President Obama wants regulations that limit, if not prohibit, bonuses and high compensation to top management of any company that received bailout funds from the the government until they pay back all the borrowed money. I think it is reasonable to limit bonuses and excessive compensation to management until they have returned all the money they borrowed. Once they have paid it back, then it is up to the share holders to approve or disapprove these bonuses and compensation. I do think that there should be a regulation that companies must submit for approval by all shareholders the compensation packages offered; retirement packages, and bonuses of top management over a certain threshold, say .5% of profits.
Years ago the majority of share holders were individuals, union pension plans, and smaller national companies, who scrutinized their investments more diligently when it comes to compensations. Today the majority of share holders are mutual funds, large multi-national holding companies and corporations, and they are only interested in targeted performance numbers and don't care how they get them and do not scrutinized the details. Besides it is hard for one large corporation to criticize another large corporation about their large compensation packages, if they are receiving a very large compensation package also. Thus the percentage of compensation escalates until there is a large enough group of shareholders that fight back.
Capitalism is the preferred economic system, but it must operate within reasonable oversight to protect the investors and the overall economy. Otherwise excess will always result in economic disaster, lesson learned, but not remembered, from the depression of 1807 and the great depression of the 1930's, both caused by excesses of the wealthy and a drop in economic earnings and activity of the middle-class.
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