Wall Street adds insult to injury
Bailed-out bankers don't deserve million-dollar salaries, no matter how much they complain about limits on executive pay
Dean Baker
The Guardian
Most people would have little difficulty getting by on $200,000 a year. Most people who had badly messed up on their job and put their employer in bankruptcy would be absolutely delighted to find themselves still earning $200,000 a year. That's not the way it works on Wall Street.
When Kenneth Feinberg, Barack Obama's compensation tsar for bailed out companies, issued his edicts last week on executive compensation, it prompted howls of outrage in the financial industry. The New York Times quoted one person who it identified as being "close to the board" at AIG as saying that the pay caps that Feinberg imposed were "insulting".
The specific pay cap in question was a limit of $200,000 on the salaries that could be paid out by the financial products division of AIG. This was the division whose shenanigans bankrupted the company and required a $170bn infusion from the government. This limit also only applied to cash compensation. AIG could still pay out five or 10 times this amount in stock. And, the limit just applied to 2009. Who knows what these high rollers will earn in 2010?
(More here.)
Dean Baker
The Guardian
Most people would have little difficulty getting by on $200,000 a year. Most people who had badly messed up on their job and put their employer in bankruptcy would be absolutely delighted to find themselves still earning $200,000 a year. That's not the way it works on Wall Street.
When Kenneth Feinberg, Barack Obama's compensation tsar for bailed out companies, issued his edicts last week on executive compensation, it prompted howls of outrage in the financial industry. The New York Times quoted one person who it identified as being "close to the board" at AIG as saying that the pay caps that Feinberg imposed were "insulting".
The specific pay cap in question was a limit of $200,000 on the salaries that could be paid out by the financial products division of AIG. This was the division whose shenanigans bankrupted the company and required a $170bn infusion from the government. This limit also only applied to cash compensation. AIG could still pay out five or 10 times this amount in stock. And, the limit just applied to 2009. Who knows what these high rollers will earn in 2010?
(More here.)
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