Obama’s Pay Czar to Announce Exec Pay Cuts

Since when do American Presidents have anything to say about anyone’s pay ? This government looks more like the old Soviet Union leadership than anything I’ve ever seen in America. THINK before you vote.

What would happen if the companies don’t oblige?
Concerned in OH | Oct 22, 2009 11:43:16 AM
They do not have the right to not “oblige” their legal contractual mandate to a controlling owner. This isn’t rocket science here. They (who is “they” anyhow? Mr Bank Of America?) had the option to chose to go bankrupt, or to choose to fully repay the taxpayer (as JPMorgan and several others have, completely freeing them of their contractual obligations).

“I seem to recall Ronald Reagan flat out firing over 10 thousand air traffic controllers who refused a government mandated pay cut. But that’s just, you know, reality.”
Actually, he fired them for going on an unlawful strike. But leftists enjoy their own reality.

“I seem to recall Ronald Reagan flat out firing over 10 thousand air traffic controllers who refused a government mandated pay cut. But that’s just, you know, reality.”
Actually, he fired them for going on an unlawful strike. But leftists enjoy their own reality.
Fascist Hyena | Oct 22, 2009 11:59:38 AM
Right, and they were striking to get free coffee in the staff room. The strike was prompted by a dispute over pay. My point still stands.

“They do not have the right to not “oblige” their legal contractual mandate to a controlling owner.”
The government is majority owner in all 7 of those companies?
Concerned in OH | Oct 22, 2009 11:55:25 AM
The government is a controlling owner in all of those companies, based on the contractual agreement freely entered into by the majority owners (with some argument in the case of GM, where bankruptcy proceedings overrode a few who would have preferred liquidation and the elimination of hundreds of thousands of jobs).
Do you not understand the difference between “controlling owner” and “majority owner”? It’s been pretty well established by centuries of contract law. These companies entered into a contract with the taxpayers to avoid bankruptcy, it was an awfully good deal for them, and they have to abide by the terms of the contract.
If the companies don’t like it, they can repay the government and be free to overpay their CEOs to their hearts content (many large banks have done exactly that, returning the money to the taxpayer).

“He was appointed by the Secretary of the Treasury, “…
Oops, when he was appointed as the 9/11 overseer it was by the Sec of Treas. Not sure if Congress mandated a Sec of Treas appointment or not this time (I would assume they did, just don’t have the ref at the moment). But his position was defined by Congressional legislation.

Isn’t paying taxes great!!! It’s time for Obama’s supporters to join in the fun and show Joe Biden how patriotic they are!!! If you Obama lovers didn’t know it already, its perfectly legal to pay more than required on your tax returns. I suggest giving 90% of your salary to avoid being called a hypocrit by that mean old Fox News (known as Faux News to some of you) and those ugly right-wing extremists. What’d ya say!!! Let’s support our dear leader!!!!

“My point still stands.”
Right. So a guy kills his wife because she burns the toast; he gets life in prison for not liking burnt toast.

Cutting these people’s pay will do nothing but send them out into a marketplace where they can make many times what the Tsar allows. And the Tsar will replace them with people who can’t do better elsewhere. This is not at all difficult to understand.

He was appointed by the Secretary of the Treasury, who has been confirmed by the elected Congress, to fill the role defined in legislation written by the elected Congress. This is how the government works.
Posted by: jhw539
My issues with ALL the “czars” put forth by Presidents of Both Parties!
Idiots like Van Jones are EXACTLY why simple appointments are wrong!
I dont give a rat’s @ss WHO appoints them, this foolish administration has PROVEN they either dont have a clue HOW to vet these people, or they simply DONT CARE!

To be honest, if you believe in “pay for performance/non-union” how can you not agree with this??? Stock options, in place of enormous bonuses, based upon how well the company does…seems reasonable to me….I believe in stock options for EVERYONE who works within the company based upon that individual’s contribution….Why Not???? Time to get your hands dirty as well…..

“I seem to recall Ronald Reagan flat out firing over 10 thousand air traffic controllers who refused a government mandated pay cut. But that’s just, you know, reality. Posted by: jhw539 | Oct 22, 2009 11:54:37 AM” They were Federal employees and it was not a pay cut and it was against the law for them to strike!
As federal employees the controllers were violating the no-strike clause of their employment contracts. In 1955 Congress had made such strikes a crime punishable by a fine or one year of incarceration — a law upheld by the Supreme Court in 1971. Nevertheless, 22 unauthorized strikes had occurred in recent years — by postal workers, Government Printing Office and Library of Congress employees, and by air traffic controllers who staged “sick-outs” in 1969 and 1970.
Negotiations between PATCO and the Federal Aviation Administration (FAA) began in February 1981. PATCO president Robert Poli demanded an across-the-board wage increase of $10,000/yr for controllers whose pay ranged from $20,462 to $49,229; the reduction of a five-day, 40-hour work week to a four-day, 32-hour work week; and full retirement after 20 years service — a package with a $770 million price tag. The controllers argued that they deserved these considerations due to the highly stressful nature of their very important work. The federal government balked at these budget-busting demands of more money for less work, well aware that other federal employees were likely to take action to improve their lot if PATCO succeeded. The FAA made a $40 million counteroffer which included a shorter work week and a 10 percent pay hike for night shifts and those controllers who doubled as instructors. Further negotiations between Poli and Transportation Secretary Drew Lewis sweetened the pot even more. Nonetheless, 95 percent of PATCO’s membership rejected the final settlement. The FAA began work on a contingency plan that would go into effect if a strike occurred.
Those are the Facts!

Wooo hooo! Smaller paychecks means paying less money in taxes. That translates into smaller income tax revenue for states struggling to balance their budgets and less revenue for the IRS. Good move pay czar! Why would we want these executives paying double, triple or even quadruple income tax revenue? Smaller income = smaller income tax obligation.

OH…Ya, I can understand that point as well, putting trust in this Administration’s agenda is a hard thing to do…It’s so unclear as to their motives????

It seems the right move, monumental failure should not be rewarded with astronomical bonuses, salaries and perks paid out of the taxpayer’s pocket.

It seems the right move, monumental failure should not be rewarded with astronomical bonuses, salaries and perks paid out of the taxpayer’s pocket.
Posted by: julieterra | Oct 22, 2009 1:57:04 PM
**
I agree. If they don’t want their pay cut, then they can pay back our money.

“It seems the right move, monumental failure should not be rewarded with astronomical bonuses, salaries and perks paid out of the taxpayer’s pocket.
If their bonuses are slashed, they’ll cease working there, and they’ll be replaced by third-rate talent that can’t make it anywhere else. OK by me.

People on this message board, while applauding the Obama administration for this move, seem oblivious to the fact that the good people in the American banking sector, the ones who should be leading this country out of recession, will still make their multi-million dollar salaries – they will just do it out of the country, in other burgeoning markets like Brazil, Hong Kong, even London. Banks in those country have been actively recruiting these good, talented people away. While the good people leave the American system, we are stuck with the less-talented folks who the other banks – the ones the American government can’t touch – don’t even want.
Keep applauding moves like this one and someday you’ll be telling your children what a great country America once was. You’ll spin wild tales about how America was once the top of the economic market and a force to be reckoned with. Today’s problems will seem quaint.

Monumental failure at the executive level should not be rewarded with astronomical bonuses, salaries and perks paid out of the taxpayer’s pocket.
When the executives create ‘profit’ for their companies – let them then benefit. When the company, and the investors and taxpayers suffer – no grand benefits off of taxpayer’s money. That type of ‘nanny-state’ we can do without, and we will.

“The job market demand for executives who bottomed out their companies might not be as wide-open as you seem to think.”
I don’t think, and haven’t said, that it’s “wide open.” I am very confident that the great majority of those executives can and will do better in the market than in their current positions, and am even more confident that anyone who replaces them at these new salary levels will be ill-equipped for the task.

“Monumental failure at the executive level should not be rewarded with astronomical bonuses, salaries and perks paid out of the taxpayer’s pocket.”
How about at the congressional level? Dan Rostenkowski is drawing over $100,000 a year for life, even though he did hard time in prison. And it’s all at taxpayer expense.

June 10, 2005
“President Bush could be exposing taxpayers to tens of billions of dollars of losses, luring thousands of low- and moderate-income people to the heartbreak of losing their first house, and risking wrecking entire neighborhoods. Bush’s housing initiatives — especially his “American Dream Down Payment Act” to give free down payments to selected home buyers — were key planks in his reelection campaign. He is also pushing Congress to enact a law to permit the feds to give zero-down-payment mortgages.”
Free down payments, zero-down-payment mortgages – from Bush, not Barney Frank.

“The government needs as much income tax revenue as possible — more tax revenue is generated by higher incomes. Reducing people’s salaries equals reducing their tax obligation.”
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Not when the salaries are being paid with taxpayers’ bail-out money floating the company.
Monumental failure at the executive level should not be rewarded with astronomical bonuses, salaries and perks paid out of the taxpayer’s pocket.

Not when the salaries are being paid with taxpayers’ bail-out money floating the company.
Monumental failure at the executive level should not be rewarded with astronomical bonuses, salaries and perks paid out of the taxpayer’s pocket.
Posted by: julieterra
So you, personally have examined the accounting and annual reports of these companies and know first-hand that the salaries are being paid with TARP funds – not funds earned through the course of business? Because, it was my understanding, from looking at some of these bank’s annual reports (public records) that TARP money went to another purpose. Which bank’s annual reports and records did you look at to come up with this belief that they are using TARP money to pay salaries?

Posted by: me | Oct 22, 2009 3:50:04 PM
If corporations floated by taxpayers’ money want to pay astronomical salaries and bonuses – pay back the taxpayers’ money, and then go ahead.
Monumental failure at the executive level should not be rewarded with astronomical bonuses, salaries and perks paid by money from companies kept afloat by taxpayer’s pocket.

Anybody who can’t afford a down payment (and needed the Bush government to use taxpayers’ money to pay it, or excuse the need for it) is an unqualified buyer.
Julieterra and her complete lack of intelligence and real world expereince at it again!
MANY people could afford the monthly payments, because they were aready paying rents as high or higher than mortgages. The problem was they could not put away the required 10 or 5 % depending on where they were going for the loans!
Hence they were indeed QUALIFIED to REPAY the Loans!
Please get at least a rudimentary grasp of history and the way things work in the world away from the liberal rose colored glasses

I’ll tell you where I come out on this pay thing, for whatever it’s worth.
Most government employees’ compensation is set by congress. Some (like the air traffic controllers) belong to unions, and per longstanding federal law their wages, hours and working conditions are established by collective bargaining with their employee, the government.
These executives are in neither category. However, the seven companies are to varying extents owned by the taxpayers, acting through the executive branch. Normally in corporate governance executive pay is set by the board of directors, who serve at the pleasure of the shareholders. Depending on the corporate by-laws and the laws of the state of incorporation, it takes varying percentages of stock ownership to get a controlling interest on the board.
I assume, though I do not know, that in each of the seven cases the taxpayer/government owns a large enough percentage of the shares to control the board, and thus to set compensation.
So while I am troubled by the bailout of these companies–particularly the automakers–in the first instance, having got where we are I have no quarrel with the president’s designee exercising the power that Feinberg is exercising. But I should point out that the huge salaries and bonuses already paid to the executives who brought on the disasters will not be recouped; the salary limits are prospective only. And I would point out further that they may very well not be paid to the people who failed; they will be paid to whomever occupies those positions, regardless whether he or she had anything to do with the failure. Feinberg himself stresses that there is nothing punitive or vindictive in the pay scales he has announced.
He says that instead, he has set pay at levels that he believes will maximize the companies’ abilities to repay the taxpayers. I have serious doubts that he has set them appropriately for that purpose, but I defer to his expertise and in any event I don’t dispute at all his authority to do it under the law.

What has happened to the belief in a free-market capitalist system. These companies are like a sinking ship and the government is telling these all-important executives to bail water with a sieve. Why is it that when politicians get to Washington they think they can part the seas and restore the fortunes of the nation, when this is entirely dependent upon the efforts of hard-working entrepreneurial capitalists in private enterprise.