WASHINGTON (CNN) – Executives of companies receiving federal bailout money will have their pay capped at $500,000 under a financial compensation plan that President Barack Obama is expected to announce Wednesday, two senior administration officials said.
Obama himself alluded to a change in executive salary in an interview with CNN's Anderson Cooper Tuesday night.
"Tomorrow I'm going to be talking about executive compensation and changes we're going to be making there," he said. "We've now learned that people are still getting huge bonuses despite the fact that they're getting taxpayer money, which I think infuriates the public."
Under the president's plan, companies that want to pay their executives more than $500,000 will have to do so through stocks that cannot be sold until the companies pay back the money they borrow from the government.
The restrictions will most affect large companies that receive "exceptional assistance," such as Citigroup.
The struggling banking giant has taken about $45 billion from the government's Troubled Asset Relief Program.
Last month, the bank reversed plans to accept delivery of a new $42 million corporate jet, after Treasury Department prodding.
The new rules also will mandate that shareholders of banks have a greater say about the salaries paid to company heads. The measures will put in place greater transparency for costs such as holiday parties and office renovations.
Institutions that are financially healthy - and receive more generally available government funds - can waive these requirements if their shareholders vote to do so, according to the plan.
Last month, Obama ripped Wall Street executives for their "shameful" decision to hand out $18 billion in bonuses in 2008.
The president said it was the "height of irresponsibility" for executives to pay bonuses when their companies were asking for help from Washington.
"The American people understand we've got a big hole that we've got to dig ourselves out of, but they don't like the idea that people are digging a bigger hole even as they're being asked to fill it up," he added.
Congress also was furious, with Sen. Claire McCaskill, D-Missouri, introducing legislation to cap compensation at bailed-out companies to no more than the salary of the U.S. president.
Obama's annual salary is $400,000.
"We have a bunch of idiots on Wall Street that are kicking sand in the face of the American taxpayer," an enraged McCaskill said on the floor of the Senate on Friday. "They don't get it. These people are idiots. You can't use taxpayer money to pay out $18 billion in bonuses."
I don't understand why the stimulus must be a huge all inclusive approach versuses a targeted collection of stimulus bills for each appicationagreed upon by all parties. IE. extend unemployment benefits bill, federal tax withholding holiday, school lunch program, state funding loans, etc.... It seems by tackling one piece at a time, something could be accomplished by simplifying the complicated!!!
"Infuriates".... describes it pretty accurately I do believe.
I think that $500,000 annually is sufficient pay for anybody in any position. That's $240 per hour, and I have a feeling that every corporation can find someone who will take the position and do a good job. How many houses and cars does a successful person need in a world where children are starving, elderly people cannot afford medicine, schools are crumbling, and workers cannot find jobs.
The myth that corporations cannot find a competent CEO for less than $25 million is propagated by those same CEOs, who essentially set their own salaries in accordance with the size of their egos.
Perhaps the minimum wage should be accompanied by a maximum wage. I think so.
Just another cue for the opposition to scream "socialism" without bothering to educate themselves on ANYTHING related these issues that are weighing down our nation...
WONDERFUL!!!! After watching President Obama last night on Anderson Cooper, I'm falling more in love with this very human, real President!!!! He truely understand how important it is to get REAL jobs back in our country!!!! AND what may be someone's Pork(National Parks, etc) May just be someone's JOB!!!!! God BLess our President and his team!!!
I wonder how the scumbag republicans will twist this one.
This is bull! Any company receiving taxpayer money to sustain itself should pay their administrators, those responsible for this mess, minimum wage. If its good enough for millions of those taxpayers, then its good enough for these scumbags. Its either free market, or it government run, you can't have your cake and eat mine too!
GREAT, WONDERFUL ABOUT TIME. But why can't it include the banks that already received the money? The banks and insurance companies that has received money are still planning those expensive trips.
I hope the GOP will support this move because that is the only way to send the right message.
Good job Mr. President!
Notice the small print that companies can waive these requirements- can you say more exemptions to the rules.
I think it says ALOT about the repukes in congress, they are FURIOUS that a democrat said cap all the CEO salaries to 400K. WOW! And I just HAD to comment on the last thing about the President and First Lady reading the the kids in the charter school. SO many IDIOTS commented that his kids were to good for public school. HES THE PRESIDENT YOU MORONS!!!! NO way could his kids or the kids there be safe! You people KILL ME! HAHAHA! Wow if this man was to save a child from drowning, the right would say, he just did it for a stunt! He is doing a great job, and 72 MILLION people STILL think so!
Before you force people to limit their salary potential...the ones who actually run a company and keep average Americans employed, you should...
...have all of your administration and all those you want in your administration PAY THEIR TAXES.
It sounds simple, but if 100 million taxpayers decided to have some simple mistakes on thier filings over the next two years, you would not be able to employ the guy who washes the windows, that you mistake for doors.
Good. Obviously the banks just do not get it or just do not care. I hope the Gov. try getting the bonuses back. The bank's cry that they needed to give the bonuses to keep good people seems a bit empty to me because if theses guys were the best then how come we are in the mess we are in. Answer: Greed.
Why was congress furious with Mccaskill? They are a bunch of idiots and the repubilicans are a bunch of idiots too. Obama inherited this mess the repubs started this mess with GW and now the stupid repubs are giving Obama a hard time because they are stuck in the the old mind set of GW. Obama needs to say to hell with them and stop trying to include them, the country is getting worst every day and they are fighting our president every step of the way.
$500,000 seems reasonable. Companies faced with the need for Government bailout have some, no all, executives that failed in their jobs. Limits on all executive compensation for these companies will help toward making the request for funds from the Government a last resort rather then an easily acquired cushy cushion should the risky practices of a few of the execs fail.
That's what Im talking about. If you don't like it, pay the government back and become a "private" company again.
MR. PRESIDENT IS ABOUT TIME OR YOU TO PLAY HARDBALL. THE REPUB. PTY IS ONLY OUT TO MAKE YOU LOOK BAD AND MAKE AN ATTEMPT TO DESTROY YOU. THEIER ONLY DESIRE IS TO PUT MORE MONEY IN THEIR POCKETS AND MAKE THEIR RICH FRIENDS RICHER.
THEY DO NOT PUT AMERICA FIRST, ONLY THEMSELVES. JUST LOOK AT THE PAST EIGHT YRS. THEY ARE A GREEDY LOT.
CITIZENS OF AMERICA PLEASE SUPPORT OUR NEW PRESIDENT WHO HAS YOUR BEST INTEREST AT HEART, BELIEVE ME.
CNN STOP HARPING ABOUT DASHLE AND YOUR NEGATIVITY. OUR PRES STILL HAS A HIGH APPROVAL RATE.
Fascinating. This a bold move to curb blatant fiscal abuses. It is a particularly bold move by someone that nominated a tax cheats to head the Treasury Department, Health and Human Services, and the newly formed "Accountability Office".
Lets get the untaxed money out of their offshore accts.They have trillions stashed away.We can solve our finances in a few days.
Any executive of any organization that receives ANY of this handout should have his/her salary, including bonuses, limited to $1.00 per year until every penny of it has been paid back.
This money has been confiscated from those who worked to earn it, it is NOT Free Money From Heaven!
Compensation packages should be capped. Delete the bonuses until they manage their company back into profit and payback the bailout.
Now Senator McCaskill should also address her "stupid" colleagues in the political arena for not paying taxes.