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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.
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Numerous states and cities across the country decided during last weeks midterm elections to raise their minimum wage, which has legal and retail employment experts predicting changes to other benefits could occur as a result.
The President, Washington lawmakers and state legislators are all trying to chip away at the backbone of employee retirement benefits. Benefits managers hoping to reinforce the successes of their 401(k) programs need to take action now to help protect the system.
Pressure is growing to change incentives for retirement savings as U.S. lawmakers look for revenue, and top earners may pay the price.
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….
