Wednesday, February 04, 2009

Yes and No on CEO Pay

Today Obama is expected to say that he is setting limits on executive pay, but it sounds like all talk to me. For example, “Banks and other financial institutions that receive capital infusions, but are considered healthy, could waive the $500,000 salary cap and the stock restrictions.” So seriously, if they can just waive the restrictions, why have them?

This proposal doesn’t seem right to me. “The administration will also propose long-term compensation restrictions even for companies that don't receive government assistance, the official said.” Ok, now, I think it is fine for the government to control compensation for taxpayer funded banks, but for banks that the government isn’t involved with, they should stay out of it. I do think that executive compensation should be decided on by shareholders. I get so much “junk mail” related to my financial holdings, but I’d much rather get a one or two pager from the compensation committee regarding their decision on the CEO’s pay check or bonuses and have the right to approve or disapprove.

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