Dear Friend and Reader:
Lather. Rinse. Repeat:В When you askВ the government for money to bail you outВ of trouble, please don’t use it toВ purchase a corporate jet. Don’t buy your company expensive week-long retreats atВ lavish spas when you get the government check, and PLEASE don’t pay yourselves salaryВ bonuses totalling $18 billion.
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That’s the message theВ Obama Administration sent when it announced their plan to cap executive salaries for financial institutions that receive Troubled Assets Relief Program (TARP) assistance from here on.
This moveВ was madeВ in the wake of abuses of the bailout moneyВ last year under the Bush AdministrationВ to fund corporate perks and boost executive salaries through high-dollar bonuses valued in the billions.
Under the original TARP Program developed by former Treasury Secretary Henry Paulson, the banks that received bailout funds wereВ already subjectВ to limits on compensation, but the Bush administration intentionally left them lax. Under the new restrictions proposed by the Obama Administration, the top five executives at banks receivingВ government TARP assistance are restricted from offering lavish perks toВ executives.В Any compensation above $500,000 is not tax deductible to the company.