Barry Adler writes in a New York Times letter to the editor that proposed cap on executive pay is a mistake

February 6, 2009

In a letter to the editor of the New York Times, Barry Adler, the Charles Seligson Professor of Law, writes that President Obama’s proposal to impose a $500,000 cap on executive pay for companies that accept substantial government aid is a mistake.

“Any company important enough to be bailed out is also important enough to have the best leaders, and the best may cost more than the cap allows,” Adler writes.

Adler suggests that the government should instead withhold assistance until current shareholders and some executives and creditors are eliminated through bankruptcy or government takeover.

“The restructured companies could then hire new executives and pay them whatever they are worth to the new owners.”