The contrast is jarring. As thousands of Americans lose their jobs, headlines are focused on excessive executive compensation and lavish perks -- John Thain's $1.2 million redo of his executive suite at Merrill Lynch (since repaid), Citigroup's plan to buy a new corporate jet (since scrapped), and recent subpoenas to claw back bonuses handed out at Merrill Lynch.
"It is shameful," President Obama said last week in reaction to a report that New York financial executives took in $18.4 billion in bonuses while the banking system was receiving billions in a taxpayer-funded bailout. The people on Wall Street "who are asking for help [need] to show some restraint, discipline and ... sense of responsibility," Obama stated. Separately, vice president Joseph Biden offered his take: "I'd like to throw these guys in the brig."
No one has been locked up, but on February 4, the president announced a set of executive compensation limits aimed mainly at firms that are the recipients of federal aid under the Troubled Asset Relief Program (TARP). The rules place a $500,000 cap on salaries. Any additional compensation will have to be in the form of restricted stock grants that will not vest until after taxpayers are repaid.
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