“The new pay czar will require executives to get government permission for special perks like limousines, private planes or country club memberships worth more than $25,000. That, along with slashing, by an average of 90 percent, the salaries, and by 50 percent, the total compensation including retirement and bonuses for the top 25 executives at each institution. The seven companies combined have received almost $3 billion combined. Cutting these executive salaries is immensely popular with the public. 71 percent support it in the latest ABC/Washington Post poll.” (ABC News)
President Obama’s pay czar, Kenneth Feinberg has ordered pay cuts for the firms that received the most bailout money but have yet to pay it back. The list includes AIG, General Motors, Bank of America, Citigroup, Chrysler Financial, Chrysler Group and GMAC. The Federal Reserve has also proposed a review of pay practices at 28 of the nation’s largest banks.
We’re looking at perspectives from CBS, CNN, MSNBC and ABC to see how the media thinks these plans will affect the economy.
CBS News talks to Elizabeth Warren of the Congressional Oversight Panel. She says the companies deserve the pay cuts as a result of being irresponsible with bailout funds.
“Unemployment is now running at almost 10 percent. Millions of families are facing foreclosure on their homes and yet the executives want to say, 'I take your money when I make mistakes and I still want to compensate myself richly because I’m the one who's in charge of this big company.' You know, being in charge also means being responsible, and I think what that really means is you take the pain when you’ve had to turn to the taxpayer and ask them for their money for support.”
CNN’s Anderson Cooper talks to business correspondent Ali Velshi about whether it’s legal for the government to reduce the funds of a private company.
“I’m really anxious to see what the legal argument is because up till now the White House has been saying to people who say, ‘Why don’t you take the money back from people who got government money?' They’ve been saying, ‘We don’t have the legal authority to do that.’ They can handle bonuses of executives of companies that they give money to in the future but they haven’t had the legal authority to do it until now. So, I don’t know whether something’s changed or whether the government is actually going to go out there and they almost dare these companies to sue them or challenge them in court because they’re going to fight this out in the court of public opinion, Anderson.”
NBC’s Lisa Myers talks to a New York Times columnist, who says the pay cuts may cause top executives of these companies to leave for better wages, hurting those calling for the actual pay cuts: shareholders.
“Others warn that while the pay cuts may satisfy public lust for blood on Wall Street, they may not help taxpayers get their money back. ‘As taxpayers, we’re shareholders in these companies, and we may have shot ourselves in the foot because the most talented may end up leaving for other firms that don’t have these pay curves.’”
ABC News asked Feinberg about those concerns. Here's what he had to say.
“Under the statute it’s a big concern. My primary obligation here is to make sure, under the law, that the taxpayers get their money back that was lent to these companies. And I had to take into account, making sure as best I can, that these companies thrive so that the taxpayers get their funds back.”
Do these executives deserve the pay cuts? Will the pay czar’s plan succeed in returning taxpayer money or will it hurt the shareholders? We’d love to hear your opinion.
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