CEO Pay

Along with the big bailout bill, politicians recently voted to limit pay for CEOs whose companies end up benefiting from the Treasury's largesse.

Unfortunately, the wording is either so vague that it'll have little effect, or so specific that the situations where it can be used will be rare. Bans on so-called golden parachutes, for example, apply only if employment agreements are written during the rescue period and if the company sells more than $300 million in assets to the government.

We've been paying CEOs for failure for so long that it's second nature now. In our capitalist system, you're free to earn what you can and what the market will bear. But with those executives who are turning to the taxpayers to get bailed out, as partowners of their business, we have a right to say what they'll be paid.

Corporate boards of directors should have reined in CEO compensation, but instead they've abdicated their responsibilities and allowed it to spiral out of control. And we investors have been all too willing to hop aboard the gravy train, so long as we were sharing in the growth.

We must all tread carefully. The last time the government tried to cap CEO compensation, we got an explosion of stock options. It's like squeezing a balloon: When you press down here, something else pops up over there.