Overheard @: Benefits attorney opposes exec pay cap

While some -- I admit, myself included -- hailed President Obama's recent edict that executives at companies receiving federal bailout money will have their compensation capped at $500,000, not everyone thinks the limits are a good idea.

Perhaps you're thinking, surely I jest? But no, Edward R. Rayner, a partner in the employee benefits and executive compensation practice at Katten Muchin Rosenman LLP in New York, says these limits may actually further harm the U.S. financial system.

"While at first glance, this may appear to be an important crackdown on the greed of recent years, the fact that the $500,000 cap only applies to companies accepting U.S. bailout money is a huge issue," Mr. Rayner says. "This opens the door for foreign institutions not subject to these compensation limits to quite easily and relatively cheaply, steal our best financial talent. Once this talent is gone, it will be extremely difficult to get back, and I expect that this will significantly weaken the U.S. financial industry."

Amid the deepest economic recession in decades, with millions jobless, Rayner is opposed to capping the pay of bank execs that are relying on taxpayer dollars to re-stabilize their institutions? What do you think? Do you agree or disagree with Rayner? Comment and let me know.

Tip of the Day

Read up on the new Treasury regulations on executive compensation. It may make for an awkward conversation with your CEO and CFO, but you’ll want to stay on the right side of the law on this one – particularly the limits on golden parachutes (you don’t want to look like another Lehman, do you?). Under the Emergency Economic Stabilization Act (also known as the $700 billion bailout plan), Treasury outlines exec comp guidelines for the Capital Purchase Program and the other two programs under the Troubled Assets Relief Program.