What would happen if we limit the pay of top executives working for private companies? Why do we want to limit it? If you do limit their pay, Where does it go?
I'll start with why. Why do we want to limit pay? Simple. Anger and jealousy. The masses are angry that wall street executives made loans they new were not wise, made millions of dollars doing so, and then were bailed out by our tax dollars when things went south. The anger is righteous. The solution would have been to let them fail. We are jealous because we see the lifestyles they lead, and believe falsely that if those executives had less the rest of us would have more.
Where would that money go? These are privately owned companies. If the money doesn't go to the executive it would stay in the coffers of the company to be used for various other endeavors like building new offices, expanding services, or perhaps just stay on the books as profit in cash. BUT.... would that really be okay. I mean isn't the point here that these companies are making too much money at the expense of consumers. So, instead a windfall profit tax would be in order. Therefore instead of expanding their business and HIRING more employees, they will shelter it in foreign investments, or have it taken by the government to be given to others.
The myth here is that there is a limited amount of money in the economic pie. Each dollar I have in my pocket is a dollar not available for anyone else. This is only a myth. In reality profits grow the economy and make more jobs available. Deficits shrink the economy and make less jobs available.
It isn't difficult to see what will happen. You can't redistribute money to make all people equally wealthy. You can only redistribute money to make all people equally poor. Understand that if you took ALL the profits from Exxon Mobile at the peak of their profit, each tax payer could get 1 tank of gasoline. Whoopie.