Pay cap too little, too late?

The Obama Administration, despite some apparent early dithering, ended up taking a hard line on executive pay at banks being bailed out with taxpayer funds. The $500,000 cap strikes many in the industry as draconian. But it does nothing--as of now, anyway--to change the compensation picture at banks that have already received TARP funds.

Unless, the likes of Citigroup, Bank of America, JPMorgan Chase and the others go back to the government trough, they will continue to operate under the old restrictions, passed by the Bush Administration, which are much more lax, notes the New York Times. Those rules banned golden parachutes and reduced some corporate tax benefits of pay above $500,000. In the case of Citi, the bonus pool for the top 50 execs was cut by 40 percent. So there's now some incentive to stay away from additional government funds. Which may not be a bad thing--unless the bank really needs it.

For more:
- here's the New York Times article

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