Evening Buzz: Pay Cuts at Bailed-Out Companies
Maureen Miller
AC360° Writer
It's pay back time for America's biggest bailed-out companies. The White House will soon order them to cut pay for their top executives.
A senior Obama administration official tells us that Ken Feinberg, the White House's so-called "pay czar", will demand the seven largest bailout recipients to lower the compensation for their top 25 highest paid employees by 50%, on average.
We're talking about the following companies: AIG, Citigroup, Bank of America, GM, Chrysler, GMAC and Chrysler Financial.
Is the move fair or is the government going too far? Tonight we've got too opposing view points and we'll let you be the judge.
We also have new exclusive details on the sweat lodge deaths in Arizona. Tonight you'll hear from a woman who took part in the ceremony that officials say led to the deaths of three people. Hear what she says went on inside that tent.
We will also take you to Texas where a key arson scientist is convinced the state executed an innocent man. We've been following the case of Cameron Todd Willingham for years. In recent weeks, the controversy has heated up with more than half a dozen forensic investigators saying Willingham did not set the 1991 fire that killed his three daughters. Texas Gov. Rick Perry, who removed four members from a state panel revisiting the evidence, says Willingham was a monster and guilty of murder. Tonight, hear what the key arson scientist in the case has to say about the governor and the investigation.
Join us for these stories and much more starting after "Latino in America" at 11pm ET. Thanks for staying up with us. See you soon!
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Filed under: Maureen Miller • The Buzz |
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This year pay cuts. Next year prison.
Who's going to pay for the health care reform if money is taken away from those who were supposed to pay for it?
This debate would not be happening if we had not bailed them out in the first place.
The execs would be out of work, their compensation "zero".
When the government has to bail you out, it means you endangered your company. By all accounts every executive remotely tied to the failures of these companies should have been fired as a pre-condition of tarp funding, and I think it's absolutely ludicrous the amount of whining going on when the "shareholders" of the US government insist they not be financially rewarded for their failure.
I'm a trained economist, and the people shouting about the free market don't seem to understand that had the free market been allowed to "work", the economy would have utterly collapsed and these executives would have been on the street. Personally I think we would have had much more bang for our bailout and stimulus buck if we had let the companies fail and given the money straight to the employees who lost their jobs as a result.
I agree that the big heads should take a pay cut from the begining of the bail out I thought that companys with execs making nore than 50 thousand per year should cut their pay, then the gov would not need to bail out
Hi! I'm glad that cnn is presenting a Latinos in America. I am only disapointed with the fact that when Latinos get interviewed they do not get the chance to express their views. For example with Isabel Garcia everytime that she tried to give her point of view she would get interrupted.
This is one of the best things this administration could do. these big wig executives need know that they can not take the taxpayers and then go back to their usual greedy and lavish ways. they are the reason we are in this situation plain and simple. the republicans have been talking about socialism from this administration but the what american people need to see is that the republicans have been turning this country into a cumunist society. there once was a lower and upper middle class, now it is just rich or poor. this what they are trying to hide and the only way to do this is get control of the government back.
The Government should take all the money back and distribute it to the american people!
These companies get bailed out by the goverment then turn around and complain about to much goverment..are you kidding me? This is ridiculous ...I could sure use a bailout myself....how about bailing us out ?
I agree with James C. and with pay cuts and regulations. Also, can some one please address the Bush tax cuts, all of which benefited these cronies at the banks, and where and how they created jobs. Was not this the reasoning behind his tax cuts? Can anyone show where this money went? Where are these jobs? These last 8 years and then this bail-out? And again, not addressing this unfettered greed, this socialized bail-out but privatized profit – based economics is going to bring us down for good. And to hear that we should leave these guys alone~ AIG, BOA, etc, and think this will 'create jobs' is ludicrous.
It is about time.
No company would keep an executive who loses money. They clean house! We the people are the government and when the executives failed the people and we have to bail them out; then a paycut is the least that should be done. When you ask daddy to lend you money you need to abide by daddy's rule.
This is just window dressing when in fact the Administration should be pressing for regulatory reform to prevent this kind of reckless behavior. Start with removing the foxes to guard the hen house and write effective regulation on all the secret stuff that Wall Street loves doing
U.S Goverment or the State of New York should build a prison at the end of Wall Street so those greedy crooks on Wall Street can go straight to jail.
Those greedy executives have done mega damage to the financial system of this country without being held accountable for their action to the American people.
I bet they won't vote for Obama next time, LOL!!!
As a moderate Republican, I fully support President Obama on his policies for a better America. We definately need affordable health care reform for all Americans. I will not mind paying a little more in taxes or health care cost if this will provide health care to all Americans.
I was raised on a farm in rual America where we could not afford to even think of seeing a doctor in the 40s and 50s. I am now retired with excellent health care for me and my family. I still think of my upbringing and thank God every day for my Blessings
What really bothers me were the townhall meetings where so many mean spirited Americans displayed uncivilized behavior toward health care reform that would help those without health care.
I am not a CEO of a large company and I know this is wrong on so many levels. Greed will only get you so far. I don't feel bad for them. Hear americas cries for help. At least u greedy big wigs have a roof over your head and food on your table. America can take a stand on this and fight back.
I think the executives of the companies that received TARP funds should get a pay cut. It was their irresponsible behavior, bad decisions, whatever you want to call it, that put their companies at risk.
It's time the private sector take a look at executive salaries. While I agree that corporate executive compensation should be commensurate to the level of responsibility; I do not believe that ANYONE has so much responsibility as to warrant earning high six to low seven figure compensation packages.
AC, all your coverage is aimed at the texas gov. but it shouldnt be. cases come to the gov. only after all appeals have been exhausted, the gov. was only doing his job.
if the guy was guilty or not , thats not the gov. job. that is for the courts to decide, and all these courts found him guilty, so if its proven that he is innocent, its the justice system we should be blaming.
Greed will only get you so far. If this is how these companies choose to do business, we as americans can take a stand. Its not their money, bottom line. I'm not a CEO of a large company and even I know this is wrong on so many levels.
I would put the Excecutives in jail for financial terrorism and took half their bank accounts. This would be a deterent to other executives who would try to bring the United States to its knees in order to fill their pockets.
They have did more than all the terrorist around the world to bring this country to the brink of a depression.
Money that is invested in a company by stock investors is suppose to be re-invested in the company to improve profitability to pay out dividends to the stockholders. Using investors money to bloat their salary is fraud. They are robbing the stockholders. I walk into a store steal a peice of candy, I go to jail. Why is their such great disparity?
It's truly thrilling to see a measure of action taken against the blood-sucking parasites who tried very deliberately to destroy the economic system of our nation, and who may still succeed if strong measures are not quickly and retroactively adopted.
I believe the gov.should take back 100% of our money that the greedy big shots have taken from the Coporate Welfare Money.They should also have to do some kind of public service work to pay us back.
I think that it is outrageous that financial executives should continue to expect and receive extremely generous salaries and bonuses when if it were not for the massive government bail out their companies would have gone under. In my opinion no single individual in any one of these companies is worth more than $1M per annum in total compensation, the remuneration is grossly out of proportion to the benefit to the company of any one of these individuals. They don't have talent or they would have not driven their companies into near bankruptcy due to excessive greed and risk taking. Further the government should treat the bail out monies as an investment and should expect a healthy return on its capital (i.e. 30~100% as any bank or hedge fund would) and untill the capital and interst is repoaid in full all salaries and bonuses should be capped. If the so called talent leaves the company so be it, these old cronies need to make room for a new generation of new talent. The government should take atough line with these companies, no US main street company has so much of a chance to take extreme risks, be too big to fail, recieve massive tax payer bailouts while executives grossly over pay themselves, this very thought might provoke a revolution in other less well developed countries!!!
A concerned patriot and a pained US tax payer!
I agree that the gov't is stepping in to limit pay for those executives that factor the gov't in as part of business plan. For every action their is a reaction.
When big companies take government money, new rules apply: those executives who had huge compensations before should have been fired, instead they now have the opportunity to rebuild their companies and really they should not accept compensation until those huge government loans are repaid. Their motivation should be the pursuit of their ridiculously large compensations AFTER they have done their jobs well, We, small people, get fired when we do not perfom well at our jobs. No one has given us compensation for the enourmous loss we have suffered in commission payments on the job market or the reduction in salaries to keep our companies operating so we stay employed. Maybe people with a conscience and true American patriots should be hired in their place when they choose to walk because their multimillion bonus packages are not renewed until their companies have repaid their debt. THAT is the American way and the true course the free market.
The gov't should get the money back and let the chips fall where they may. They should not have given these companies the money without conditions in reference to how the money was to be used. Many companies laid-off people and didn't have to. I was laid-off and the company I worked for, which is a major healthcare company in NYC, was not in bad financial shape. The gov't should have investigated all of the companies that laid people off to see if it was fair and ethical, posibly making them re-hire the people at the same salaries and benefits. That would put many people back to work. I would like my old job back.
It's easy to blame "the government" for all of our ills, but we forget that we don't have a democracy, we have a representative system. Our representatives are supposed to be making decisions based upon accurate information in the best interest of our country and particularly their constituents. Once the voting is done, we need to watch them closely and voice our opinion, but in reality, I certainly hope that they have privey to what is needed to make the correct choices. We, individually don't have access to this data. If we are disappointed in their proformance, we will have another shot at the next election. This, of course, assumes that we can be confident in our election process and we have fair elections. I certainly hope so.
If the executives get reduced by 90% at GM in cash compensation I assume this is a breach of their contracts and leaves them free to go to Ford at a 60% pay cut and build that company. Doing so would lower the value of GM and reduce our hope of getting our money back. Not to mention the fact the CEO that got GM in trouble already lost his job and the new CEO is trying to help. This does not seem fair, logical or in our best interests to me.
My background:
I am an entrepenuer and have raised $ 9 million from private investors over the last 5 years to launch the company that now employees 50 people on its way to employing hunderds if not thousdans (this is not an exageration). However, the economy has resulted in my not being able to raise enough money to pay my salary for the last two months and I am going to have to declare bankrupcy just when the company is ready to take off. The company will make it but I won't.
give me my money back! I am ofended that I work hard and hardly have ends meet and these people think that they can beg the gov. for money and use it for Luxuries.
I t was about time for our goberment to do somethng about this gansters(bankers in america.
These "capitalists" in Wall Street want us to forget that in a true capitalistic society their companies would've gone bust and they would've been out of a job like millions of Americans are. So they should be thankful for anything they get.
Of course the government should get involved and represent the American people who are going to foot the bill for their mistakes and their unjustified salaries. Until they are broken down into companies that are not too big to fail, they have to go by the rules of those who will rescue them whenever they get in trouble again.
The executive paycuts is a good decision and necessary. With executives receiving most of their compensation in stocks, it will motivate them to make the company successful longterm. Improving the company's worth is the only way they could increase the company's stock value, in turn increasing their compensation package.
Citi's President will get 19 million dollars even after the reduction!
Did I miss anything here? He should get nothing! I lost half of my lifetime savings because of people like him! he and the other rascasl should get nothing and some of them sould be thrown in jail!
Once the U.S. became the biggest investor in the otherwise bankrupt firms, the government had every right to determine compensation–even if Paulson and Bush were too stupid to insist on it. Where are those executives going to get anything close to what they're stealing for themselves? This goes for ALL employees of Fanny May and Freddie MAc, as well.
50% is way too generous!!! Cut their pay by 80% and sue those who engaged in illegal activities.
Congress should take a 20% cut for their complicity in the disaster and deregulation.
Finally, consequences for heinous actions! The checks and balances went out the window and as a result we almost wound up in the worst depression this country has ever seen. If these CEOs and people in high management positions didn't act like kids in the candy store the govt wouldn't have to get involved. Corporate greed must be stopped!
I am a republican and a CEO. There is no way that the leaders of failed companies should be paid millions. They are lucky they even have jobs at all.
I believe that what the WH is doing limiting the salaries and bonuses to the executives of the companies which received bail out funds is correct.
These people led their companies to near bankruptcy through their incompetence and should not be rewarded.
As a matter of fact they should be fired instead.
Sergio C
a Pay cut is the least that should happen to big wigg executives.
that's the rt thing to do i mean come onnnnnn it is like help me become a billionaire .....
On taking back tax $$$: Why stop at just the top 7? How many banking institutions took tarp money after all? and why are there none of the "traditional" Wall Street banks (ie: Bear Sterns, Chase Morgan) on the list?
I don't understand why we're stopping at 7. Let's at least go after the Dirty Dozen!!
Hell yeah! Its about time. There are millions of Americans out of work, out of their homes and out of hope. That money should have been used to fund programs that help people, not pad the pockets of thieves and looters. Bravo Obama administration!
I agree with the paycuts for the executives who failed to properly and efficiently run their business. They ought to be thankful they are employed and given, yet another, chance to make things right.
I'm glad that top execs will be expected to take pay cuts – their salaries and perks are nauseating they are so high. At the same time it bothers me that the government can dictate to businesses what and how much they can pay to employees. Hopefully this will never go beyond companies who take bail-outs from the government.
Free market system is great in theory, but when you have human beings in the system with carte blanche, it's like Lord of the Flies