Executives at companies that would receive bailout cash from the coronavirus-relief bill unveiled by Senate Republicans on Thursday would see their annual compensation capped for two years.
According to the language, no employee who makes more than $425,000 may get a raise in their salary for two years.
The legislation would also allow the government a chance to make money off its investments in these firms.
Under the proposal, the American airline industry would receive $50 billion, cargo air carriers would get $8 billion, and other ailing industries would get $150 billion. The money for cargo air carriers was an addition to the White House’s original proposal, a person familiar with the situation told CNBC.
Senate Republicans now must negotiate the terms of the final bill with their Democratic counterparts, as well as with lawmakers in the Democratic-controlled House.
According to the measure, no executive at a company receiving money may make more than $425,000 in total annual compensation for two years, retroactive to March 1.
Company employees whose salary has already been determined through collective bargaining agreement may be exempt from that restriction. That likely applies to the union workers at companies accepting aid.
Politicians on both sides of the aisle have acknowledged a need to offer aid to industries like the airlines, for fear their fall would eliminate jobs for thousands of workers. But Democrats have warned against any corporate aid that appears to be lining the pockets of executives. Republicans have worried about the appearance of flagrant spending.
“We are not talking about a taxpayer-funded cushion for companies that made mistakes,” said Senate Majority Leader Mitch McConnell earlier Thursday on the Senate floor.
“We are talking about loans, which must be repaid, for American employers whom the government itself is temporarily crushing for the sake of public health,” he said.
Governments from the federal to the local level have called on people to practice social distancing and avoid unnecessary travel from their homes in a bid to limit exposure to the coronavirus and slow the pace of its spread. In turn, airlines have slashed capacity dramatically, and the hospitality industry has seen business plummet.
Layoffs have already started to spike, according to unemployment claim data released Thursday. The worst is likely yet to come.
Article source: https://www.cnbc.com/2020/03/19/coronavirus-bailout-senate-gop-bill-caps-executive-salaries-at-425000.html