US President Barack Obama has announced a ‘cap’ on executive pay for companies who are applying for government assistance, or ‘bail out’ money as it has become known.
The President believes it is ‘shameful’ the way some firms, particularly banks, were awarding themselves huge bonuses at the same time as asking the government for money to keep them afloat.
Executive salaries will be capped at $500,000 and all perks, expenses etc will have to be justified to the shareholders. Future bonuses for such executives would be in the form of stock which cannot be redeemed until the taxpayer has been repaid.
Some believe that the measure will result in a large number of executives moving from companies in receipt of government aid to those who are not. It may not be altogether a bad thing if some of the money-grabbers move on.
Mr Bean would do well to adopt a similar policy.