Thursday, October 16, 2008

Banks’ Bailout Unlikely to Crimp Executive Pay - NYTimes.com

Kevin Murphy is one of my all time favorite professors, so when he gets quoted in the NY Times, it is definitely going to make the blog!

Banks’ Bailout Unlikely to Crimp Executive Pay - NYTimes.com:
"“The Treasury’s plan seeks to take aim at the eight-figure pay packages given to Wall Street executives that have enraged so many Americans in the wake of the country’s financial collapse.

....Congress’s record of regulating executive pay has been unblemished by success,” said Kevin J. Murphy, a finance professor at the University of Southern California, pointing to perverse outcomes of past efforts.

When Congress limited the tax deductibility of cash salaries to $1 million, for example, it simply led to an explosion in stock options used as compensation and even higher total payouts."

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