There are more HR professionals who say that President Barack Obama's limits on executive pay for firms receiving bailout money don't go far enough than those who say the restrictions are on target, according to a poll on Compensation.BLR.com and HR.BLR.com.
In early February, President Obama and the Treasury Department issued a set of guidelines on executive pay for financial institutions that are receiving government assistance to address the current financial crisis.
The guidelines put limits on executive compensation at banks receiving "exceptional assistance" from the federal government. If banks fall under the exceptional assistance standard, they must limit senior executives to $500,000 in total annual compensation (except for restricted stock).
When HR professionals were asked what they thought about the limits, 45 percent said they don't go far enough, compared with 43 percent who said the limits are fair and sensible. Just 12 percent of respondents said they thought the limits were too strict.
More than 500 HR professionals responded to the poll.
Two weeks before the release of the new guidelines, Obama criticized Wall Street firms for the size of the bonuses they paid out in 2008 despite the flagging stock market. He called the size of the bonuses the “height of irresponsibility” and “shameful.”
In January, the New York Comptroller reported that that the bonus pool paid by Wall Street to its employees in New York City totaled $18.4 billion in 2008. The size of the bonus pool was the sixth largest on record, but it was also a decline of 44 percent from the bonus pool in 2007.
On February 17, Obama signed legislation that includes a provision that prohibits participants in the Troubled Asset Relief Program (TARP)--which allows the federal government to purchase assets and equity from financial institutions in order to strengthen the sector--from giving executives “golden parachutes” or paying any bonus, retention award, or incentive compensation during the period in which they have TARP obligations outstanding.