Caps are a misguided attempt to ensure accountability. They do nothing to ensure pay back since A) many of these executives can leave and get non-exec jobs; B) many of the institutions may still fail; C) there is no tie to specific performance that ill ensure payback is made in a responsible manner.
A better solution would be to tie compensation to specific goals. The goals should be relevant to the institution. Each of the TARP recipients needs to do something different to get back into the black. Some of them will need months, others will need years.
Delaying final payout until money is paid back (either in steps or in full) is a good idea. Limiting pay until that occurs serves to purpose other than to calm our rancor and put balm on our wounds.
The best solution is seldom the easiest solution. The easiest solution is often the one that can be put into a last minute amendment to a government bill. Many of the people who approved this bill, or signed it made much more than $500,000 in recent years. Few of them have anything truly positive to show for it (other than owning nice "stuff".)
We need to be careful not to whiplash from one very bad situation to an opposite and equally bad situation.
Just some of my thoughts on this...
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