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Obama caps executive salaries for firms accepting loan money


The $500,000 limit is a far cry from the tens of millions of dollars paid to some execs

The $500,000 limit is a far cry from the tens of millions of dollars paid to some execs

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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 report.

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.
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Comments (5)
  1. I think this is good, they better not whine because I'm sure millions of Americans would LOVE to get "just" $500,000 a year.
     
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  2. haha go obama! thats a great idea, im sure people will whine.. so hopefully this plan works =].
     
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  3. Good, to bad it only applys to companys barrowing tarp $
     
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  4. hummmm does that include stocks and bonuses? or is that just their salary that is to be capped?
     
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  5. Ummm the cap isnt going to make much difference to a guy who in the previous year earnt well over $20million.

    same sort of thing those guys saying they will only recieve $1 salary. Good for them, they dont pay taxes on their earnings and can live off their ridiculous bonuses.
     
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