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Obama's bailout requirement


Velvet
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I heard on the radio this morning that Obama has created a rule that if you want a gov't bailout your CEO must take a pay cut to $500,000. Given that many of the bank CEO's were making more than $50 million a year this seems like an idea that will be very popular amongst the average Joe.

Can't help but wonder though, if a businessman is making $50 million a year and he knows he can maybe save his company by taking an enormous pay cut or he can squeeze one or two more years out of his company at full pay before he grinds it into the ground, well what would a smart businessman do?

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I don't know what a smart business person would do but from human observation and based on my limited knowledge of powerful people, I'd say that human nature makes us greedy and that the CEO will take the company into the ground before cutting their salary to $500 000. Now, the question is, will the stockholders and/or stakeholders (not sure what the difference is but I remember those two terms from school) be willing to have a CEO that will drive the company into the ground before taking a pay cut or would they demand that the CEO take the cut or leave?

Also, what about the rest of the upper echelon of the company? It's not just the CEO that makes huge amounts of money. Would everyone need to take the cuts?

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did you really ask if stockholders would be willing to let a CEO drive the company into the ground rather than take a pay cut? huh?

Did you really need to ask that question? Did I need to emphasize it with purple font or add a Wayne's World "NOT!!!" to the end to accentuate the sarcasm there? I figured it was a no brainer, actually.

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