Wall Street Pay Is Often too High: Bill Gates

Wall Street Pay Is Often too High: Bill Gates

Published: Thursday, 12 Nov 2009 | 3:52 AM ET Text Size
By: Reuters

Bill Gates said on Wednesday he believes Wall Street pay is "often too high" and that U.S. government ownership of American International Group worries him because it has devalued the giant insurer.

The billionaire Microsoft [MSFT* Loading...* * * () * ] founder, who retired in 2008 to concentrate on philanthropy, blamed a 1993 U.S. law that capped executive salaries at $1 million and warned that further bids to try limit Wall Street pay could also backfire.

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"It was a bad milestone in controlling executive salaries when that $1 million cap went on," Gates told a discussion on philanthropy at the 92nd Street Y cultural and community center in New York City.

"The compensation problem is a very interesting problem. I do think compensation is often too high, but it's a very tough problem to solve," said Gates, who was also ranked by Forbes on Wednesday as the 10th most powerful person in the world.

The $1 million limit on salaries encouraged companies to instead give executives lucrative stock options, sending pay to vast new heights.


Bill Gates

U.S. officials are again pushing for Wall Street pay practices to be reformed to curb the excessive risk-taking that fueled the crisis and pushed the financial system to the brink of collapse last year.

Huge pay packages for banks and other financial firms have ignited public anger at a time the U.S. unemployment rate is at a 26-year high of 10.2 percent.

"What happened was a surprise to people and it comes from everybody being so optimistic and over ebullient and having a view of risk and price appreciation that was completely out of kilter," Gates said of the financial crisis.

The U.S. government spent hundreds of billions of dollars during the crisis bailing out several Wall Street firms, including Bank of America [BAC* Loading...* * * () * ], Citigroup [C* Loading...* * * () * ]
and AIG [AIG* Loading...* * * () * ] which is now 80 percent owned by U.S. taxpayers.

"I do worry that when the government owns an entity like AIG that you can greatly devalue that entity by having it essentially have to behave as though it part of the government," Gates said.

"It's an unnatural situation when the government owns a lot of a private company. Unfortunately there is a view that that should exist for a long term. There's some devaluation of what that asset would have been worth if it hadn't had to go through that kind of management structure. It's unavoidable," he said.

What f'cking nerve of this POS to pass judgment on compensation. The same guy that has made more money than anyone else EVER did in the history of the world, criticizing?

Hey Bill, ever heard of free market capitalism? Ever heard of the market dictating the price of a product or service being offered? Surely you have. Otherwise why would people pay ridiculous amounts of money for your shitty products that don't work well? I think I recall a few instances where you got paid despite anti-trust investigations and alleged product manipulation.

If you have such a problem, why did your cronies throughout all sectors of business who sit on the boards of these companies approve the executive compensation when it was brought before them?

F'cking dipshit!!

well said artiesliver

artiesliver said:

What f'cking nerve of this POS to pass judgment on compensation. The same guy that has made more money than anyone else EVER did in the history of the world, criticizing?

Hey Bill, ever heard of free market capitalism? Ever heard of the market dictating the price of a product or service being offered? Surely you have. Otherwise why would people pay ridiculous amounts of money for your shitty products that don't work well? I think I recall a few instances where you got paid despite anti-trust investigations and alleged product manipulation.

If you have such a problem, why did your cronies throughout all sectors of business who sit on the boards of these companies approve the executive compensation when it was brought before them?

F'cking dipshit!!

Click to expand...

obviously these investment banksters and big banksters in general get paid too much

any non banksters would agree with bill

they do no good service for the nation

and the massive amount of compensation promotes taking on gobs and gobs of risk putting the nation as a whole at risk

they create various products to enslave a nation in gobs of debt while they reap the benefits both on the way up and the way down

i mean if it wasn't a rigged game where the fed had their backs and weren't shoveling them 0% money and shit of that nature i guess you can't really complain...but in our non free market setup where the big banks are favored over every other type of corporation BY FAR in our nation and at the end of the day really do no good for our country as whole....its a load of dogshit

how you solve the problem is a tough question

option #1: end the fed

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.
Thomas Jefferson, (Attributed)
3rd president of US (1743 - 1826)

option #2: any big bankster getting "bailed out" with taxpayer money gets ripped apart into small pieces so we don't have to worry with too big to fail shite later on....i don't like this option being a free marketer but if it finally gets us away from big banksters controlling the fate of this country than i'm for it.....

to date all we've done

is created too BIGGER to fail....

as the investment banksters and banksters in general keep lining their pockets as the country goes down the shitter

also i know you do stuff financial related artie

this isn't a knock on the financial industry in general

its the big guys the goldman sachs, jpm, C, BAC etc...

its a small percentage of people fucking the entire country up

small community bankers and small investment firms play a key role in the economy and are obviously a necessity to a working economy in general

but all the big banksters do is create all these various products through easy fed policies and create bubbles.....they end up getting bailed out....end up gain a larger market share...and your small investment firms and bankers go under pressure when shit hits the fan...

yeah the smaller guys probably overexposed themselves to real estate related stuff and the mortgage brokers did alot of shady shit as far as lending practices but all that was allowed via the big banks and fed....plus alot of those guys don't know any better....your goldman sachs et al. know exactly what they are doing...hell they got all the inside info they want paulson ex goldman sachs...and now geither ex ny fed.....under a free market economy not artificially fluffed up on massive amount of debts the ability to get in the trouble and overexposed wouldn't have been present in the first place

the big banksters are systematically raping the american economy for all its worth and at the end of the day they are only gaining more power and control as they collude with washington

tiznow said:

also i know you do stuff financial related artie

this isn't a knock on the financial industry in general

its the big guys the goldman sachs, jpm, C, BAC etc...

its a small percentage of people fucking the entire country up

Click to expand...

I never said I was or wasn't with one of the big guys.....that said, I am DEFINITELY not one of the investment bankers/traders/sr. mgmt. who have been paid $15 million/yr.

I do agree that risk was unharnessed and it caused for a "swing for the fences" mentality. As a matter of fact, it f'cking pissed me off that my bonus was cut last year (1st time in 18 years) as the result of careless risk management in other areas of the firm.

Regarding this thread, I was just voicing my displeasure with Bill Gates' comments....it was a case of the "pot calling the kettle black" given that MSFT hasn't had a clean track record (then again, they didn't put the world on the brink of financial collape....YET).

well i think what he said is spot on regardless of what you think of bill

and yeah having a psedo monopoly in the tech/software space isn't gonna bring our economy to its knees either...

-----------------

"It was a bad milestone in controlling executive salaries when that $1 million cap went on," Gates told a discussion on philanthropy at the 92nd Street Y cultural and community center in New York City.

"The compensation problem is a very interesting problem. I do think compensation is often too high, but it's a very tough problem to solve," said Gates, who was also ranked by Forbes on Wednesday as the 10th most powerful person in the world.

The $1 million limit on salaries encouraged companies to instead give executives lucrative stock options, sending pay to vast new heights.

anyway none of this shit will change until we do 1 of the 2 options above

#1 end the fed....not likely at least anytime soon

#2 if you need help...your done...we are gonna break your ass apart it little pieces and be done with you

right now its a fucking joke....the companies that created the products that brought are economy to our knees are shoveling around 0% fed money and taking home 6 figure bonuses while the little guy gets fucked up the arse....

bair actually brought up #2

granted i think its just for show to appease the masses.....basically saying well if this happens again than we'll do it...but come that time i'm sure their story will change again

-----------------------------

Nov. 13 (Bloomberg) -- Federal Deposit Insurance Corp. Chairman Sheila Bair said using the Troubled Asset Relief Program to inject capital into struggling banks was “not a good idea” and helped erode confidence in the regulatory system.

“I just see all the problems it’s created now, the horrible public outcry,” Bair said in an interview for “The NewsHour with Jim Lehrer” on PBS, which released excerpts from tonight’s broadcast. “It’s had a terrible, terrible impact on public attitudes toward the financial systems, toward the regulatory community.”

The U.S. created TARP last year to remove souring assets such as subprime mortgages weighing down balance sheets and leading banks to stop lending, a program Bair said needed to be created. Former Treasury Secretary Henry Paulson was forced to drop the strategy and use the $700 billion fund as capital for banks when the plan prompted lenders to hoard cash and failed to halt a slide in the stock market.

“If any individual institution gets into trouble again and a conventional bankruptcy process would pose collateral damage to us, the rest of us, it should be put into a special resolution process just as we do with banks now,” Bair said. “It should be broken up and sold off.”

I don't believe we should cap CEO pay. I think the solution is to not let these companies get so big that if they fail they affect the entire economy. The only way they get to be this way is by not penalizing them for being an illegal monopoly.

Take the example artie gave regarding Microsoft. They get an illegal monopoly and are fined $100 million while they make billions on their illegal monopoly. If the penalty for having an illegal monopoly were enough to discourage having one we would have more competition and innovation instead of the crap Microsoft puts out and one CEO wouldn't make so much money.

The sky is blue.

Sincerely,

Bill Gates