So who would have his compensation limited? According to Bloomberg, the top 20 most paid employees would have their compensation restricted.
Restrictions would apply to senior executive officers and the next 20 highest paid employees at companies that receive more than $500 million from TARP. Companies receiving between $250 million and $500 million would face restrictions on their senior executive officers and their next 10 highest-paid workers. The limits would apply to the top five employees at companies receiving between $25 million and $250 million.This sound quite ridiculous to me. How are these figures decided? Why? But hold on, there's even more ridiculous provisions:
Company-wide policy regarding excessive luxury or expenditures? How do you define them? Is it the role of the government to interfere as much with what companies should be doing? It feels like being in France again! Shouldn't the shareholders (the real owners of the company) be deciding? Or does the state need to decide for them, like in a good fascist economy?
The plan requires TARP beneficiaries to create a company- wide policy regarding “excessive or luxury expenditures” such as corporate jets, entertainment and “other activities or events that are not reasonable expenditures for staff development.”
Also, what does "ban any compensation that would encourage manipulation of the reported earnings" mean? Aren't some compensations built around the profit they generated? The income sales people brought in? Aren't they quantifiable? If yes, they are not manipulation. If not, well, they are not profits yet! So they should not give any rights to any additional compensation. Seems pretty easy to me. Oh yeah, but that guy, just sold for $50 million of CDO^2 and the profits (or rather losses!) will be known in 30 years only. So what do we do now? Well, maybe the problem is the product itself? Or maybe the problem is that compensation plan is bound to the current year only? But that's not manipulation from the salesman in any way!
It bans “any compensation plan that would encourage manipulation of the reported earnings” of TARP beneficiaries in order “to enhance the compensation of any of its employees.”
But wait, there's still more absurdity and hypocrisy:
New restrictions on executive pay at U.S. banks receiving federal aid may cause talented managers to flee to hedge funds and foreign-owned banks, say critics of the measure. [...] “Non-TARP companies, like hedge funds and foreign firms, don’t have this restriction, so it will be easier for them to hire the top producers away.”So, not only has the debate moved to "How much should we compensate incompetent and fraudulent top-executives who made their companies collapse" from "The top executives should be fired and maybe even sentenced". So now, instead of firing them, let's just limit their pay to $500,000. It's a wonderful world isn't it?
Then "talented managers could flee to hedge funds and foreign-own banks"? Where are these talented managers? Are we talking about the same who made their companies collapse? Those would were just riding the wave with high leverage and got crushed against the wall? And non-TARP companies don't have the same restrictions??? So what is that guy asking for? Not only that the failed companies are saved with public money, but that those who didn't fail, not receiving any free money should also be imposed restriction??? I am really really not-chocked I must admit. I couldn't expect less from these people anyway.
And then, on another report, Bloomberg points that:
Treasury Secretary Timothy Geithner and Lawrence Summers, Obama’s top economic adviser, sought modifications in Congress’s proposed executive compensation provisions, an administration official who requested anonymity said yesterday.Again, no surprises coming from top fraudster Geithner and Summers...
Do never forget that all these people are here to robe the people blind. Nothing less, but maybe some more to come who knows...
[Update] Mish published an opinion which goes in the same direction:
Geithner Plan Inspires Mistrust
How can there possibly be any trust in a system that may or may not be taken over by the government, under unspecified conditions, with unspecified strings, when there is no transparency as to what is happening anywhere along the line?
I have no problem with the audit. I have a massive problem with Geithner's intention to hide the results and I have a massive problem with squandering taxpayer money to bailout banks whose greed was a big part of the problem. Shareholders and bondholders of failed institutions should be wiped out and management of failed banks should be fired and replaced with executives of banks that avoided these problems.