I'm thinking 'right or wrong' may not be the best assessment of this proposal.

There certainly is a precedent where, in the past, Government has imposed restrictions on the recipients of taxpayer money ... highway funds and the 55 mph speed limit come to mind ... although those recipients were States rather than private companies but the principle remains the same.

But then there is the Free Enterprise argument of the Government not meddling in the affairs of private concerns beyond the constitutionally mandated regulations for trade, etc.

However, as to what I believe is the proper assessment ... will it actually accomplish anything ... economically?

Or is it largely symbolic and intended more to appease the increasing segment of the population that believes very high paid CEOs should somehow be punished.

jeez...first time in nearly 5 years i've found myself agreeing completely with anthony r.

I heard an interesting argument this morning on the radio pertaining to this particular topic and one of the commentators made a lot of sense with what he said.

While the idea of capping salaries does not sound like a great thing when it's the Gov't doing because what is to stop them from wanting to cap other things such as prices, quality and production but, in the end we can not forget that these businesses getting this money are getting it from us taxpayers and I think some restrictions should exist to avoid repeating history. But what I thought was even more interesting is that by adding restrictions, some really strong one, these businesses might actulally consider the idea of not taking this money (since in reality they are not being forced to take it) because all the restrictions are not worth it and they will have to do better at keeping their businesses alive on their own. The Wells Fargo Las Vegas trip and Citigroup $50 billion jetplane are proof of things they should not be doing, especially with taxpayers money, that could help keep them from going under and survive this down time without any need of assistance from the Gov't.

Basically, you do it on your own, the right way and hopefully survive; you do it under Gov't funds, you do it our way and hopefully survive. I would rather not give them money but since they think they can have their cake (our money) and eat it to (continue with unnecessary expenses), I say offer the money but with some major restrictions. One commentator actually said rather tha a $500,000 cap for executives, they should put a $1 cap, like the guys from auto industries were willing to do. 1 year won't kill them right?

Take a look at what Barney Frank was proposing yesterday.  The ability for the government to expand salary caps on all companies!

http://www.financialweek.com/apps/pbcs.dll/article?AID=/20090203/REG/902039977/1003/TOC

Terp, I think most here are missing the cause of this problem. 

The board of directors for all large public companies determine what salaries are.  In my company the board are the one's that determine whether I get a bonus or not.  It seems to me that we are looking at the symptom and put a bandaid on it. 

Obama and others are talking about being "responsible" when it comes to these salaries of CEOs.  Why isn't anyone talking about replacing the board of directors, who agreed to a CEOs salary?  Why are they beating on the CEOs?  Unlike CEOs, congress gets to vote for their own raises.

With that said.....

If the government isn't smart enough to figure this out how can we expect them to wisely invest in struggling companies.  It seems they have a good record of finding ones that are mismanaging money (which would the reason why they are in their current state) and give them money.  Only later to complain that they are mismanaging tax payers money. 

The other problem is that the US's corporate tax is one of the highest in the world.  And we wonder why manufacturing businesses have moved out of country. 

Here is a good read LINK

This should be enough to waken a few?

Exactly!  Excellent points Adventure-Dude.

I think that is exactly it and everyone will suffer because what happened at Merrill Lynch (top execs immediately went elsewhere) is going to happen everywhere and there won't be anyone who knows what they're doing in charge.  That'll be great!

*steals play book from LW*

Do I get Karma? 

I agree also with Anthony. 

The scary thing tho is the government is getting their fingers into too many projects.

The government  will as a result of all these bailouts "own" the banks and the top three car makers.  Where is this going?  As it is now, the government is becoming the biggest employer in many states. 

That is very scary to me. 

I guess that depends on their motivation. You're a successful CEO - wouldn't you enjoy the challenge of turning around a once-failing company? The prestige alone would guarantee a healthy salary for your next role.

An idiot could have probably run the banks better than some of the most highly paid execs (since their low intelligence would have probably ruled out using any complex derivatives etc.), so the typical argument used in defence of high salaries (i.e. to get the best you have to pay the most) rings hollow after the mess they've caused.

If the government wants to cap the pay on bailed out banks etc., let them - at least it will act as a small incentive for directors to avoid needing to be bailed out. Also it's not like there are tonnes of jobs available in the investment banking sector at the moment, so I'd have thought quite a few people might just be glad at getting $500k for a mediocre job, rather than not having a job (due to the company failing in the absence of a bail out). Also as others have mentioned, turning around a failing company would do wonders for your future job prospects (and your own prestige), so there would be some reward there. Personally I think it would've been better if the government didn't have a bail out in the first place though - let the greedy execs lose their jobs, it's the very least that they deserve.

hell i'm all for long sentences and aggressive asset forfeitures for past wrongdoing but that ain't likely to happen.  any cap that can be implemented--even a far too generous $500k version--is better than nothing.  reducing the amount to the point where none of em could afford to commission loophole & workaround development teams would be much more effective.