This page was last updated on August 1, 2010.
Executive pay must be reined in; Tony Mester; Beaver County Times; August 1, 2010.
Below is a detailed critique of the subject letter.
“A recent article reporting that the federal government will not seek $1.6 billion in excess executive pay made me sick.”
[RWC] Neither the letter nor its title say so, but this is about executives whose firms received bailout money from TARP before Congress legislated guidelines in February 2009. We should note “excess executive pay” is defined simply as exceeding the February 2009 guidelines. Whether the pay was truly “excessive,” who knows?
“Obama administration pay czar Kenneth Feinberg said he ‘would not try to recoup $1.6 billion in compensation because he thought shaming them was punishment enough.’”
[RWC] The quote is not of Mr. Feinberg. Mr. Feinberg said, “I’m not suggesting we should blink, or turn the other cheek. These 17 companies were singled out for obviously bad behavior. The question is, at what point are you piling on and going beyond what is warranted?”
Mr. Mester failed to note Mr. Feinberg also said “90% of the payments were made at the 17 financial institutions that have repaid the government” what they received from TARP (according to the Wall Street Journal). Therefore, 90% of the $1.6 billion has already been paid back. Most of the news stories and this letter ignore this little tidbit. Also keep in mind some of these companies didn’t need/want to take TARP money but had their “arms twisted” to do so by the Bush administration to avoid drawing attention to the offending banks. That’s one reason some of the companies that took TARP money could pay it back so quickly. I believe Wells Fargo was one of the banks “coaxed” into taking TARP money.
“Give me a break. Give me millions of dollars and then shame me.
“I’ll be laughing all the way to the bank.
“He also said that he’s ‘not suggesting we should blink or turn the other cheek.’
“Well, that’s exactly what he’s doing.
“He went on to say he ‘could not force the banks to repay the money’ but they can force you to pay your taxes.”
[RWC] While what these financial institutions did was distasteful, it was not illegal for TARP funds recipients at the time. Of course, the problem wouldn’t have existed if we hadn’t bailed out the institutions. Mr. Mester didn’t tell us his position on all the bailouts for financial institutions, Chrysler, and GM.
“What a country we live in. Nothing will be done because we’re too busy texting.”
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