Daily VideoFebruary 5, 2009
Obama to Wall St. Executives: I’m the Boss
President Barack Obama announced plans to limit the pay of executives whose companies receive taxpayer money to get through the financial crisis.
After the news media reported that Wall Street firms, some of which took billions in taxpayer money from the financial rescue plan, rewarded themselves with $18 billion in bonuses, President Obama decided to limit executive pay to $500,000 a year.
Executives at these firms will also have to disclose perks and other gifts they receive.
Wall Street, the area in downtown New York City where the largest American financial institutions are based, was involved in complex investments based on home loans that collapsed and helped create the current crisis.
Because the federal government needed to step in to help keep Wall Street alive, President Obama says he has the authority to dictate what some of these bankers are paid.
After a report on Mr. Obama’s announcement, two experts with different perspectives analyze the new rules and their possible effects.
“For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis isn’t just bad taste, it’s bad strategy, and I will not tolerate it as president.” – President Barack Obama
“The president’s program itself of what he proposed is pretty measured, it’s reasonable, and it does some good things.” – Steve Bartlett, CEO, Financial Services Roundtable
“Everyone in America has got a right to be quite angry with Wall Street. They allowed the subprime mess to get completely out of hand, and they don’t seem to have any kind of a sense for how they’re coming across or any sense of responsibility for it.” – Nell Minnow, The Corporate Library
Warm Up Questions
1. How much does the president of a bank make?
2. How much does the president of the United States make?
3. How much is a reasonable salary for the head of a big company like The Gap, Starbucks or Citibank?
1. Why did President Obama choose to limit executive pay for Wall Street firms that took government money? Is it a fair decision?
2. Do you think these top bankers make too much money? Why should anyone care how much they make?
3. Do you think it is good or bad for government to get involved in how a business runs? What are the pros and cons of Mr. Obama’s plan?
4. Some bankers argue that if their employees are not paid a lot, the good ones will go work for another organization that will pay them more. What do you think of this argument?
5. Make a list of professions: banker, a teacher, the president, etc. Research how much those positions make. What does the differences in salaries say about our society?
6. Has this recession made you rethink your career goals?
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