US President Barack Obama has announced a $500,000 (£355,000) limit on executive pay at US firms that need substantial fresh government aid.

 

The move follows widespread public anger over the levels of pay on Wall Street, but is not expected to be applied retrospectively.

 

President Obama said it was "shameful" that top bankers had awarded themselves giant bonuses last year.

 

He added that taxpayers should not be "subsidizing excessive compensation".

 

'Justify expenses'

 

In addition to the limit on basic pay, Mr Obama said if affected executives receive any further bonuses, they "will come in the form of stock that can't be paid up until taxpayers are paid back for their assistance".

 

Firms will also have to publicly disclose "all the perks and luxuries bestowed upon senior executives, and provide an explanation to taxpayers and to shareholders as to why these expenses are justified". "We're asking these firms to take responsibility, to recognize the nature of this crisis and their role in it," said the president.

 

Analysts said the plan could raise the likelihood of senior executives moving from firms who need government aid to those that don't.

 

"There is certainly a possibility of talent flight from the big firms to the smaller investment banks," said Lauren Smith, analyst at Keefe, Bruyette & Woods.

 

Fellow analyst, Mark Poerio, of law firm Paul Hastings said he agreed.

 

"If you have someone who was making well over $1m, and now they are capped at $500,000, it is very conceivable that they are going to look to go to a company that is not subject to those limitations," he said.

 

'Take responsibility'

 

"We all need to take responsibility," said President Obama.

 

"And this includes executives at major financial firms who turned to the American people, hat in hand, when they were in trouble, even as they paid themselves their customary lavish bonuses.

 

"We're asking these firms to take responsibility, to recognise the nature of this crisis and their role in it."

 

According to the available figures, US banking bosses received bonuses of more than $18.4bn last year.

 

However, Citigroup, which has received $45bn of government aid, has already said its bosses, including chief executive Vikram Pandit, would forego their 2008 bonuses.

 

Mr Pandit earned more than $3m in 2007, including bonuses.

 

Republicans have supported the move to limit the pay of executives at firms that secure fresh government money.

 

BBC business editor Robert Peston said President Obama's move will inevitably increase pressure on the UK government to introduce something similar for British banks that have received state support, such as Royal Bank of Scotland and Lloyds.

 

Source: BBC News

Looks like Obama is making a start in curbing excesses of these bankers.Should we be doing the same in this country, but making the maximum salary a bit lower.

It's a start.

why not?.... and to stop these 'top people' going abroad it should be a europe wide thing, at least until the recession ends

As far as I'm concerned you can send most of these 'top people' abroad.

Frankly, I'd make them all work for minimum wage (just to see how THEY like it), and take their passports away so they couldn't move abroad until they've sorted out the mess they created..... Even if that takes 20 years....

 

The whole problem with the banking sector is that they think they have this automatic right to receive bonuses no matter if their decisions go pear shaped or not.... They seem to think all they have to do is to "turn up"...

 

Mind you, it's all a bit too late now, most of these gits who were the real problem have jumped ship from places like Northern Rock and Bradford and Bingley with their "golden parachutes" and Broon and Bush just let them.... <_<

To be frank, when there isn't much liquidity out there in the financial market, they simply shouldn't pay themselves billions of dollars, that's just completely irrational.

And here we have Public Enemy #1 as far as i'm concerned..... Freddie fukkin' Goodwin...... :angry:

 

Brown renews banker pension plea

Source BBC News

28th feb 2009

 

The prime minister is expected to renew his appeal for Sir Fred Goodwin to hand back part of his £16m pension at a meeting of Labour activists.

 

Gordon Brown has threatened legal action against the ex-Royal Bank of Scotland (RBS) chief over his pay-out.

 

He will also tell Labour's national policy forum in Bristol that more global banking regulation is necessary.

 

But he will face a protest by the Communication Workers Union (CWU) at plans to partly privatise Royal Mail.

 

Sir Fred's pension pot doubled to £16m last October, guaranteeing the 50-year-old £693,000 a year for life, when he agreed to take early retirement.

 

On Friday, the prime minister said he shared public anger at the "unacceptable" pension and was "considering every legal means at our disposal" to get some of it back.

 

Sir Fred, who stepped down after RBS had to be bailed out by the government, has so far rejected pleas to return it.

 

Divisions of Labour

 

The BBC's political correspondent Iain Watson said the prime minister will give a "wide-ranging" speech to Labour activists and trade unionists in Bristol, setting out what he regards as the main dividing lines between Labour and the opposition.

 

But there are also divisions within Mr Brown's own party, our correspondent said, particularly over the proposed partial sell-off of Royal Mail.

 

The controversial proposal to sell off 30% of Royal Mail is opposed by more than 120 Labour MPs and led to a protest in Westminster by postal workers on Tuesday.

 

The government says the Royal Mail needs new investment in technology to survive, but critics fear the scheme will lead to full privatisation and job cuts.

 

The CWU has threatened to disaffiliate from Labour if the plans, due to be debated in the Commons in June, are enacted. The union donated £53,000 to the party in the last quarter of last year.

 

Mr Brown is expected to reiterate the message that the majority of the postal business will remain in public hands

 

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

 

This utter c/unt truly knows no shame.... Over £20 BILLION in losses, and he still thinks he somehow deserves £650 grand for life for sitting on his arse doing fukk all.... He should be in fukkin' prison, not being rewarded for his failures.....