Limits on Exec Bonuses May Backfire

Stimulus cuts are too strict, will actually hurt economy, say experts
By Matt Cantor,  Newser User
Posted Feb 15, 2009 11:53 AM CST
Sen. Chris Dodd pushed the new restrictions.   (AP Photo/Gerald Herbert)
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(Newser) – An 11th-hour limit on Wall Street bonuses in the stimulus bill could ultimately hurt the economy, experts say. In a surprise move, they curb not only senior executives’ pay but also traders, investment bankers, and others, the Los Angeles Times reports. “This will make it difficult to attract and retain top salespeople, the lifeblood of any company,” said a DC financial advocate.

The plan could push companies to raise executives’ salaries, or it could drive industry leaders away from targeted firms and perhaps overseas, he said. But other analysts disagree. “These are the guys who presided over more than $1 trillion in US losses. Do they really think foreign companies are eager to hire them?” asked one. The Obama administration had proposed much looser pay limits, and some say the president may aim to alter the measure.
(Read more economic stimulus package stories.)