It appears that lawmakers are bent on pay caps for banks that use TARP money. As you may know a provision of the stimulus bill sets limits on bonus money for top executives at banks that receive infusions from the government.
The number of executives affected depends on the amount of government assistance they receive. But as a rule, most top executives can only receive a bonus that’s one-third of annual compensation.
That rule applies to banks that use TARP money in the future or have already received it in the past but not paid it back.
Meanwhile, President Obama also introduced his own salary cap– a few week’s back he limited pay for bank executives to $500,000 a year. That, however, only affects banks using TARP money going forward. Although that seems like a lot of money to most people – to top banks it’s a pretty hefty restriction.
This is a hot button issue on Wall Street. Some feel it will drive the best bankers to work for foreign banks where they can make more. And others find CEO compensation laughable to begin with. FM trader Karen Finerman falls into the latter category. For example, she tells the panel The Shaw Group has a non-compete that even applies in death! "It's rediculous," she sighs.
Want to hear some of the more outrageous compensation packages? Watch the video now!
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Trader disclosure: On Feb. 20th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour Owns (AAPL), (EEM), (FXI), (PBR); Seymour's Firm Owns (VIP); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Terranova Owns (KCE), (XBI), (AMGN), (FXC), (DIS); Terranova Owns Nymex MACI; Terranova Owns (IBM) Calls; Terranova Owns (AMGN) Puts; Finerman's Firm Is Short (IYR), (IJR), (IWM), (MDY), (SPY), (USO), (BAC), (BBT); Finerman's Firm Owns (RIG), (MSFT), (FL); Finerman's Firm Owns (BAC) Preferred; Finerman's Firm Owns (DNA) & (DNA) Call Spreads; Finerman's Firm Owns (WFC) Preferred