President Obama, in a move that I fully applaud, and was anticipated by George Will last year (see last paragraph of link), capped executive pay at firms receiving bail out money at a paltry half million per year. Why do I applaud such a blatantly anti-capitalist piece of symbolism and political theater? Well, I think the government is going to have a hard time giving away all that TARP jack if it hurts executive's personal bottom line. (Click here to apply yourself, if you think you can stand limiting your salary.)
Dean also saw the writing on this particular wall, commenting on how the mere threat of losing the corporate jet was already dissuading executives from porking out on federal largesse. How are they going to react to the loss of 7 or 8 figures off their personal paychecks. Some of these guys personal mortgages probably top the half million number.
As an aside, I had the good fortune to listen to Marshal Goldsmith yesterday, a great speaker. He discussed the motivating power of money and how he uses it in his executive coaching practice. He remarked that his client base consisted primarily of rich old men. "You would think they wouldn't mind losing small amounts of money, right? Well, you would be WRONG." He uses small fines in the $5 to $20 dollar per incident to get these executives to change bad behavior. If $5 bucks a crack can motivate investment bankers and Fortune 500 CEOs, what you think Obama's plan is going to do?
So good luck to the Prez and the new tax collector-in-chief in disbursing the rest of the bailout money. If you'll excuse me now, I've got an application to submit; I think I can squeak by on the $500K and the line seems a lot shorter now.