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CEO Pay Limits to 500k

Many individuals are applauding the capping of executive pay to 500k. Interestingly, though there are a lot of smart lawyers and CEOs working to figure out ways around this restriction. It seems to make sense that if you take government bailout money you have to play be a different set of rules. However, there are often many ways around the limitations. When President Clinton was in office he enacted legislation to limit the amount of expense a company could claim on their taxes for executive pay to 1 million. Companies then shifted to using stock options instead. With CEOs making 344 times the average worker there is often controversy or legislation aimed at limiting their compensation. With some of the brightest minds and so much at stake they are sure to find their way around it.

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One Response to “CEO Pay Limits to 500k”

  1. Stealthy says:

    I think this could hurt banks in the long run. CEO’s aren’t going to take TARP funds if that means they have to take a pay cut. They might not touch the TARP funds with a 10 foot pole. If the board forces the CEO to take TARP funds then the CEO would more than likely leave the bank to another bank that would pay him enough that isn’t having to accept TARP funds.

    Even though these banks are in trouble they still have some VERY BRIGHT minds working there who made some bad decisions.

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