What's That Screaming?
Excuse my snickering, but I just discovered that after all of the sausage making involved in the stimulus package, Sen. Christopher Dodd added a little extra spice at the end of the process. He managed to sneak in compensation caps on the executives at the financial institutions which are currently standing in line for more bailout funds.
The bill, which President Obama is expected to sign into law next week, limits bonuses for executives at all financial institutions receiving government funds to no more than a third of their annual compensation. The bonuses must be paid in company stock that can be redeemed only when the government investment has been repaid. With the measure, lawmakers seek to address public outrage over extravagant Wall Street paydays even as taxpayers bail out the industry.
Unlike the rules issued by the White House, the limits in the stimulus bill would apply to top executives and the highest-paid employees at all 359 banks that have already received government aid. [Emphasis added]
The howls of outrage from the magnates have already begun:
"This is a big deal. This is a problem," said Scott Talbott, chief lobbyist for the nation's largest financial services firms. "It undermines the current incentive structure."
Talbott said banking executives expected certain restrictions would be applied to them but are concerned that some of the most highly paid employees, such as top traders, who bring in hefty sums for the company, would flee to hedge funds or foreign banks that have not accepted U.S. government funds.
We'll wave bye-bye politely, Mr. Talbott, as should the shareholders who watched their investments tank by the chicanery of these greedsters.
The Washington Post article has the details of the caps, but I prefer the summary found on Sen. Dodd's website. Here are just a few of my favorites:
Clawback any bonus, retention award or incentive compensation paid to senior executive officers or the next 20 most highly-compensated employees based on statements of earnings, revenues or other criteria later found to be materially inaccurate.
Certify that they are complying with these executive compensation rules.
Establish a Compensation Committee of the Board ... that has all independent directors; the Compensation Committee must meet at least semiannually to evaluate employee compensation plans in light of risk posed to the company.
Institute a company-wide policy regarding excessive or luxury expenditures,including entertainment or events, office and facility renovations, private jets, etc.
Institute “Say on Pay” or an annual shareholder vote on approval of executive compensation.
My absolute favorite, however, is the ban on “Golden parachutes” for senior executive officers or the next 5 most highly-compensated employees.
Now, this stimulus bill isn't nearly as good as it could have been or should have been, but parts of it are excellent.
The bill, which President Obama is expected to sign into law next week, limits bonuses for executives at all financial institutions receiving government funds to no more than a third of their annual compensation. The bonuses must be paid in company stock that can be redeemed only when the government investment has been repaid. With the measure, lawmakers seek to address public outrage over extravagant Wall Street paydays even as taxpayers bail out the industry.
Unlike the rules issued by the White House, the limits in the stimulus bill would apply to top executives and the highest-paid employees at all 359 banks that have already received government aid. [Emphasis added]
The howls of outrage from the magnates have already begun:
"This is a big deal. This is a problem," said Scott Talbott, chief lobbyist for the nation's largest financial services firms. "It undermines the current incentive structure."
Talbott said banking executives expected certain restrictions would be applied to them but are concerned that some of the most highly paid employees, such as top traders, who bring in hefty sums for the company, would flee to hedge funds or foreign banks that have not accepted U.S. government funds.
We'll wave bye-bye politely, Mr. Talbott, as should the shareholders who watched their investments tank by the chicanery of these greedsters.
The Washington Post article has the details of the caps, but I prefer the summary found on Sen. Dodd's website. Here are just a few of my favorites:
Clawback any bonus, retention award or incentive compensation paid to senior executive officers or the next 20 most highly-compensated employees based on statements of earnings, revenues or other criteria later found to be materially inaccurate.
Certify that they are complying with these executive compensation rules.
Establish a Compensation Committee of the Board ... that has all independent directors; the Compensation Committee must meet at least semiannually to evaluate employee compensation plans in light of risk posed to the company.
Institute a company-wide policy regarding excessive or luxury expenditures,including entertainment or events, office and facility renovations, private jets, etc.
Institute “Say on Pay” or an annual shareholder vote on approval of executive compensation.
My absolute favorite, however, is the ban on “Golden parachutes” for senior executive officers or the next 5 most highly-compensated employees.
Now, this stimulus bill isn't nearly as good as it could have been or should have been, but parts of it are excellent.
Labels: Corporate Welfare, Economy
posted by Diane at 3:45 AM
3 Comments:
I love the sound of gnashing teeth of corporate executives with my Oatmeal in the morning :)
There has to be consequences for poor leadership, hitting them where it counts "their pocketbook" not ours is equitable.
If we are lucky maybe some of those who are responsible for this disaster will quit in a huff of pique over this law (that sounds so nice) and Wall St. will get some much needed new leadership.
Harold, these folks have got the easiest gig in the world, short of purse-snatching cripples--which is not far from what they actually do.
I do not think it a matter of personal moral turpitude, but a system which privileges and rewards the most "productive" participants far far beyond their capacity to assign 'value' to their deeds.
This is the most currupt, most venal, most dishonest 'economy' in history. All Praise St. Reagan...
Bless you Chris Dodd.
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