White House Places Limit on Bank Exec Salaries
As stories of excessive bonuses and lavish spending of federal bailout money continue to surface, Congressional impatience is turning to anger, as the White House places a limit on executive salaries.
After dropping $50 million on a private jet, Citigroup execs have promised to use the taxpayer money it's receiving wisely.
"Citi understands that (the bailout) is about helping the American people, and supporting U.S. businesses and our communities," Citi CEO Vikram Pandit said in the report.
Citi has received $45 billion from taxpayers in the last four months.
Meanwhile, today the White House is cracking down, sticking salary caps on any financial institution to benefit from the federal bailout. The "limit" is still pretty high: $500,000 (aka "half a million dollars")
The move was spurred by recent reports that Wall Street firms paid some $18 billion in bonuses last year, while the economy was spiraling downward and the companies were seeking federal help. Mr. Obama denounced the bonuses last week as "irresponsible" and "shameful."
Executives would also be prohibited from receiving any bonuses above their base pay, except for normal stock dividends.
"For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis isn't just bad taste -- it's a bad strategy -- and I will not tolerate it. We're going to be demanding some restraint in exchange for federal aid -- so that when firms seek new federal dollars, we won't find them up to the same old tricks," the president added.
However, executives who have already received bonuses that are deemed excessive would not have to give those bonuses back.
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