Obama Ally Introduces Bill to Cap Salaries of CEOS from TARP-Receiving Companies

Jan 30, 2009 5:15pm

At the Senate today, Sen. Claire McCaskill, D-Mo., introduced legislation to cap the salaries of executives from companies that received federal bailout funds. The limit applies to salary, bonuses and stock options, and is set at the amount of money earned by the president of the United States: $400,000.

“Going forward, if you want taxpayers to help you survive, if you want the people at your financial institution to have a job tomorrow, then you’re going to have to limit everyone’s pay at your company to the same salary that the president of the United States makes,” said McCaskill, a co-chair of President Obama’s campaign. “Now once they’re off the public dole, once the taxpayers aren’t footing the bill, then it’s not as much our business what they get paid. But right now they’re on the hook to us. And they owe us something other than a fancy waste basket and $50 million jet.”

McCaskill was responding to news — first reported in The New York Times — that Wall Street executives in 2008 paid themselves $18.4 billion in bonuses — the sixth largest such raking in recorded history, according to the New York State Comptroller’s office, despite the financial sector’s abysmal year.

You can read McCaskill’s bill — the Cap Executive Officer Pay Act of 2009 — HERE.

Asked about McCaskill’s move today, White House press secretary Robert Gibbs said he didn’t want to "get ahead of what the team and the president will decide to make part of the next round" of funds allocated under the Troubled Asset Relief Program funds. That said, Gibbs added that "it is very safe to assume that, when a plan is outlined for financial stability, that it will include and address executive compensation and bonuses."

President Obama found the news about the Wall Street bonuses "outrageous," Gibbs said. "I think many of you have covered him. I’ve seen him upset at times. He doesn’t really get fired-up upset. He’s more like that disappointed parent, you know, that doesn’t embarrass you in the mall, but you feel like you’ve let somebody down. So I think yesterday, when you see something like that from the president, I think you can understand that that was from his gut and that was real. Nobody begrudges people that are successful and make money. Somebody who’s running a very successful company that’s making its shareholders money and serving the American people responsibly, nobody would begrudge that happening. But when the sixth-largest year of bonuses fails in any appreciable way to match the huge losses, I think ‘outrageous’ is probably just the beginning of words one might be able to intone, particularly if we’re on TV."

– jpt

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