http://www.financialweek.com/apps/pbcs.dll/article?AID=/20090203/REG/902039977/1003/TOC

Barney Frank supports legislation that would put a cap on executive pay at all US companies.

Now, I happen to think that if the government is handing out bailout money to a company that the government has every right to attach any strings they want. The company, after all, can decline said bailout if they don’t like the strings attached.

But the idea that the federal government should have a say over how much executives make in general is ridiculous.

For instance, congress wants to limit executive pay at any company receiving TARP funds to $500k a year.  Okay, if they want to do that then that’s between them and the companies receiving the money.  I happen to think it’s probably a bad idea but whatever.

What people tend to forget is that $500k is not a lot of money when you’re talking about the cream of the crop.  $500k is less than what many TV stars make per episode.  The TV show “Friends” had each actor making $1 million per episode.   The minimum you can pay a first-season NFL player is $200,000. That’s the NFL’s minimum wage.

So if you want the attract the best and brightest to run these multi-billion dollar companies, you are going to have to pay them extremely well.

But let’s talk about entrepreneurs.  If I knew my pay would be capped by the government, I never would have bothered to have my company in the first place.  People who have never started and built their own successful company have no conception of what it takes to do it. It’s a combination of consistent hard work over a long period of time, consistent, sometimes painful personal sacrifice and of course the right combination of relevant skills in order to have a successful business.

So I’d be rather appalled at the idea that my skills and work and sacrifice were somehow treated by society as being less valuable than what a TV actor makes in a single week.

If the government were to suddenly tell me how much I and my team could be paid, that would definitely be the thing to cause me to either move out of the country or sell out and live on the accumulated wealth.