February 11, 2009 9:21AM # Executive Pay Restrictions By [Daniel J. Mitchell](https://www.cato.org/people/daniel-mitchell) --- SHARE Government-imposed pay restrictions are generally a bad idea; we have literally centuries of evidence showing that price controls always undermine economic performance. But in the case of executives who came begging to the feds after mismanaging their companies: Sorry, guys, you asked for it. President Obama’s proposal gets me nervous since it may lead to further meddling by government, but there is a silver lining. Bailouts are a major threat to the economy’s long-run dynamism, so I want to discourage companies from sticking their snouts in the public trough. Restricting pay for incompetent corporate executives is not a proper role of government (by definition, successful corporate executives do not try to loot taxpayers). But propping up poorly-run companies is so misguided that second-best (or even 50th-best) options may be palatable. Corporate chieftains who run their companies into the ground should not be allowed to simultaneously shift the burden of their mistakes to taxpayers and expect multi-million dollar pay packages. ##### Related Tags [General](https://www.cato.org/general), [Regulation](https://www.cato.org/regulatory-studies) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).