<p>The last time I checked, this so called ‘talent’ you speak of is the same set of jokers that ran these companies into the ground to begin with, so if they want to go get jobs at foreign banks by all means lets get rid of them! </p>
<p>The one thing this current crisis has shown us is that there is no correlation between true intelligence/talent and the number of zeros on your paycheck. This country has an amazing talent pool and there is no shortage of qualified individuals that could bring these banks back to life… anyone who thinks it takes a billionaire to run one of these banks simply doesn’t know the business. </p>
<p>If the current salary caps put in place by the government results in individuals who care more about the size of their paycheck than what impact they’re actually having on our society fleeing to go elsewhere, well then I only see that as a good thing…</p>
<p>“Here’s the thing to keep in mind about the $500K proposed pay limit. To talent CAN get other jobs. They can work for international banks, private equity firms or start their own boutiques. Anyone who doesn’t understand this does not know the business. Those without options will be left to bring back the banks and failing companies. We’re all in trouble if this happens.”</p>
<p>We are in trouble because the million dollar execs put us there. Anyone that can go to a private equity firm or start a boutique and be successful will be doing a service to our economy. I wish them luck and lots of income – it will be better for all of us.</p>
<p>As for the banks and other companies that are in trouble…there are plenty of bright minds who didn’t rise to the top of these firms who would do a fine job fixing them up for $500,000 per year…with the promise of more when the mess is resolved and these companies are solvent again.</p>
<p>Please, folks, do not turn this into a working mommy vs SAHM debate. It’s not. As far as I can tell, everyone posting here worked/works out of the house. It’s a question of whether OUR tax dollars should support the lifestyles that others find necessary and we find untenable, for people whose companies are, as was so eloquently put above, “on the dole.”</p>
<p>You’re nothing short of laughably naive if you think any more than a miniscule small percentage of American society is in their job primarily to do good rather than to make a living.</p>
<p>Why would you take that risk if you’re a company director legally charged with maximizing the outcome for your shareholders? You’re supposed to find the best person (and there is a best person), not some “good enough” person who “could” revive things simply because you want to think they could be good enough.</p>
<p>The difference between optimization and “good enough” is billions of dollars. The right person if found is worth a lot more than 500k to these corporations, no matter what all you wonderful 100k people want to believe.</p>
<p>I think you should get off your high horse. The government is not a supporter in the classical sense of the word; it’s an investor like every mutual fund that owns these companies also. The government hasn’t nationalized these companies yet - until they do, they function as a minority shareholder like everyone else.</p>
<p>The simplicity of your argument ignores the reality that there could be and really are a lot of people at these companies who could run it in the future who would deserve market-based pay, especially if they revived conditions with value-adding actions in the future.</p>
<p>Government interference in the free function of a company - labor market relationship only has suboptimal outcomes.</p>
<p>As has been mentioned countless times, nobody forced these companies to take money. They ran themselves into the ground and the only way they could avoid bankruptcy was to take government handouts…</p>
<p>If they don’t like the rules then they can give the money back, but given that the only way they can stay solvent at the moment is to go on the dole they’re not really in a position to complain.</p>
<p>I don’t know much about the structure of the banking system and their importance to the overall economy, but I do know that general sentiment definitely runs against any perceived special handling of high flying executives (as the responses to this thread shows). They (and the US government, from the President down) ignore that at their peril. Remember the French revolution? (the French government sure does)</p>
<p>Why do you think the government is “bailing out” those banks, because they feel sorry for those institutions? They need to get the credit moving again. Who is going to lend to someone that’s making 100,000 buying a 250,000 house with a 20% down? No bank in Arizona right now, as posted by someone recently. How many people are getting their home equity line shut down now?</p>
<p>Banks will loan you the money… you just have to find the right one. I just bought a house (by myself) and I had absolutely no problem getting my mortgage. I make about half that, and my house cost about 160,000… now granted, my credit score is about 800 and I did put 20% down on my house… so I was pretty much a creditors dream… but still… it can be done. I wound up borrowing about 125,000… what’s crazy is a few years ago a buddy of mine who makes about the same as myself bought a house on his own for 225,000 with 5% down… now that’s a risk, and that’s the reason we are where we are… they were crazy enough to give it to him, but he was crazy enough to take it… He has kept up with the mortgage though, so props to him… there are many people out there in the same situation who are now foreclosing…</p>
<p>There’s really no fancy business here, it’s just basic common sense that should have been part of the bailout package from day one. </p>
<p>It’s simply the idea that:</p>
<p>1) Rewarding the leaders of a company with multi-million dollar paychecks/bonuses when the company is technically insolvent is bad business practice (and now that they’ve taken government money to meet the demands of their obligations, it’s illegal)</p>
<p>2) Money is fungible</p>
<p>The second point is actually the most important one. Some of these firms have tried to make the nonsense argument (which violates economics 101) that the money they’re paying these executives isn’t THAT money (aka the bailout money they received from the taxpayers). Nonsense… money is fungible.</p>
<p>Therefore, technically what occurred was that some these companies were run into the ground, they were brought back to life again when their executives decided to accept taxpayer bailouts to keep the company solvent… and then the same executives patted themselves on the back by taking that tax payer money and writing themselves a big fat bonus check. THAT is why so many people were outraged and that is why the current restrictions have been put in place.</p>
<p>The oversimplification of your analysis, Rocketman, is understandable as it’s what’s portrayed in the media, but so untrue I wouldn’t know where to start.</p>
<p>Bankers indeed played a part, a few much more than the majority and there is a ton of talent within these institutions. Is John Thain among them? Not IMO.</p>
<p>But what I say is just fact. International banks and private equity firms are chomping at the bit to cherry pick the talented, honest talent. And they will leave the US banks rather than take the $500K and leave the work and those salaries to those without better options.</p>
<p>I just don’t buy the “talent” argument. As a lawyer I ran into many attorneys working in the lower paid public sector (such as DA’s) who could easily run circles around the much higher paid lawyers I met in civil firms. In fact, I’d have to say that the most talented and imaginative people were those who OPTED for the lower paid positions, probably because they tend to be intrinsically motivated people. </p>
<p>There are plenty of experienced and talented people who have lost their jobs due to layoffs who would be very happy to have a job that pays half a million a year – I’m sure the headhunting firms know exactly where they are. </p>
<p>I’m thinking that if the compensation limits result in a lot of highly paid execs leaving the fold… that is the best thing that can happen to the financial institutions who lose them. They will be able to hire fresh talent – younger, ambitious people who will be highly motivated to work in an environment where efficiency and solvency are primary goals. </p>
<p>To start with – people who have to economize to at least some degree in their own lives are more likely to make good economic decisions for their own businesses, less likely to throw shareholder or taxpayer money away on expensive furnishings for their offices. </p>
<p>It really is laughable how people whose recent work history demonstrates their incompetency can have the audacity to argue that their “talent” justifies their pay. We’ll get a lot more “talented” and capable people if we get rid of these guys and their bloated egos.</p>
<p>And this isn’t an ‘oversimplified analysis’? I fail to buy the idea that the ‘only people left’ to run these companies will be the C and D listers who couldn’t get a job elsewhere. There are plenty of extremely well qualified people who could to these jobs. They may come from within the bank, they may come out of retirement, or they may come from other business sectors… but they will come if need be.</p>
<p>Of all the people I know, I would say that the most ‘talented’ and ‘qualified’ are also some of the ones with the smallest salaries. These folks do what they do because they love every minute of it… they’re not doing it for money. They could earn bucketloads elsewhere if they wanted to, but they choose not to. These, perhaps, are the types that might step in during the situation we’re in… and again, I certainly don’t see this as a bad thing.</p>
<p>I’m certain there’s talent all over. I can only address the talent in the environment where I’ve worked for three decades, Wall Street. The good people are leaving the troubled banks.</p>
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