"$500,000 is not a lot of money"

by: Chris Bowers

Wed Feb 04, 2009 at 01:34


Details are still unclear on exactly what President Obama's executive pay requirements will be, and the banks will still get hundreds of billions in taxpayers' money in exchange for crappy investments, but the pushback from the corporate world is still priceless:

"That is pretty draconian - $500,000 is not a lot of money, particularly if there is no bonus," said James F. Reda, founder and managing director of James F. Reda & Associates, a compensation consulting firm. "And you know these companies that are in trouble are not going to pay much of an annual dividend."

Man, how on earth are we losing the spin war on TARP to guys like this?  

Chris Bowers :: "$500,000 is not a lot of money"

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"$500,000 is not a lot of money" | 44 comments
Whoa (0.00 / 0)
Arrested and sent to Guantanamo Bay? I'd go wild. Aren't we against Guantanamo Bay?
yeah, well I took that part out (4.00 / 4)
tried to think of something funny. But I'm giving up and going to bed.
[ Parent ]
Guantanomo is over-kill for these guys (4.00 / 1)
Anyone that snubs a $500,000 annual salary will likely feel a bit "tortured" if you confine them to a Motel 6 at the edge of town.

Especially when they discover that there's no room service and that the only thing Egyptian about the cotton in the sheets is the surname of the guy that sold them to the chain.


"It sounds wrong...
     ...but its right."

[ Parent ]
this guy will literally be out of business (4.00 / 2)
What use a "compensation consultant" when the max pay is $500,000?  

New Jersey politics at Blue Jersey.
Someone has to find the loop-holes (0.00 / 0)


"It sounds wrong...
     ...but its right."
[ Parent ]
We are losing the spin war .. (4.00 / 4)
because you have right wing TV stations like CNBC and Faux carrying water for the Republicans and Democrats don't do enough TV .. I think Digby posted something about the Dems sucky attitude towards the TradMed last week
I just got laid off at ABC (4.00 / 15)
and my best friend works at CNBC.

They don't want Democrats on air. We've been only booking Republicans because "everybody already knows where the Democrats stand"

After all, what are the Democrats going to do? complain? It's the liberal media, right?

I was in a meeting last week where our producer flat out said we needed to "bring Obama's approval ratings down"

Everyone who got laid off this week was an Obama supporter.

Surprised?

[ Parent ]
Wow! (4.00 / 3)
ABC is pretty bad, definitely...  has been for a long time... like Fox lite.  We need to get the word out on this, pronto!

REID: Voting against us was never part of our arrangement!
SPECTER: I am altering the deal! Pray I don't alter it any further!
REID: This deal keeps getting worse all the time!
[ Parent ]
They were waiting (4.00 / 8)
for Obama to ram through his ideas in Congress so they can run with their much anticipated; "Obama said he'd be bipartisan, what happened to the change?" storyline.

Unfortunately, it didn't work out as planned, so we tried to hit him on other things and found Republicans who didn't think he was bipartisan enough.

The media is our enemy, really our enemy, there is nothing we can do. Obama going on every network today was a great idea, but it may not be enough. This is a battle.  

[ Parent ]
Is there any way you can get this info.. (4.00 / 1)
...to democratic leaders, somehow?  At the very least, media matters?  Whatever you do, be careful... Thanks for the heads up!

REID: Voting against us was never part of our arrangement!
SPECTER: I am altering the deal! Pray I don't alter it any further!
REID: This deal keeps getting worse all the time!
[ Parent ]
They know (4.00 / 5)
Democratic leaders know, the White House knows, but putting together a strategy to outsmart the MSM doesn't happen overnight.

I can guarantee in the West Wing, the President's communication team is ordering Chinese and trying to figure out what they can do to override the power of the Wolf Blitzers and Chris Matthews.  

[ Parent ]
I hope so... (4.00 / 2)
...'cos this came on like a Tsunami!  180 degree shift in no time at all...

REID: Voting against us was never part of our arrangement!
SPECTER: I am altering the deal! Pray I don't alter it any further!
REID: This deal keeps getting worse all the time!
[ Parent ]
It was planned (4.00 / 6)
it was planned even before the inauguration. They'd give him his moment in the sun and then knock him out cold.

But this isn't the first time this happened. In 2007, when Eliot Spitzer came out with his driver's license plan (which I have to admit, I was personally opposed to). His office outright offered to make the Governor available to defend his plan...the producers refused and instead put on the most rabidly right-wing anti-immigrant people.  

[ Parent ]
2004 (4.00 / 5)
In 2004 in his final interviews for the job as NBC Nightly New Anchor, Brian Williams was told by General Electric CEO Jack Welch that "we" want the Republicans to win.  At roughly the same time, the CEO and effective dictator of the then parent company for CBS, Sumner Redstone publicly stated that he wanted Bush to win the election.

These corporate guys play dirty and with the fairness doctrine conveniently shelved by Ronald Reagan they do whatever they please.

[ Parent ]
You should contact Media Matters (4.00 / 4)
This requires an expose.  Really it does.  

"Incrementalism isn't a different path to the same place, it could be a different path to a different place"
Stoller
[ Parent ]
Yep. I second that recommendation. (4.00 / 2)

[ Parent ]
They should talk to Hillary... (0.00 / 0)
The Clintons were very,very good at media management... well, except from 1993-1994...

REID: Voting against us was never part of our arrangement!
SPECTER: I am altering the deal! Pray I don't alter it any further!
REID: This deal keeps getting worse all the time!
[ Parent ]
you can file a complaint with civil rights (0.00 / 0)
"cannot discriminate based on race, color, national origin, sex, age, disability, religion, or political beliefs" ...


[ Parent ]
Sure, but the problem is providing evidence (4.00 / 2)
I mean, if it could be proven that everybody who got fired in this round was an Obama supporter, this could have a chance at court. But I think its quite unlikely that those fired collegues would be willing to make a stand and testify. Well, maybe the publicly available information about party affiliation could be used as a substitute. but it shouldn't be forgotten that tit would take a lot of courage to stand up against a giant like ABC and that going public would likely result in becoming poisonous for the whole industry. Sadly, workers still lack strong leverage to successfully hold the corporations accountable.  
[ Parent ]
No court, no cost to file a civil rights complaint. n.t (0.00 / 0)

[ Parent ]
Sry for only focussing on the political inferences of this! (4.00 / 1)
Of course, we are also aware that these are hard times for you personally, and for your family. Here's hoping everything will turn out ok for you. Chin up, and all the best wishes!
[ Parent ]
Seems incredible (0.00 / 0)
Those are some pretty specific and incredible claims. Do you have any evidence (e-mails, memos, etc.) to back it up? Given the current, hypercompetitive media environment, and Obama's sky-high approval ratings, I'm sure some folks would love to run with such a story (e.g. Rachel Maddow would certainly give it an airing if you can back it up).

Conduct your own interview of Sarah Palin!
[ Parent ]
Agreed (0.00 / 0)
OTOH, if it's a Karl Rove rope-a-dope trick (like the Dan Rather affair), the Republican political hacks would have a field day attacking the credibility of whoever went for the Trojan horse story.

435 Dem Primaries 2012
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[ Parent ]
I won that bailout money for my company (4.00 / 4)
and I deserve a bonus.

See if I trickle down on you ungrateful peasants this year.

Well, it is draconian to them.... (4.00 / 3)
These guys are used to making tens of millions a year plus stock bonuses and other stuff that is absolutely outrageous... and for what?  I don't know... I've known and worked with a decent number number of fortune 500 executives, and while they were certainly capable and intelligent, I didn't see anything "special" about them that made them 500 times more qualified than me for the job...

The one guy didn't get there through connections... he managed to work his way up the ladder, which is amazing... I personally don't know how he did it, but he managed to... I'm quite sure he is in the minority on that one...

If Obama holds to this.... (and I think congress should try to pass the bill so that republicans would have to go against it), it will be interesting to see what happens...

I think you are going to see a flood of exec retirements... I don't know who they will get to run the banks, 'cos most "executive types" would have no interest in the position at that rate of pay.  They'll get a cushy job somewhere else.  The banks will have to actually maybe hire someone from middle management... they certainly would be more qualified... it might be the best thing that's ever happened to the banks...

The only big company CEO to make that small amount of money is the CEO of Costco, but that is a very blue company....

REID: Voting against us was never part of our arrangement!
SPECTER: I am altering the deal! Pray I don't alter it any further!
REID: This deal keeps getting worse all the time!

Merit (4.00 / 6)
What they had that you don't have is called "merit" as in "meritocracy".  It is easily measured in dollars.

Oh, and it's genetic. Just you wait and see.  Their kids will have lots of merit too.

Which is why we shouldn't have a "death tax". Those poor kids shouldn't be punished just because they were born with more merit than you.

[ Parent ]
From Sam Pizzigati's site "Too Much" comes this bit of news (4.00 / 4)
U.S. Senate Finance Committee chair Max Baucus from Montana is now drafting legislation that would end the uncertainty over the future of the federal estate tax - and lock in place the current George W. Bush bargain-basement tax rate on the fortunes America's super rich leave to their heirs. A generation ago, the top estate tax rate on grand fortunes stood at 77 percent. The Bush 2001 tax cut has lowered this year's top rate to 45 percent. Senator Baucus wants that 45 percent made permanent. After deductions, the Center on Budget and Policy Priorities noted last week, the actual tax rate on large estates amounts to far less than 45 percent. If the Baucus freeze becomes law, the Center calculates, estates over $20 million would face taxes that average "less than one-quarter" of estate value. Senator John Kyl from Arizona wants to see estate taxes even lower. His proposal would drop the estate tax to 15 percent. Under current law, estate taxes will revert back to pre-George W. levels - a 55 percent top rate - in 2011. The Baucus approach would, over the next decade, cost the federal Treasury $609 billion. The cost of the Kyl plan: nearly $1 trillion. The only beneficiaries: the three out of every 1,000 Americans who die with fortunes large enough to trigger estate tax liability.

Labor journalist, Sam Pizzigati has been fighting the good fight on CEO pay for years.  Check him out.

[ Parent ]
Here's how I would do it (4.00 / 1)
If we're going to continue with a system that taxes income, then tax all income, including unearned income.

An inheritance is unearned income.

There need be no cutoff - or rather - the cutoff should be the same as it is for earned income tax -- so if we don't tax people for the first $30K/yr of income (I just made up that number), then that's the cutoff for inheritance as well.

A big problem is psychological. People work all their lives and want to give whatever benefit they can to their children. I doubt many people would go for my idea of tax fairness.

(oh, and there's the little problem of the notion that all the food, shelter, clothing, etc that you give your children as they grow up is also "unearned income".  Mustn't overlook that)

[ Parent ]
The Inheritance Tax needs a bigger exemption... (0.00 / 0)
...than the income tax.  I'm fine with people passing a million bucks or so to their family tax free.  That's higher than the $600,000 it was before Bush.  So if you've got 5 heirs, they each can get $200,000 tax free.  

The income tax raises funds to operate the country.  The inheritance tax was designed to control the "landed aristocracy" that we came to this continent to escape.  And that we created this nation to prevent.  

People would really squeal if more than the top 1% or so were subject to the anti-aristocracy tax.  Hell, people who will leave only debt to their families squealed about the "death tax" when the R's stirred them up.

--BD

[ Parent ]
... (4.00 / 4)
Man...spread that little jewel of a quote all around the internets...best PR for getting the provision there is.
$500,000 (4.00 / 5)
I'm not sure what the relative worth of $500,000 is in their world, but I know this: this is $500,000 more than they deserve.
cake (0.00 / 1)
This kind of cap does very little to address the underlying problems.

A few Marie Antoinettes, the CEO's, have to eat a bit less cake.

And the rest? The huge majority gorging themselves even now?

Revolution is the only solution.

You say you want a revolution (4.00 / 2)
well you know,

we all want to change the world.

He asks me for a contribution

well you know,

we're all doing what we can.

[ Parent ]
a second Revolution (0.00 / 0)
Yep, a second revolution restoring the original constitution, separation of government and the rule of law and order as well as nationalising the Fed is the best way forward for the US out of this morass artificially caused by the corruption and greed of the elite.
[ Parent ]
Maximum Wage (4.00 / 2)
As when Jello Biafra suggested a maximum wage, I think I have a better idea:  Tax any income above your desired "maximum" at 99%.  (Or 99.999%)

For many of the sort of people who are motivated to be in that tax bracket, a lot of it's about earning more than your peers, so you can rub it in their face at the bar or whatever.  Sure that's infantile, but it's also human nature.

Under my formulation, the high rollers could still brag they made more, even if the margin is by a few dollars, rather than a few million.  And the fruit of this hypercompetitiveness would go to the public coffers.

And now would be the time to enact it, when the public are paying attention to CEO pay and less prone to being fooled about "raising taxes" propaganda.

I like it. You are using the psychological to keep these (4.00 / 1)
players spinning, but we get the profits.  Cool.  This is not an outrageous idea.  Maximum marginal rates were 91% in the period of our highest productivity from 1951-1963.  So anything over $400,000 was taxed at  top rate;  over $100,000 was taxed at 75%. (In yesterday's dollars). Chuck Collins (Oscar Meyer heir and fighter for equality) said that with all the tax loopholes, the mega rich paid around 55% or so.
Our companies were highly productive.  The unions were strong.  Regulation was in force.  Kind of makes Galbraith's "countervailing powers" seem to work. But also, the CEO was not some sort of god.  He most likely came up through the ranks and knew his company. At the time the financial sector was a blip at 6% of GDP.  It was supposed to be.  It was supposed to be just a mechanism for money exchange.  For a time this model held.  
[ Parent ]
I prefer Biafra's suggestion (0.00 / 0)
That all bankers should have to wear clown suits.

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[ Parent ]
Tell you what... (4.00 / 3)
How 'bout we fire this guy and I'll go save his company for him for half that pay out of our taxpayer relief funds.

I'm pretty sure if I try real hard I can squeeze by on $250,000.

maybe (4.00 / 2)
but you'll probably have to stick with only 2 houses. Wait, home prices have plummeted, you can have 3 after all.
[ Parent ]
I'll do it for $125,000 + moving expenses (0.00 / 0)


"It sounds wrong...
     ...but its right."
[ Parent ]
i don't think we're losing the spin war (4.00 / 3)
they lost the spin war from the git-go.

Americans hate the TARP and they are increasingly resentful of lavish executive compensation.

The spin-meisters from Wall St DID win the spin war with the media from the git-go.

Remember that even Keith Olbermann and Rachel Maddow (hell, Jon Stewart too, though he's since backpeddled) were going berzerk to see the TARP pushed through.  

The media elite, including Keith and Rachel, must have a lot of money invested on Wall St.

But Americans at large, whether they have a job or are just worried about not having a job, aren't exactly crying for the wall st types.  Americans see these bonuses and then read the excuses and shake their heads.  You need the bonus to retain your best people?  Where they hell are they gonna go?!  And if they're so good, why do you suck so bad?

We are not losing the spin war (4.00 / 1)
the vast majority of americans still oppose TARP. We are losing the lobbyist war and all the Clinton/Bush hacks in teh administration are pushing it. Rubin, Geitner, Summers, Rahm adn the new goldman sachs lobbyist who is geitners cheif of staff.

I reall yhope Obama got a real wake up call from the Daschel mess. He put Podesta in charge of the transition team who in turn put in a lot of other hacks who could care less about things like taxes, except when they are lining their pockets with them.  

Sort of… (0.00 / 0)
I don't think we're losing the spin war, either, and the public elimination of Daschle and all these other ethics problems might just put the Obama administration in a better position to hardline CEOs. Tim Geithner is behind Obama in the NYT photo; guess who's in the position of having to tell all his old finance buddies that the jig is up?

"This ain't for the underground. This here is for the sun." -Saul Williams
[ Parent ]
Exactly (4.00 / 1)
I don't think we are losing it either.  Everyone I work with is behind Obama 100% on the executive compensation cap.  Everytime these guys go on TV and complain about a $500K salary cap they piss people off even more.
[ Parent ]
"$500,000 is not a lot of money" | 44 comments
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