Putting A Salary Cap On CEOs

For cheif executive officers and other top executives, the days of millions of dollars in salary and bonuses are over.

President Obama announced a salary cap of $500,000 for top executives at companies receiving finds from the bailout package Wednesday after calling the companies’ decision to award nearly $20 billion in bonuses when the American economy is faltering “shameful.”

“If the taxpayers are helping you, then you have certain responsibilities to not be living high on the hog,” Mr. Obama said Tuesday, in an interview with “NBC Nightly News.”

The top executives from Bank of America, Citigroup, and General Motors all made far more than $500,000 in recent years.

Kenneth D. Lewis, the chief executive of Bank of America, took home more than $20 million in 2007. Of that, $5.75 million was in salary and bonuses, according to an article by The New York Times. Vikram Pandit, who became chief executive of Citigroup in December of 2007 and previously held other senior positions at the bank, made $3.1 million, as well as Richard Wagoner of G.M. who earned a salary of $1.6 million but $14.4 million overall in stock, options and other non-cash benefits according to the same article.

“This is a reasonable approach,” Obama said when describing the restrictions in an interview with CNN on Tuesday.

“It’s not a government takeover. Private enterprise will still be taking place, but people will be accountable and responsible and that’s what we have to restore in the financial system in general.”