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One of the main aims of the plan is to sync the executives' personal interests with the long-term financial health of their companies, not a short-term gain via astronomical bonuses. The cash portion of these execs' pay will but cut by about 90 percent, replaced mostly with company stock that cannot be sold for years.
The companies in question are Citigroup, Bank of America (where the CEO has resigned and will not take his pay or bonus for 2009, but could reap a pension of $52.3 million), American International Group (AIG), General Motors, Chrysler, and the financing groups of the two auto companies.
Among the not-affected-at-all: Goldman Sachs, JP Morgan Chase, and Morgan Stanley. The New York Times reports: "With the financial markets and their profits recovering after the huge government assistance program last year, the three are expected to make huge payouts this year even as unemployment continues to rise." Astonishing as it is, Goldman Sachs has had some of its best quarters ever since the bailout. And because it is freed from the bailout constraints after paying back the Troubled Asset Relief Program (TARP) money, Goldman has set aside $16 billion so far this year for employee bonuses. Wow.
In the end, the plan to limit executive pay seems more of a public relations move for the TARP-rescued companies and the Obama Administration, which along with Congress needs to assure taxpayers that our huge-deficit-building influx of money was not merely to help those who are unemployed at financial firms back on track for outsize bonuses the rest of us could never even imagine.
What do you think? Read about the executive pay changes here, then decide whether these changes will make a difference, on Wall Street and for the rest of us working--or not working--everywhere else.
