Salary caps for bailout CEOs

POLITICS - At the White House today President Barack Obama has imposed salary caps of $500,000 USD caps on senior executives at distressed financial institutions receiving federal bailout money, saying Americans are upset with "executives being rewarded for failure."

For the United States it makes good economic and political sense too, since those companies are getting bailed out by the government its about time they cut their multi-million dollar salaries. They certainly can't expect the public tax payers to pay for corporate CEOs spending like there's no tomorrow.

Other governments considering bailouts would be wise to follow this move.

In 2008 Wall Street firms paid more than $18 billion in salary bonuses even amid the American recession and the massive taxpayer-dollar infusion into their industry.

Next week the White House will unveil a sweeping new framework for spending what remains in the $700 billion USD financial industry bailout program that Congress created in 2008.

The pay cap will effect all banks receiving bailout money include AIG, Bank of America and CitiBank. They will not be allowed to pay above that amount until after they have paid back their government loans.

"We all need to take responsibility," Obama said. "And this includes executives at major financial firms who turned to the American people, hat in hand, when they were in trouble, even as they paid themselves their customary lavish bonuses. As I said last week, that's the height of irresponsibility. That's shameful."

"This is America. We don't disparage wealth," Obama said. "But what gets people upset and rightfully so are executives being rewarded for failure. Especially when those rewards are subsidized by U.S. taxpayers."