Your president, today, on compensation, culture, and capitalism:
People are rightly outraged about these particular bonuses, but just as outrageous is the culture that these bonuses are a symptom of that have existed for far too long; a situation where excess greed, excess compensation, excess risk taking have all made us vulnerable and left us holding the bag.
And one of the messages that I want to send is that, as we get out of this crisis, as we work towards getting ourselves out of recession, I hope that Wall Street and the marketplace don't think that we can return to business as usual. The business models that created a lot of paper wealth but not real wealth in the country and have now resulted in crisis can't be the model for economic growth going forward.
And I've spoken before. We have to move beyond a constant bubble bust mentality and start establishing a foundation for long-term economic growth. That involves making investments on health care and energy and education. That means increasing our productivity across sectors and not just relying on the financial sector for all our economic growth. It means that shareholders and board of directors have to hold executives more accountable for their compensation scales […]
The financial regulatory package that we're designing as well as the economic policies that we want to put in place are going to put an end to that culture. […]
[T]here are a whole bunch of folks now who are feigning outrage about these bonuses that a year ago or two years ago or three years ago said, well, we should never meddle in these compensation plans. These are the best and the brightest. They know what they're doing. That's part of the market.
And now, suddenly, they're outraged. The point that I've been trying to make consistently has been that we believe in the free market. We believe in capitalism. We believe in people getting rich. But we believe in people getting rich based on performance and what they have add in terms of value and the products that services that they create.