Capping CEO pay

Next to governor -- every day at this time my grandmother rose shall we do with the Boston business report with the Boston -- Steve side the preeminent business -- in all of New England hey thank you just -- Well -- the comparison to Willis on global and so it's a little -- absolutely our global guys Steve's site demonic stave.

Today in the glove I was running out -- the kitchen for a minute I missed the news updates that are really -- Barney Frank was pushing a plan to -- radio show host.

Hot hot hot hot hot -- Todd was not too hot to trot about -- before now he's off the job he wants. Our this is just the fact that they raise a big German traffic on -- doesn't bother me. This is an outrage of -- idea. God hasten what you take on now president Obama's look.

Thank you -- all morning talking about it complaining about this thing at an all I can think of what is your problem I I have no problem whatsoever with. -- a company a lot of money and telling the studio that while you're holding on to my money. You know here's what you have to do -- that it's mostly about you when your money and -- how much you can get.

I don't know we answer that question the first part is what if it's a bad idea that's being rose just because it's great politics the 500000 dollar cap doesn't seem realistic to me. In terms of companies that are currently to find CEOs are competing in a market the eyes of millions of dollars part two is. It plants the seeds for the real wackos who control the country like Barney Frank who says that. Any company involved in the financial industry who's involved in behavior that he has alike should have the salary caps. Even if they're not taking government money and -- you know you're on the slippery slope.

Well it's your first or second part first. I don't know about the future in what theoretically could capital I'd I'd stick with what's happening right now. It this idea that CEOs and other top executives have this vast world of proper job opportunities out there. It is just not the case.

Right now sorry now but in a couple of years I've been.

Well yes but you give the money back in the stories over. You know you're not shackled to a mere 500000. Dollars a year for ever. That's the deal is going to hold a lot of the money coming back. I think the money could come back and then well depending on the particular situation in a relatively short period of time I would say on average. If if if I was accepting a deal we're at the top salaries we're -- it's something like 500000 dollars. I would think that they would find a way to get the money back to -- inside a cup.

Steve review and if you and Todd worse CEOs at two different institutions touch institution has financial institution let's say. Fifty billion in deposits and related commercial activity you are -- back with fifty billion in deposits and to -- you know related commercial activity. You both going to get -- you find yourself in this dilemma you have to go to the government you know that that the sum this up top money or whatever. Do you think it's fear that the company of your company ten times bigger ten times more of the responsibility. You are going to be yup yeah. Compensation is going to be the same as -- it's it's like you know this like the major leagues and -- minor leagues yet.

Oh I look at compensation that lots of companies over a period time. And it's compensation at the company's aside that you're talking about the fifty billion dollars. It -- that issue that has had nothing to do with fairness for a long time council although I take your point I don't have a lot of sympathy about it. Secondly I think that when you're talking about. CDOs of very large companies that are looking at a period of time and again I would emphasize. But something has gone terribly wrong at this place if we not talking about a limited period of two years or so -- They are going to get taken care of on the backhand.

Steve if if if they're gonna get paid back -- federal government is gonna get this money back within two years or so that's where you're suggesting then this thing of capping salaries for that two years is meaningless they'll just. Make the money back -- in two years once the government's out of the picture.

But I don't have I don't want the government to be telling company's long term what they have to be paying. There.

That -- I want we agree with you but what's the point in the selling short term. Yeah yeah accomplished.

It accomplishes. A couple of things first of all I I think that there is a big political issue here in terms of how angry people are whose people put it's putting their money to begin with that's going into these organizations and let me after. Response to that and I I think I would respect that I was in in it in a government position. And secondly I think that you know you have a right. Seat at the table essentially on issues like that when you're. Putting big money into organisms. Guy who called earlier was talking about how venture capitalist view. Companies and and and how they put limits on people working there in terms of what. How they can be compensated at different stages I think that's a very good.

You're absolutely right and I think they totally -- it -- the first round of ballots it shows how in -- our whole system has become that the people in congress doling out billions of dollars didn't sit down with the people receiving it and say let's review a few policies you guys have before we agreed -- this money. You're going to cut your executive salary down to instead of twenty million make it to -- and your guy you know -- fly around on all these corporate general sell about riots erupt from minute he has.

You you can you can -- you be the witness ticket you'll recall very very clearly when Barney Frank was making it precisely those utterances during the first. Topped 350 billion dollars. You array antenna and -- about Barney he's a con anybody he's a fraud by knees and antelope but he doesn't know what he's going to have to I mean that -- that -- amazing precisely that issue and because he happens to be a liberal Democrat you go completely off the shot why do dogs that are when he you don't when he buried in his don't listen now used now you -- really offering the same utterances. Front line.

I I don't believe that public conversation your alluding to took place but. There way to do this is on a case by case basis and I think what we're seeing you just confirm Steve. Then because it's a small window of opportunity if you fix their salaries for two years and they pay the money back their boards of directors which to me that's that we we've got a corrupt system there the reason this problem in this what disappoints me about Barack -- should be saying there's a systemic. Issue here that boards of directors on companies are paying ridiculous amounts of money with no cause and effect to justify it to their bodies that make CEO does not sustain this doesn't charge that -- the private sector -- problem it was a -- electric company. --

What do you do you guys elect Dick kids and it schoolyard and if you know that's -- I I don't understand why you're talking about that the government agrees saying that the government should impose rules on our boards of private companies about how they can.

But right now know what I'm saying is the problem isn't that CEOs make too much money that's a symptom. It's a symptom of the fact that there's a corrupt relationship that exists between the CEO's and the board of directors its cozy little club the directors is supposed to be taking care of the vested interest of the shareholders and right don't what they take care of is our bodies CEO -- share.

I think there are different -- depending on what kind of industry you're talking about their different -- as a reason that banking and finance. Was supposed to be regulated and that's because. It is. If it gets way off the -- can -- the entire economy which is exactly what's happening right now if you're talking about. Other industries that have less regulation. That has less to do with the economy overall but. -- you know with what we're talking about finance companies and banks that there was supposed to be a degree of regulation in terms of risk taking. That was leaked to the whole point of risk taking was compensation. To a great degree and many many companies and that's something that should have been curtailed.

Which could have are curtailed by boards of directors who should've realized that they were incentivizing. Short term reckless behavior on the part of the CEOs to the detriment of the company and to the detriment of of the stockholders why didn't they realize that they didn't care because -- all the friends of the CEOs and the club in real.

The bit that spoke up private affair and it's that is.

It's a private affair may herald -- it and it's amazing I also don't like bad. Rule on I don't know just like you need to establish our right on interstate.

Think about it I -- chose not to and so if in the end they lose they lose.

We that's right and we can put -- put Todd right into the caddie -- unit right now with this observation the plaintiffs' attorneys that he's so quick to criticize. Are the ones who the most aggressive and bringing suits against management boards and -- executive.

I'm on behalf of shareholders like so do you think it's a better solution that for the government to step in and what salary caps and I know on the top I didn't find no Nadal got -- Hussein is that's the option it's such a desperate situation and so humiliating. That the government that Barack Obama is making a ridiculous political -- of a 500000 dollar salary cap which even Steve -- is supposedly the best business reporter in the world to support the ago he's even followed for the -- obviously -- a good panda and that's not -- they've -- it has been and it's been a great segment on -- got.