The government provided funds to these companies to bail them out ... the government then has a legitimate cause to intervene and control the pay and wages of people within that company.
So if the government takes control of AIG, Ford, GM ... or Bank of America, Amtrak, Delta Airlines, American Airlines, ... then the government has some control over the selection of the chief executive officers of those companies ... and one might assume, individuals who will or do agree with the governments policies. In essence, the government will control private industry - which is, very clearly - socialism. I understand that many liberals start choking and remind us that in the 1970s we had ... and when the government broke up industry giants in the 1980s it was ... and whenever the FCC approves mergers the government is holding some degree of control. I grant that to the liberal. Except trying to educate me on the fact we have been moving steadily toward this end is not reassuring nor is it going to resolve the issues.
The people do not want this control.
When you inform them, educate them, and tell them what it really means - they oppose it, regardless of whether Obama has the best teleprompter to assist him with damage control.
U.S. Said to Order Deep Pay Cuts at Bailed-Out Companies
21 Oct 2009
Stephen Labaton
CNBC
The New York Times
Responding to the growing furor over the paychecks of executives at companies that received billions of dollars in the government’s financial rescue, the Obama administration will order the companies that received the most aid to deeply slash the compensation to their highest paid executives, an official involved in the decision said on Wednesday.
Under the plan, which will be announced in the next few days by the Treasury Department, the seven companies that received the most assistance will have to cut the annual salaries of their 25 best-paid executives by an average of about 90 percent from last year. Their total compensation — including bonuses and retirement contributions — will drop, on average, by about 50 percent. The companies are Citigroup [C 4.42 -0.01 (-0.23%) ], Bank of America [BAC 16.51 -0.50 (-2.94%) ], American International Group [AIG 38.96 -1.47 (-3.64%) ], General Motors, Chrysler and the financing arms of the two automakers.
At the financial products division of the insurance giant, A.I.G., the locus of problems that plagued the large insurer and forced its rescue with more than $180 billion in taxpayer assistance, no top executive will receive more than $200,000 in total compensation, a stunning decline from previous years in which the unit produced many wealthy executives and traders.
In contrast to previous years, an official said, executives in the financial products division will receive no other compensation, such as stocks or stock options.
And at all of the companies, any executive seeking more than $25,000 in special perks — such as country club memberships, private planes, limousines or company issued cars — will have to apply to the government for permission. The administration will also warn A.I.G. that it must fulfill a commitment it made to significantly reduce the $198 million in bonuses promised to employees in the financial products division.
The pay restrictions illustrate the humbling downfall of the once proud giants, now wards of the state whose leaders’ compensation is being set by a Washington paymaster.
They also show how Washington in the last year has become increasingly powerful in setting corporate policies as more companies turned to the government for money to survive
The compensation schedules set by Kenneth R. Feinberg, the special master at Treasury handling compensation issues, comes as many other banks that received smaller but significant taxpayer assistance in the last year have been reporting huge year-end bonuses, setting off a new round of recrimination in Washington about bailout of Wall Street.
Since his appointment last June by Treasury Secretary Timothy F. Geithner, Mr. Feinberg has spent months in negotiations with the companies as he seeks to balance compensation concerns against fears at the companies that any huge restrictions in pay could prompt an exodus of executives. Under a law adopted earlier this year, the Treasury Department was instructed to examine the salaries and bonuses for the five most senior executives and their 20 most highly paid employees at companies that have received extraordinary assistance.
Mr. Feinberg has already achieved significant results at several companies. As a result of his discussions, Kenneth D. Lewis, the head of Bank of America who recently was ousted, agreed to forego his salary and bonus for 2009. (He will still receive a pension of $53.2 million, although Mr. Feinberg can issue an advisory opinion challenging it that would carry political weight.) And fearful of a political backlash over the pay of Andrew J. Hall, a successful energy trader who received nearly $100 million last year, Citigroup agreed two weeks ago to sell its Phibro unit that Mr. Hall heads to Occidental Petroleum.
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