On February 5th, I commented on Obama’s plan to impose a $500,000 salary cap on U.S. executives who were holding onto taxpayer dollars for dear life.

Seven months later Obama has made bold moves in the right direction. Today the Treasury department ordered seven corporations, which have yet to repay their bailout money, to cut executive salaries and bonuses in half. The top 25 highest paid executives will have a $500,000 salary cap imposed on them and will see their perks capped at $25,000. The seven companies affected are: Bank of America Corp., American International Group Inc., Citigroup Inc., General Motors, GMAC, Chrysler and Chrysler Financial.

The Federal Reserve also weighed in, suggesting the monitoring of pay packages at thousands of banks to ensure salaries do not continue spiraling out of control.
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President Barack Obama & Treasury Secretary Timothy Geithner Speaking About Executive Compensation

Although Obama’s term as president is only in its infancy, he’s already impressed me in many ways. First was his ability to quickly put together an extensive stimulus plan (which took far too long for Canada to do) and then his plan to close Guantanamo Bay within a year. Now, it’s his idea to impose a salary cap for many U.S. business executives.

Obama’s plan is to place a $500,000 salary cap on executives at troubled U.S. financial institutions that accept federal bailout funds. And it’s a brilliant idea.

Here’s an excerpt from Obama’s announcement:
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