
According to the documents released by Judicial Watch, Treasury Secretary Tim Geithner, FDIC Chair Sheila Bair and Fed Chairman Ben Bernanke co-hosted the October meeting with Paulson.
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Really? Have a copy of that contract? Where's the clause dealing with executive compensation?
Democrats want to screw the executives over now (and, before this all happened). I understand that.
By what legal authority can they do that?
Can I, after seeing you get into an accident come and save you and then require you to hand over your house/car/life to me now that I've saved you?
http://www.ustreas.gov/press/releases/reports/document5hp1207.pdf <-- This is for TARP, specifically, and is just a FAQ, not the actual agreement they would sign...but it illustrates that there are written rules and guidelines. It even has a specific part on executive compensation.
These programs are highly regulated, they are not just taking a number and getting an interest free loan. It *is* a loan contract, essentially.
If I am about to have my house taken away, and you offer to give me a loan but I have to follow contractual guidelines, sure you can do that.
Ummm, not quite.
http://www.cnbc.com/id/30745687
Might want to read the entire article.
True, the banks probably would have been forced to take money before they failed because they could have had the regulators mandate levels of acceptable liquidity.
(Edit: Again, I am not arguing for it being 'right', I am just saying it is legal by current Federal standards. You can still hate it.)
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http://www.ustreas.gov/press/releases/reports/document5hp1207.pdf <-- This is for TARP, specifically, and is just a FAQ, not the actual agreement they would sign...but it illustrates that there are written rules and guidelines. It even has a specific part on executive compensation.
These programs are highly regulated, they are not just taking a number and getting an interest free loan. It *is* a loan contract, essentially.
By what legal authority can the Treasury Secretary enter into such a contract?
True, the banks probably would have been forced to take money before they failed because they could have had the regulators mandate levels of acceptable liquidity.
Banks that weren't at risk of failing were still forced to accept TARP money. JP Morgan and Wells Fargo both come to mind. And Bank America was arm twisted into spending billions to buy out Merrill, and the loss of those billions put them in a position to need TARP money.
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1. By what legal authority can the Treasury Secretary enter into such a contract?
2. Banks that weren't at risk of failing were still forced to accept TARP money. JP Morgan and Wells Fargo both come to mind. And Bank America was arm twisted into spending billions to buy out Merrill, and the loss of those billions put them in a position to need TARP money.
1. No idea, but since the banks have not sued them (or some conservative organization has not sued them, it would be pretty easy to establish harm for a lawsuit if it had a legal avenue of attack) I imagine there is a basis in law.
2. The Fed threatened to change regulations to force acceptance of Federal money. I am not arguing with your point.
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1. No idea, but since the banks have not sued them (or some conservative organization has not sued them, it would be pretty easy to establish harm for a lawsuit if it had a legal avenue of attack) I imagine there is a basis in law.
2. The Fed threatened to change regulations to force acceptance of Federal money. I am not arguing with your point.
It wasn't that FedGov threatened regulatory changes. It was that the Treasury Secretary called all of the execs to a meeting and told them, literally, "you aren't leaving this room until you all sign."
Don't assume that because it hasn't been challenged in court it's therefore "unchallengable". FedGov clearly has the clout to make the big banks and their execs come to heel. Surely that clout allows them to, ah, dissuade the execs from suing.
Also, you're confusing The Fed (aka the Federal Reserve, our central bank) with the Federal Government (our government, the Congress, the Executive branch with its various departments like the Treasury Dept, and the courts). The Fed is a vastly different beast from the Federal Government, with different powers, mandates, and accountabilities.
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1. It wasn't that FedGov threatened regulatory changes. It was that the Treasury Secretary called all of the execs to a meeting and told them, literally, "you aren't leaving this room until you all sign."
2. Don't assume that because it hasn't been challenged in court it's therefore "unchallengable". FedGov clearly has the clout to make the big banks and their execs come to heel. Surely that clout allows them to, ah, dissuade the execs from suing.
3. Also, you're confusing The Fed (aka the Federal Reserve, our central bank) with the Federal Government (our government, the Congress, the Executive branch with its various departments like the Treasury Dept, and the courts). The Fed is a vastly different beast from the Federal Government, with different powers, mandates, and accountabilities.
1. They threatened to force them through regulation, I read the papers.
2. Like I said, a conservative group could claim damages and sue if it were such an obvious case. I can't argue specifics about it because I am not a scholar of financial law and regulation.
3. No, I am not. When I say The Fed I mean the whole government, and the central bank. For the sake of this discussion I have not felt the need to differentiate between the people controlling TARP, the people regulating banks, and the Executive branch since it is all so intertwined.