“It’s a tough problem to solve,” Gates said Wednesday at an event for charitable giving in New York.
Federal attempts to impose $500,000 salary limits on chief executives at firms that accepted bailout money have been largely counterproductive, encouraging banks to rely increasingly on stock options.
“I do worry that when the government owns an entity like AIG that you can greatly devalue that entity by having it essentially have to behave as though it is part of the government,” said Gates. “It’s an unnatural situation when the government owns a lot of a private company. Unfortunately there is a view that that should exist for a long term. There’s some devaluation of what that asset would have been worth if it hadn’t had to go through that kind of management structure. It’s unavoidable,”
Despite Federal regulations, close to 30 billion in bonuses were handed out this year by Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co.
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