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UncleNasty -> RE: FINALLY! The CEO TAKES CHARGE! (10/22/2009 8:00:08 AM)
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quote:
ORIGINAL: DarkSteven
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ORIGINAL: Fellow
Cutting an executive compensation substantially would arguably reduce the government tax revenue. In case a company pays its profit out mostly as exec. compensation it would count as a personal income and it would be taxed 35% tax rate (assuming exec.-s claim most of the income [wrong, but just for an argument]). If the money goes to shareholders as a dividend payment, it would be capital gain taxed at 17% (?) rate. The difference is in billions considering Wall Street current practices.
I have no problem whatsoever with that, because the immediate effect will be that the companies demanding bailouts will quit demanding. The entire world had gone topsy turvy when the profit motive and downside of risk were wiped out. Rewarding executives with big paychecks for unethical greedy behavior that screwed their customers was a horrible precedent and the American system could not continue under it.
The review of C level pay accomplishes two wonderful things: it will kill any desire to get government handouts ever again, and it will force a rethinking of a system under which top brass get fat checks for ruining a company.
It's all good. Very good.
I've posted this previously in more detail, but here it is again. There is no constitutional authority for gov't to "bailout" private companies in any way whatsoever. In response to the S&L crisis the Prompt Recovery Act was adopted in 1991. THAT is/was the appropriate law to apply to the circumstances of last fall. Gov't failed to follow the law, beginning with the previous administration and being followed by the current.
As for anything to do with "compensation" packages the whole topic is nothing but a distraction from the real and larger issues. In the overall picture the number of people involved in such is quite small, as is the amount of money involved compared to the "bailouts" in total. Yet the issue manages to command the attention of the people to the exclusion of most others.
Important cases continue to be decided in accordance with the facts and law and these continue to receive little attention in the media and little awareness in the populace. I refer you to the recent decision of Judge Long in Mass. at the following link:
http://www.scribd.com/doc/21062165/US-Bank-v-Ibanez-Memo-of-Decision-Denying-US-Bank
The entire 27 page decision is available on the above site. Long was aided by several of my network contacts in the case (who have been aided by me), his understanding of the issues, the information he used in coming to his decision both overall and with the specifics of the parties involved, etc. The security and securitization documents he refers to are quite lengthy. Understanding the information they contain and express is quite a process, and one that very few jurists are willing to expend the time to reach.
People here that have followed my posts over the past 2 years should be well aware that my focus is on mortgage lending and foreclosures. These are the issues that allegedly toppled the first dominoe in the economic crisis. There are, of course, other pertinent issues as well. But to me it seems an understanding of the first dominoe, and applying a proper solution to that, is crucial in fixing the problems in the overall.
Uncle Nasty
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