I agree in that this is an important symbolic and psychological step, but what does it do to end the culture of greed that drives these organizations? I think this move fails at getting to the root cause problem.

Over at HRH, I posted on the same topic, with this as part of my comment:

President Obama announced caps on executive compensation for banks and financial institutions receiving funds from the TARP program. This will play well in Peoria, but it will ultimately be a meaningless gesture probably create more problems than it will solve.

It doesn’t seem to address:

– compensation equity across an organization (and the upside down inequity of having subordinates capable of earning more than the CEO!)
– talent management
– retention of key talent
— changing incentives for the majority of employees in the organization
— establishing new cultural norms for the behavior of the organization

I am sure there are others.