Today, Comrade Obama declared that executives of companies that receive bailout money from the government should have their salaries capped at $500,000. He wants to take the air out of the so-called 'golden parachute'.
I appreciate wanting to make sure the money is going to companies that want to return to profitability, but this isn't the way to do it.
In fact, I think this is the sort of move that will make matters worse.
Would you take a job that you knew that your salary was capped, and would not go higher? I wouldn't. I'd be more likely to take a job at a company that doesn't have such restrictions.
This will scare away the talented, innovative people from the job. The people that can make a difference are going to take jobs at other firms that don't limit compensation. Perhaps, they will even go overseas.
And when they run out of qualified candidates, they go for what's left.
Don't get me wrong. I don't want to give bloated pay checks to people who won't fix the problem, or to the ones that caused the problem in the first place, but there has to be a better way to do it.
How about having more of a floating pay grade. A sort of pay for performance system. I'm no lawyer, but I'm sure the smart people that decide those sorts of things can figure something out.
That way, the most qualified people will be motivated to take a job at a 'bailed out' company because they will work their butts off to make them better because when the company succeeds, they will be adequately compensated for it.
The answer lays with less government restriction, not more.