Companies that were taking our tax-payers money a year ago are paying shameful amount of compensation for their CEOs and other executives. Of course this is wrong, but there should be a line not to cross. We cannot allow the government to control our pay too.

The following are 3 examples of people that owe taxpayers money up to a year ago. So in other words, they were being paid with our money for screwing up:
AIG – $165 million in bonuses.
American Express – paid her CEO Kenneth being compensated $42.8 million
Citigroup – CEO Vikram Pandit, got $38.2 million (2008)

Firstly, lets get back to the basics. A bonus is a job well done. A bonus should only be paid out when there is money made. It is as simple as that. It is not that these CEOs are being paid nothing. They have six figure annual salaries. Is that not enough for them? If they have done well with the company earning tons of profit, they deserve a share and a bonus.

The other aspect is that of some banks. Some have taken loans from the government, paid them back, but their consumers are still the suckers and are still not feeling any better. Small businesses are still finding it hard to get loans and our credit card rates are jacked up. Wasn’t it to free credit that we loaned the banks the money?

So should something be done, yes! The question is what? Should the government step in and control executive pay? No. It has been a failure in the past. President Nixon, Reagan and Clinton all failed in doing limiting pay. In fact the more they tried, the bigger the backfire.

Also, if the government start to step in and tell Wall Street how much they should make, what else can they do next? Can they tell us what to think and wear? It is a step too far. So I think controlling pay in general is not a good option at all.

The first step that we need to take is to reign in those companies that still owe us money. Firstly, they are not to be paid any bonuses but stock options. In fact, CEOs earn more from stock options than they earn from everything else put together. And half of that should go back to pay off the debt to the Federal government. Salaries should be capped at $400,000 a year. Perks should not be allowed at all. These companies would complain about talent retention, well that is life! When you are down, talent do not want to come to you!

After these companies have paid back the money they owe us, we should tax their profit higher for the next three years. Hey, they are back because of us, shouldn’t we be entitled to some of the money? Some are making obscene profits while we are struggling. Let them help us now!

Next, we need to do pay reform. We do not need to cap it, but we need ban bonuses if companies are making a loss. If it is the situation where we are right now where small businesses cannot get loans while banks are back to being fat cats, lets tax the profit and lend money to the small businesses. In effect, we are doing the jobs that the banks are supposed to do.

Of course, it is easy for me to just write these ideas out, when the only experience I have is to run a small company that only has 4 employees including myself. So I would understand the criticism that would arise. But I stand by my opinion and would like to hear better ones if there are any out there.

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