TARP Watchdog: Execs Can't "Party on Like It's 2007"

(CBS)

Executives at bailed out U.S. firms have to "understand you can't party on like it's 2007" when it comes to compensation, TARP's congressional watchdog said Thursday.

Elizabeth Warren, who chairs the congressional oversight panel for the Troubled Asset Relief Program, told CBS' "The Early Show" that executive compensation has become a "problem in American industry" that must be fixed.

The White House's executive pay czar, Kenneth Feinberg, is at seven of the largest companies receiving significant federal bailout money – cuts that would slash top salaries by 90 percent, reports CBS News correspondent Bill Plante.

Lavish corporate pay packages, even after the taxpayer-funded bailouts, have stoked anger and resentment in Washington D.C. and around the country.

"You know, you really begin to wonder what it's going to take to get the attention of the people in charge of these very large corporations," Warren told "Early Show" co-anchor Harry Smith. "They have taken taxpayer money, unemployment is now running at almost 10 percent. … And yet the executives want to say 'I take your money when I make mistakes and I still want to compensate myself richly because I'm the one who's in charge of this big company.'"

"Being in charge also means being responsible. And I think what that really means is you take the pain when you've had to turn to the taxpayer and asked them for their money for support."

The cuts will target the top 25 earners at each company – AIG, Bank of America, Citigroup, General Motors, GM Financial, Chrysler and Chrysler Financial, reports Plante.

Total executive compensation packages, including bonuses, would be cut in half.

Warren said the corporate pay problem stems from a culture that rewards short-term gains over long-term success.

"When the congressional oversight panel did its regulatory reform report back in January, we made the point that executive compensation right now has got the wrong set of incentives in it so that if a company can pump up profits in one quarter short term … then you get too much money even if that means you could actually be doing a lot of damage to the company long-term and a lot of damage to the economy," she said.

But what kind of hammer is the White House willing to wield in order to enforce a pay cut? Warren doesn't think the government will go so far as to take TARP funds back from the companies, but pressure exists anyway.

"I think the fact that the government has given so much some in TARP money is going to make these executives think and think again before they don't follow the government's instructions here on pay."

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[vinnyb5]

Scary, simply scary. Whats next? If they had any soul, congress would reduce THEIR OWN pay. After all they are running up massive deficits and are a laughing stock. They are doing more to this country over the next 10 - 20 years than any wall street firm ever could.

[David_Jack_Smith]

by anti-global3 October 22, 2009 1:53 PM EDT

Oh like your "anti-global" Pull the other one. You sound like a member of the Socialist Workers Party. Your vile hate speech fits in very nicely with the Marxist-Leninists; they're the real globalists who are all for a global wworker's paradise lead by the "vanguard." Which includes you, of course.

Well, at least you didn't publicly suggest targeting their kids for death. Guess even you aren't that brazen. Yet. Give it time.

[jxknowles]

These are good companies and they are an important part of the U.S. economy. But for ocen they need to put patriotism first and pay back the money they owe. Then they need to abide by the rules and regulations they agreed to when they were helped, including limiting executive pay.

Lawless, unbridled greed (all over the place), led to the economic collapse and the current unemployment of millions of Americans. Do the right thing and help your neighbor. Put America back to work. The rest will take care of itself.

[David_Jack_Smith]

Okay Harry... how about starting by cutting the pay of your BOSS?

LES MOONVES

President and Chief Executive Officer of CBS Corporation.

Salary $67.6 million in 2007 (includes other compensation.

Meanwhile, what about HARRY SMITH of CBS Corp.

Salary: $3,000,000 (last reported)

More do as as say not as I do from the Lear Jet theiving socialists.

Gibberish Harry.

[anti-global3]

how about making them pay back the taxpayers?????? At the point of a gun if necessary. We cannot accept the fact that we will not be paid back. If you or I borrowed money form the govt' and then said we were not going to pay it back they would come after us for it.
Who cares if their companies fail, some other group will come in and take over if money is to be made. Who cares about the ecexs abnd their families? If they can't take having to like like the average Joe there are plenty of bridges to jump from.

[HateChase09]

Whay about Chase Home Finance. jamie Dimon sure needs a cut in his bonus too!!!!!!
These are the people who suddenly lost one of my mortgage payments, and after several weeks of panicing, and putting off paying bills to account for this lost payment......It suddenly appears.
No wonder this company needed a bailout, they are the worst company I have ever dealt with.
I would love to talk with someone from this media outlet and send them all 57 pages of the documents I have showing money that was applied, and reversed from my account. 90% of these payments I never even sent to Chase.

[g55rumpy]

but is it constitutional? and by the way the greedest are in congress

[David_Jack_Smith]

NO. It's NOT constitutional. But hey, let's all take up the pitchforks and go after today's target form the Obama Enemies List.

2 MINUTES OF HATE boys and girls. Now all go back to sleep.

[GRgrandma]

Maybe our illustrious government will think twice before they give out more billions to companies??? Ya think??? They can't think beyond the end of their noses.

[mcrider7]

What happened to the 90% taxes on the bonuses

[starleo146]

Do they not pay bonuses in stock instead of cash?

[endurorob_5]

Before our leaders in government start telling corporations how to handle finances maybe they better figure out how to handle the finances of the nation. Our idiot leaders just keep spending and spending whent here is nothing to spend and they want to critisize corporate executives. What a bunch of hypocritical, envious, losers.