Lawmakers Propose Bailout Provision: Curbs on Executive Pay

One possible sticking point that's emerged over the Treasury's Wall Street bailout request of $700 billion is the proposal from a group of lawmakers for curbs on what top executives can earn. The alarming fact that heads of Fannie Mae, AIG and others were contractually guaranteed millions of dollars in severance pay has prompted some members of Congress to request such curbs on executive compensation in the bailout bill. Treasury Secretary Henry Paulson has resisted the provision.

Public attitudes are complex on the issue of executive pay. Public Agenda's focus group report on business ethics, A Few Bad Apples?, found that most people weren't actually bothered by high salaries for executives, and some said executives are entitled to their salaries if they oversee a thriving business. In fact, many attributed the reality of high executive compensation to the nature and function of the free market system, and nearly no one begrudged Bill Gates his wealth. But the public did show serious concern with business leaders who enrich themselves while driving their companies into the ground; many expressed outrage at how they could be rewarded with exorbitant salaries or bonuses during times of company struggle and employee cutbacks.