Executive Pay--Bipartisanship, or the Issue?

President Obama has recently made the case that executives in companies that accept "bailout" money from the federal government should be restricted to salaries of $500,000. His argument is that they shouldn't be rewarded for running their companies into the ground, and the taxpayers certainly shouldn't be subsidizing the reward. An interesting argument.

It certainly has populist appeal, and liberals are obviously supporting the concept as a matter of how they see fairness. Conservatives counter on principle--that once the government starts telling these businesses how to run their affairs, what's to stop them from telling all businesses? Or all of us?

That's not a ridiculous worry--when the income tax was being debated in Congress, one member was belittled for worrying that someday, 5% of the population might be subject to it.

What's more interesting to me is the obvious counter the President could play, if he really wants a bipartisan approach. Sure, liberals like the idea because they think it's fair. But the conservative argument should be that executives and boards need to be discouraged from taking the bailout unless their companies really need it. Taking a bailout is likely to devastate the shareholders--the owners of that company. There needs to be a personal disincentive to ensure that boards act on behalf of their investors, the owners, and don't get the idea that these companies are a personal playground.

He could move on to asking Congress to figure out a way to ensure that the CEO brought in to pull a company out of the ditch doesn't have to pay that penalty (nicely assuming he now automatically wins over his opposition with the previous argument).

The downside, of course, is that requires him to acknowledge the other side really has good ideas. Since, so far, "bipartisanship" has mostly consisted of, "Come to the meeting and then vote for my plan," that could be a problem. But that begs the question--is this about bipartisanship, or the issue?