Some TARP Executives Not to See a Drop More Than $500,000: Report

About a week after President Obama called Wall Street's 2008 bonus haul "shameful," the President is planning to limit potential 2009 payouts at $500,000 to top executives at companies that have taken big chunks of TARP money, the New York Times is reporting. Bonuses above the limit would be prohibited, while stock dividends would be OK, according to the report.

That plan could cause considerable pain to executives like BofA's Ken Lewis, who made more than $20 million in 2007. It will also fuel arguments over the ability of these companies to retain talent if they can't pay them competitively or offer them incentives to perform well (bonuses).

But will it ease the minds of anxious taxpayers, who are watching billions of dollars of their taxes pour into  private companies, many of which have seemed startlingly poor stewards?

It certainly seems that talent retention for top executives at TARP-receiving companies is less of an issue than talent retention for top executives of Wall Street firms would have been in, say, 2006. Executives no doubt have an interest in steering their companies through the financial crisis/restoring profitability--this seems the sort of moment that can make or break the rest of an executive's career.

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