Kiss those seven-zero paychecks goodbye, corporate America. This afternoon Handsome Treasury Elf Tim Geithner held a press conference to kick off a new era of executive compensation, and you are not going to like this one bit…
The Obama administration announced it will seek new powers for the Securities and Exchange Commission to force firms to let shareholders vote on executive pay and make directors who set compensation more independent, without setting any outright caps.
Today’s proposal, subject to congressional approval, would cover all U.S. public companies.
Oh, the SEC will oversee this? Great idea! They've done such a fine job with corporate oversight lately. Nothing gets past those people.
We are not capping pay. We are not setting forth precise prescriptions for how companies should set compensation, which can often be counterproductive. Instead, we will continue to work to develop standards that reward innovation and prudent risk-taking, without creating misaligned incentives.
And the nice thing about not setting any precise prescriptions is that Tim Geithner can decide, if he is bored on a Wednesday, that Vikram Pandit (for example) has totally misaligned a bunch of incentives and therefore should be smeared with honey and thrown into a tank of fire ants.
Have fun with that, guys!
Tags: Economy, Executive Compensation, SEC, Timothy Geithner
President Obama and his Treasury sidekick TurboTim Geithner announced this morning a series of new policies regarding executive compensation, because many impoverished taxpayers — perhaps you are one of them! — seem uncomfortable with the idea of bailing out corporations whose CEOs take home millions of dollars in salary, bonuses and stock options.
Under the new rules, companies that receive "exceptional assistance" from taxpayers may not pay any top executive more than $500,000 a year, an administration official said. Any additional compensation would have to be in restricted stock that will not vest until taxpayers have been repaid, the official said….
All banks will face tougher disclosure rules, which will affect spending on matter such as aviation services, office renovations, entertainment and holiday parties, conferences and events, and golden parachutes.
In other words, the days of the $1.2 million executive office upgrade are over.
From now on, that'll be $1.2 million for "architectural risk management and compliance services."
Tags: Barack Obama, Economy, Executive Compensation, Timothy Geithner