I'm reading Dan Mitchell here, Cato @ Liberty about a running story today that executives from Citigroup, BofA, GM, Chrysler, GMA, AIG and others are going to see pay cuts this year. The enforcer of such cuts? Pay Czar Kenneth R. Feinberg. Mitchell cites a WaPo article -
NEW YORK — The Obama administration plans to order companies that have received exceptionally large amounts of bailout money from the government to slash compensation for their highest-paid executives by about half on average, according to people familiar with the long-awaited decision.Mitchell points out correctly that Americans have every right to be outraged at outrageous compensation at bailed-out firms. But what the press and most Americans don't realize is that this anger should be placed not on the shoulders of executives but the incestous big government/big business bailout relationship. High-pay execs are an easy target and a way to deflect attention from the real outrage and injustice. That being the bailout nation that redistibutes income, (through taxation and inflation), from the average taxpayer to firms that pols see fit.The administration will also curtail many corporate perks, including the use of corporate jets for personal travel, chauffeured drivers and country club fee reimbursement, people familiar with the matter have said. Individual perks worth more than $25,000 have received particular scrutiny.
The glee at which many pols express at having the ability to cut exec pay tells the entire story. How are such firms that ostensibly need to pay the taxpayer back, (I know, it will never happen), expected to do so when Uncle Sam is hovering like a vulture and scrutinizing pay? You tell me. Bigger things are at play here, there is more than meets the eye......
UPDATE: WaPo has a story up pointing to the fact that top talent was already exiting firms that are facing pay cuts. WaPo -
Many executives were driven away by the uncertainty of working for companies closely overseen by Washington, opting instead for firms not under the microscope, including competitors that have already returned the bailout funds to the government, according to executives and supervisors at the companies.
On Wall Street, reaction to Feinberg's ruling was swift, with some executives arguing that it will further handicap the most troubled firms by driving away top employees while making companies unwilling to promote rising stars for fear of bringing them to Feinberg's attention.
In my honest opinion, this is just another example of the ''we don't want to run the car companies" Obamanation schtick, only to turn around when the opportunity was presented and put bondholders at the back of the bus, rewrite contract law and insert coercive Union interests.
Via Memeorandum
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