Part of Hank Paulson’s brand-new British-inspired bailout plan unveiled Tuesday will target the massive pay packages given to Wall Street CEOs. (Because that’s what caused the current economic crisis.)
But experts say the banks will just find ways around the new restrictions. Ah, Wall Street really is getting back to normal.
NY Times: The Treasury’s plan seeks to take aim at the eight-figure pay packages given to Wall Street executives that have enraged so many Americans in the wake of the country’s financial collapse.
Banks that get an equity infusion from the government will have to follow some general rules on paying their top five executives. They will be restricted from offering golden parachutes, as rich severance packages are called, and they will have to pay more taxes if an individual’s compensation exceeds $500,000…
Compensation experts say that the provisions, though politically prudent to appease public anger, will probably have little real impact on how financial executives are paid in coming years.
They predict banks will simply pay higher taxes and will find other creative ways of paying their executives as they see fit. Some say there could even be a sudden surge in compensation as soon as the government program ends, in a few years, leading to eye-popping numbers down the road.
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