Senators Hit CEOs Where it Hurts ... Try to Cap Bailout Pay
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Executive compensation experts with the Institute for Policy Studies (IPS) are applauding a new Senate bill that would crack down on bailout profiteering.
The just-introduced legislation from Sen. Claire McCaskill (D-Missouri) would cap executive pay in bailed-out firms at no more than $400,000 -- the salary of the President of the United States. McCaskill introduced the bill on January 30, after revelations that Wall Street firms handed out more than $18 billion in bonuses last year.
"This bonus bonanza should put an end to the naïve notion that we can rely on Wall Street to voluntarily do the right thing," notes IPS analyst Sarah Anderson. "If Congress doesn't start legislating strict and measurable pay limits, taxpayers will continue to watch their money flood into executive pockets — and encourage still another round of reckless Wall Street behavior."
"Here today, in the midst of our worst economic crisis in 80 years, we have far too many executives worried about how many zeros sit on their paychecks," agrees IPS Senior Fellow Chuck Collins. "It's our government's job to give these execs a reality check and protect ordinary taxpayers from this runaway greed."
President Barack Obama has condemned Wall Street's latest bonuses as "shameful," but officials in his administration have so far declined to support a cap on total compensation for all bailout executives.
According to news reports, Treasury Secretary Timothy Geithner is planning to issue new pay guidelines this week that only cover a small handful of bailout recipients and do no more than tighten rules on severance and bonus pay.