From the NY Times, just moments ago.
WASHINGTON — President Obama announced on Wednesday a salary cap of $500,000 for top executives at companies that receive the largest amounts of money under the $700 billion federal bailout, calling the step an expression not only of fairness but of “basic common sense.”
“We all need to take responsibility,” the president said, in discussing the compensation restrictions, which include an exception for restricted stock. He also used the occasion to prompt Congress once again to act on his separate economic stimulus program, whose cost could approach $1 trillion.
Mr. Obama repeated his comments that some Wall Street executives had shown “the height of irresponsibility” when millions of nonwealthy Americans were bearing the burden of Wall Street’s failures.
The people are sick and tired, Mr. Obama said, of seeing Wall Street executives come to the government “hat in hand when they were in trouble, even as they paid themselves customary lavish bonuses.”
“This is America, we don’t disparage wealth,” the president said. “We don’t begrudge anybody for achieving success. And we certainly believe that success should be rewarded.”
But Americans definitely begrudge “executives being rewarded for failure,” especially if their earning are subsidized by taxpayers, “many of whom are having a tough time themselves,” he said.
Treasury Secretary Timothy F. Geithner, appeared with the president to announce the restrictions, which do not require Congressional approval. “The economic crisis was caused in part by a loss of confidence in our financial institutions, and it was made worse by a loss of faith in the quality of judgments made by some executives and some boards of directors,” Mr. Geithner said.
There is a general feeling among not-so-rich Americans, he said, that they are bearing a greater burden because of the financial crisis than those who helped to create it. Mr. Geithner said he would devote “every ounce of energy” to restore public trust in financial institutions — the bedrock of the country’s credit system.
The $500,000 salary cap will be stricter for those companies getting “exceptional assistance” from the Treasury Department. “Exceptional assistance” companies wanting to pay executives more than $500,000 will have to do so by using stock that cannot be sold or liquidated until the government money is paid back.
Read more >>> Here