While some -- I admit, myself included -- hailed President Obama's recent edict that executives at companies receiving federal bailout money will have their compensation capped at $500,000, not everyone thinks the limits are a good idea.
Perhaps you're thinking, surely I jest? But no, Edward R. Rayner, a partner in the employee benefits and executive compensation practice at Katten Muchin Rosenman LLP in New York, says these limits may actually further harm the U.S. financial system.
"While at first glance, this may appear to be an important crackdown on the greed of recent years, the fact that the $500,000 cap only applies to companies accepting U.S. bailout money is a huge issue," Mr. Rayner says. "This opens the door for foreign institutions not subject to these compensation limits to quite easily and relatively cheaply, steal our best financial talent. Once this talent is gone, it will be extremely difficult to get back, and I expect that this will significantly weaken the U.S. financial industry."
Amid the deepest economic recession in decades, with millions jobless, Rayner is opposed to capping the pay of bank execs that are relying on taxpayer dollars to re-stabilize their institutions? What do you think? Do you agree or disagree with Rayner? Comment and let me know.
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