Bill Gates Says Executive Pay Is 'Often Too High'

Wall Street executive salaries are "often too high," but that's more the fault of the U.S. government than of the companies themselves. This is the view Microsoft Chairman Bill Gates shared Wednesday in a speech on philanthropy in New York, where he touched on the thorny issue of executive compensation.

Gates said the salary cap the U.S. imposed in 1993, which set a $1 million cap on the tax deductibility of executive pay, caused companies to work around the limit by issuing stock options to executives. However, this ended up driving executive pay even higher.

"It was a bad milestone in controlling executive salaries when that $1 million cap went on," Gates told attendees at the 92nd Street Y in Manhattan.

Gates is no great fan of government intervention in business, and has long been a vocal critic of U.S. immigration policy and H-1B visa limits. In 2007, after an immigration reform bill stalled in the Senate that would have boosted the U.S. government limit on H1-B visas, Microsoft opened its Canada Development Center in Vancouver in order to continue recruiting overseas talent.

This year, Microsoft has been under growing U.S. government scrutiny for its reliance on overseas talent. Earlier this year after Microsoft announced plans to lay off 5,000 employees, U.S. Senator Chuck Grassley, R-Iowa, wrote a letter to Microsoft CEO Steve Ballmer asking for a breakdown of the number of U.S. workers that lost their jobs vs. the number of H-1B workers whose jobs were cut.

In Microsoft's fiscal 2010 year that began in June, the company plans to reduce its overall H-1B visa applications by 20 percent, and new hire visas by 40 percent. Microsoft also plans to create between 2,000 and 3,000 new jobs in new, high growth areas over next 18 months, and the majority of these will be U.S. workers.