Public anger turns to CEO pay
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Public anger turns to CEO pay

By SiliconIndia   |   Monday, 29 September 2008, 11:39 Hrs
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New York: The proposed financial bailout program in U.S. will restrict pay to the heads of failed enterprises. There has been an outcry from public that while institutions are going bankrupt, their heads should not be let to leave rich.

As the emergency talks on a $700 billion bailout for the financial industry is going on between Democrats and Republicans in Congress, it is almost sure that any agreed package include restrictions on executive pay.

"The wealthiest people, those ... in the best position to pay, are being asked for no sacrifice at all," read a petition to U.S. Treasury Secretary Henry Paulson, which by Thursday, after three days, had 32,600 signatures.

Organized by independent Senator Bernie Sanders from Vermont, the petition attacked what it described as the Treasury's attempt to let bungling executives 'continue to make exorbitant salaries and bonuses.'

In 2007, the CEO of bankrupt Lehman Brothers, Richard Fuld, received total compensation of $71.9 million, including stock, bonuses and other pay, showed a survey published by Forbes magazine.

Martin Sullivan, the chief executive of AIG, who left the insurance giant before it was rescued this month by the federal government, received $14 million, a survey in USA Today said. He also quit with a $47 million severance package.

Even punishment for those at the center of the chaos comes with a gold lining. When the government took over collapsed mortgage giants Fannie Mae and Freddie Mac, ousted bosses Daniel Mudd and Richard Syron were not allowed US$12.59 million in severance payments. Yet they still got out the door with $9.43 million in retirement benefits.

More fierce was Newt Gingrich, conservative former speaker in the House of Representatives, as he wrote in the National Review that the bailouts, likely to top a trillion dollars, smack of 'crony capitalism.'

A fitting conclusion for this would be the words of national editor of Forbes, Robert Lenzner, "The compensation schemes for Wall Street CEOs should be capped to a small fixed amount," he wrote.

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