Wednesday, February 4, 2009

Obama makes CEO's accountable

The Barack Obama administration is planning to cap the pay of the top executives before announcing the $700 billion financial bailout. Under this any company which seeks a bailout cannot pay more than $400,000 in total compensation to any of its top executives until it refunds the bailout money to the government. The logic applied by the Obama administration is simple, the tax payers money cannot be used to bail out companies whose top executives do not show any sense of responsibility.


There was an argument that it will have a negative effect in the industry with talented executives likely to stay from companies seeking bailout. Obama's chief economic adviser, Larry Summers has provided a solution that firms which plan to pay executives above the threshold can provide them with stocks which cannot be liquidated till the the time firm pays back the money to the government.


Taxpayers money in the form of loans at negligible interest rates cannot be given to allow CEO's to buy duplex apartments in Manhattan and chatter private jets. Jokes were running around that top CEO's would come in chattered jets to asking for a bailout. They would drink the most expensive wines and champagnes at regular parties which were never hit by recession.


It may come as a shock to many but in the past year when people were being fired from across sectors in the US a whopping $1.8 billion was pocketed by the top executives in the name of bonuses. Some of the people taking home this money included people from Lehman Brothers, Citi Group and AIG. How many job cuts took place at the executive levels to reduces loses? Well the answer is known to all.


So Obama's stand on the issue needs to be appreciated as he is willing to bail out the US economy but not by filling the pockets of CEO's with taxpayers money. Well it seems Obama is dynamic with the Presidency as he was with this Presidential Campaign.


1 comments:

moffyTOTS February 5, 2009 at 12:02 AM  

@They would drink the most expensive wines and champagnes at regular parties which were never hit by recession.

Dun care abt der 50 year old cognacs and stretch limos...fuckers get da hottest girls in town...buggers

And again..wat Obama's doin ain't nethin special...if u happen to recall Clinton's ways.Point is not everyone becomes a Presi owin to his/her daddy's powerful friends.

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