Monday, December 8, 2008

Movement on Auto Bailout

It looks like an auto bailout bill of some sort is going to come to the floor. It may include an oversight board (or one person), government equity stake in the companies (the UAW is also angling for equity stake in GM), approval for business transactions over $25 million, and limits on executive pay.

Here's my question on executive pay. They are obviously making way too much, and the "golden parachute" is just ridiculous. Screw up and get millions of dollars -- not a good plan. But shouldn't there be some sort of incentive, in order to attract the very best? A limit on pay, but if the company is able to meet government demands for restructuring, and significantly improve their share of the market (without over-producing) in some given amount of time, couldn't they qualify for a really amazing bonus? Maybe that doesn't make good business sense either, but it makes sense to me.

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