Saturday, February 14, 2009

Sen. Chris "The Snake" Dodd Sneaks Executive Pay Cap Into "Stimulus" At Last Minute

Yet another example of Under Cover of Darkness political meandering. Sneaky, Senator, very sneaky.

(Hat Tip: Jammie Wearing Fool)

From LATimes Blog:
Late fix in stimulus bill imposes tighter limits on bank pay

The economic stimulus bill passed by the Senate on Friday includes curbs on executive pay that go well beyond what Wall Street had been expecting. Sen. Christopher Dodd (D-Conn.), the chairman of the Senate Banking Committee, slipped the provisions into the bill late in the process. The entire stimulus package now heads to President Obama for his signature.

From the Washington Post:

The bill limits bonuses for executives at all financial institutions receiving government funds to no more than a third of their annual compensation.

The bonuses must be paid in company stock that can be redeemed only when the government investment has been repaid.

Unlike compensation rules the White House had previously issued for executives of companies getting additional government capital, Dodd made his measure retroactive, the Post said:

The limits in the stimulus bill would apply to top executives and the highest-paid employees at all 359 banks that have already received government aid.

"This is a big deal. This is a problem," said Scott Talbott, chief lobbyist for the nation's largest financial services firms. "It undermines the current incentive structure."

It's also retroactive.

WASHINGTON -- The giant stimulus package that cleared Congress Friday includes a last-minute addition that restricts bonuses for top earners at firms receiving federal cash -- including those that already received it -- more severely than the Obama administration's previous pay limits.

The most stringent pay restriction bars any company receiving funds from paying top earners bonuses equal to more than one-third of their total annual compensation. That could severely crimp pay packages at big banks, where top officials commonly get relatively modest salaries but often huge bonuses.

Chris Dodd and Barney Frank, who are as responsible as anyone for the current economic mess, continue to successfully use class warfare to push their Radical Socialist agenda.

Sadly, these two morons will never accept responsibility for their failures.

As a final slap in the face, this move will reduce tax revenue to the government by as much as $11 Billion!
Turns out there is a problem with limiting the pay of highly compensated bankers: the Wall Street high flyers pay taxes, too.

Imagine this: Capping top bank executives at $400,000 a year, as the Senate version of the $800-plus billion economic stimulus had called for, would have cost the government $11 billion in lost tax revenue by 2019. That's more than $1 billion a year, according to an estimate this week by the Congressional Budget Office.

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