Administration seeks ways to tame corporate pay

[Guest NewsBot]

WASHINGTON (AP) -- Talking tough but stepping gently, the Obama administration rejected direct intervention in corporate pay decisions Wednesday even as officials argued that excessive compensation in the private sector contributed to the nation's financial crisis....

 

By JIM KUHNHENN

 

More...

[RoyalOrleans]

The Obama administration has laid out more details on how the government would like to see executives at corporations get paid. Now keep in mind that this is for all companies, not just bailout companies. Any publicly traded company. Here are the guidelines:

 

 

 

assuring pay reflects corporate performance

 

 

using standards beyond the company's stock price

 

 

basing compensation on long-term performance, particularly by asking executives to hold stock for longer periods of time

 

 

giving corporate risk managers more authority to prevent excessive risk-taking

 

 

reexamining so-called "golden parachutes" and other retirement packages

 

 

promoting transparency and accountability in how compensation committees set pay

 

 

Geithner also wants Congress to adopt "say on pay" legislation that would give shareholders the ability to hold non-binding votes on compensation levels.

 

 

 

But now for the "good" news ... Barack Obama has decided that the government will not put a cap on how much executives are paid. Somehow I'm not buying it. There's going to be something in the mix that will give the government some sway over what private companies pay their executives. Even though tax cheat Tim Geithner says, "We do not believe it's appropriate for the government to set caps on compensation.", they'll figure out a way. One obvious tactic would be to eliminate corporate tax deductions for pay above a certain level. The Obama crowd understands that Americans are getting really weary of all this government intervention, so they're sounding a bit conciliatory today. With all of these 'guidelines' and 'restrictions' I am sure that the government is going to have a lot more say than any of us would ever imagine.

[RoyalOrleans]

Meanwhile, Obama has officially appointed his compensation czar. Kenneth Feinberg will set the pay - salaries and bonuses -- for 175 top executives at the nation's largest companies that have received bailout funds. These include companies like Bank of America, Citigroup, GM and others. Then there is a second level of 80 other financial institutions that have received bailout money. Feinberg will come up with a compensation structure for these companies, but won't set the exact pay like he will for the big guys. He will also determine "whether it would be in the public interest to force any executives at companies receiving assistance who might have been overpaid to return some of that pay," according to the New York Times.

 

 

 

We want these companies to succeed, don't we? Do we not want them to get on their feet again and get out from under the government's thumb? Now maybe it's just me, but if I was calling the shots for a major corporation in deep dog squeeze, perhaps I would see the sense in going out there and finding the best executive talent I could find to help bring things around. So ... how's it going to work for me when I tell a potential executive recruit that I really, really need their help bringing my billion-dollar corporation around, but that Barack Obama is going to be setting their pay scale? They're going to go somewhere else, right? You don't have to be, like, all that bright to figure that one out.

 

 

 

Sittin' here just diggin' the change.