All American Blogger » Obama Wants Say in Executive Compensation

Obama Wants Say in Executive Compensation

Posted by Duane Lester on Feb 4th, 2009 • Clicks

Is there any doubt the government has become too large, too intrusive, and too powerful? Oh yeah, and oblivious to what is meant by “limited government?’

If there is, this should eliminate it.

Following in the footsteps of Obamaton Claire McCaskill, (D-MO), Obama wants the power to tell executives in private companies how much the can be compensated for their work:

Under the president’s plan, companies that want to pay their executives more than $500,000 will have to do so through stocks that cannot be sold until the companies pay back the money they borrow from the government, according to administration officials.

The restrictions will most affect large companies that receive “exceptional assistance,” such as Citigroup. The struggling banking giant has taken about $45 billion from the government’s Troubled Asset Relief Program.

When McCaskill introduced her idiotic bill, I wrote the following:

Look at it like this: a struggling company won’t be able to pay top dollar to the people who are steering the helm because they are hurting so bad they had to get a bailout. Now why, if you were part of this company, would you stay on in a position that paid far less than you could get somewhere else? How are businesses like this supposed to attract the best help? That’s why the best minds are in business and not government.

I wrote that on January 31st, a Saturday. On the following Monday, Neal Boortz wrote this:

OK … let’s try to noodle this thing through a bit. Let’s say that congress passes a law which caps executive compensation at $400,000 a year for any company receiving bailout funds. Now these companies are in trouble. There have shareholders and employees who are looking to corporate leadership to save their jobs and their investments by turning their companies around and putting them on a path to profitability. The chief executives of these companies are going to have to be experienced and knowledgeable innovators. They will be making decisions that are difficult to the extreme. People with these executive skills are in high demand. There are headhunting firms out there who earn hundreds of thousands of dollars from just one company find just the right person with the right combination of experience and executive talent to lead. People with this talent don’t go cheap … and they certainly don’t go for $400,000 a year.

So McCaskill gets her executive compensation limit … and what happens? Qualified executives run like hell for the companies that aren’t receiving bailout money. Why go through the anguish of working under close government control and interference while trying to turn around a company in dire trouble for $400,000 a year, when you can take a job with a company that it doing just fine outside of all of this government interference for three times that much?

Am I saying that Neal Boortz’s reads All American Blogger and then echoes my writing on his blog? Not at all.

I’m saying that Neal Boortz is a freaking genius.

This is so obvious that anyone should see the effects it would have on any business that has taken bailout money.

And here’s something else to ponder. Is it really right to give money to a private entity, and then later change the terms of the deal? How can you make a deal with someone, then change the deal to give yourself more power? That sounds like something the mafia would do, doesn’t it?