The $500,000 limit is a far cry from the tens of millions of dollars paid to some execsEnlarge Photo
President Barack Obama today tied another string to the money received by GM and Chrysler, setting a cap of $500,000 on executive salaries for companies in receipt of taxpayer funds. The move is likely to prove popular with the public, which often perceives corporate executives as overpaid.
The salary limits also apply to Wall Street businesses that took bailout money, perhaps further securing a positive public sentiment by limiting the further damage that can be done in the financial sector. But it's not yet clear what impact the decision might have on those that run the companies.
"In order to restore our financial system, we've got to restore trust. And in order to restore trust, we've got to make certain that taxpayer funds are not subsidizing excessive compensation packages on Wall Street," said Obama, according to a Reuters
All three of the Detroit carmaker's CEOs claimed they were on board with taking a $1 salary
if it would help their companies secure federal funding, however, so it's unlikely that either Chrysler CEO Bob Nardelli or GM CEO Rick Wagoner will complain about the decision. Ford CEO Alan Mulally so far isn't subject to the salary cap thanks to the Blue Oval's refusal of government funds.
At the same time that Obama is seeking to assuage the public's fears that the tax money behind the Wall Street and carmaker rescue plans is going to waste, he is also pusing hard to get a $900 billion stimulus bill through Congress, a portion of which will fund an incentive to help boost sales of new cars.