Bad news today for executives who thought that taxpayer bailout money was meant for their personal gratification: President Obama has instituted a salary cap of $500K for executives at any company that’s to receive substantial government aid.
Obama also announced that he’s putting the kabash on cash bonuses, noting that any future bonuses will have to be paid in stock that can’t be cashed out until the government loans are paid. And just to be Grinchy about things, he’s demanding that these companies make public “all the perks and luxuries bestowed upon senior executives, and provide an explanation to taxpayers and to shareholders as to why these expenses are justified.”
No word on whether the employees of AIG have submitted doctor’s notes about needing massages and golf games to alleviate the stress of working for a financially insolvent company.
Obama describes this move as “basic common sense.” This phrase is slightly different than, say, words that have been applied to the $25 million bonus package for Peter Kraus. Kraus received this bonus for the whole 3 months he spent at the failing Merrill Lynch before it was “bought out” by Bank of America, who in turn went to the federal government for bailout money to help with troubled assets. Like the ones they just bought from Merrill Lynch.
The best summation of Lynch’s package is: “The master bedroom suite is a private sanctuary on the corner of the apartment with two windows overlooking Park Avenue and a fourth wood burning fireplace.“ Which is of course why living on Park Avenue is expensive. In this case, Kraus’ new bonus-funded digs cost over $30 million.
Well, perhaps it’s nice to know that at least one American citizen is able to afford a new house despite being briefly out of a job.
Obama’s mandate was met with criticism from some Wall Street pundits who claim it will make it difficult for troubled firms to retain top executives. Others have noted that, were these executives doing a job worthy of 7 and 8 figure bonuses, perhaps their companies wouldn’t be failing in the first place. Obama himself noted that American citizens are rightfully upset at seeing top executives be “rewarded for failure.” And indeed, a simple search of our catalogue would indicate that Americans are fed up with the way the bailout money has been managed.
And so we award two Fantasy T-Wearer Awards today: the first is the “Good to be a Banksta” T-shirt above, which really does make a nice housewarming gift for Peter Kraus. And the second is the “Bah, Humbug!” T-shirt at left, which goes to Treasury Secretary Timothy Geithner in the hopes that his lighthearted wardrobe choice might lead some affected executives to turn those frowns upside-down.