The $787 billion economic stimulus plan that passed the House and Senate contains a provision that would impose restrictions on executive bonuses at financial institutions. The provisions would prohibit cash bonuses and almost all other incentive compensation for the 5 most senior officers and the 20 highest paid executives at large companies that receive money under the TARP program, the New York Times reported.
The provisions was written by Democratic Senator Chris Dodd and would bar top executives from receiving bonuses that exceed 1/3 of their annual salary. Bonus money would have to be in the form of long term incentives, like restricted stock, which cannot be cashed out until the TARP money is paid back in full. The new rules will help ensure that taxpayer dollars non longer effectively subsidize lavish Wall Street bonuses Dodd said. The top economic advisers to President Obama opposed the pay restrictions.
I believe that Dodd's provision and the Democrats willingness to embrace this common sense approach captures the feeling of the people concerning Corporate greed and the need to control this transfer of wealth. It should be noted that only 3 republican Senators voter yes for the economic stimulus plan while all republicans in the House voted No.
President Obama and those that voted for the plan were willing to face the severe problem the economy is in and take action they believe was required. Future action by the President and congress should be progressive and tackle those problems that have been left to fester by the previous administration.
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