Obama Puts $500K Limit on Exec Pay at Bailout Firms

By Kevin Spak,  Newser Staff
Posted Feb 4, 2009 10:15 AM CST
President Barack Obama walks back to the West Wing of the White House in Washington, Tuesday, Feb. 3, 2009, after visiting the Capital City Public Charter School in Washington.   (AP Photo/Pablo Martinez Monsivais)
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(Newser) – Executives at companies that get “exceptional help” from the federal government are in for a big pay cut, President Obama announced today. Top-level executives will have salaries capped at $500,000, Obama said, “a fraction of the salaries that have been reported recently.” The only other compensation they’ll be eligible for will be restricted stock that vests only after taxpayers have been repaid. Obama also restricted severance packages, saying, “We’re taking the air out of the golden parachute.”

Obama also promised tougher disclosure rules, which will force companies to detail executive indulgences such as aviation services and office decoration. Obama thinks the limits "should be viewed as fair and embraced as basic common sense.” Americans "don’t begrudge anybody for achieving success," he said. “What gets people upset—and rightfully so—are executives being rewarded for failure.”