Executive Pay Under Public Scrutiny Again As Congress Deliberates $700 Billion Bailout Bill

September 24, 2008 8:27 a.m. EST

New York, NY (AHN) - With Wall Street firms closing or financially shaky, executive pay is under public scrutiny once again as a proposal for a $700 billion bailout using tax dollars for financially distressed firms is being tackled by the United States Congress.

Among the proposals in Capitol Hill is to place caps on firms which would benefit from the bailout. U.S. workers suffering from low and stagnant wages, rising prices and job losses, and whose tax dollars would be used to bail out the private companies, have reacted to the planned bailout through emails and blogs pushing for a limit on executive pay.

Wall Street lobbyists and trade groups are fighting against a compensation cap on multi-million salary packages because they argue that it would be a disincentive to work hard and innovate among company managers.

Scott Talboot, senior vice president for government affairs at the Financial Services Roundtable, told the New York Times, "We support the bill, but we are opposed to provisions on executive pay... It is not appropriate for government to be setting the salaries of executives."

Among the supporters of an executive pay ceiling were former Securities and Exchange Commission chairman Arthur Levitt Jr. and Signature Bank chairman Scott Shay.

Levitt sees that the finance industry will still continue to offer attractive compensation packages, but not as high as before. Shay said a cap on executive salary for private firms in the bailout using public tax dollars is fair.