US Gov’t Beefs up Effort in Limiting Executive Pay

Summary: Enforcing its veto power, the Obama administration will soon implement a major capping in the salaries of top executives of some seven big companies in the US. Starting in November, the US government will cut salaries of some 25 executives as well as limit their compensations by half of what they are getting now.

The Federal Reserve, on the other hand, will monitor reckless gamble of US banking systems.

The United States government, led by President Barack Obama, has unveiled on Friday new plans that would invigorate its efforts to limit executive pays among companies that operate under the bailout stimulus package.

In an interview, officials of the US Treasury Department said that the government is now pushing for its veto power over the companies’ pay policy as well as limiting risk-taking of banking systems that is under the stimulus package of the Obama-administration.

“Basically, these companies and their high-paying executives are living up on taxpayers’ money and the government has the power to have them pay their respective obligations to the public,” an official said.

According to reports, the Treasury Department has started the implementation of the veto power by ordering some seven big companies to pay their loans and to cut top executive salaries, including bonuses and other compensations.

Starting in next month, companies will have to cut the salaries of executives by half. Based on the documents acquired, the salaries of some top 25 highest paid executives in the companies mentioned will be limited to only $500, 000 while the perks or other compensation will be just under $25, 000.

Meanwhile, the Federal Reserve has proposed to monitor the payments of several thousand banks in the US, including those that did not received bailout packages, in order to ensure that reckless gambles by loaners will not be encouraged.