|
US to issue new executive pay curbs
[Mail and Globe] The Obama administration will give a new Treasury official power to reject executive pay packages at firms that receive United States government assistance and wants legislation that would seek to tame compensation across the corporate world, an administration official said on Wednesday. President Barack Obama will ask Congress to give shareholders a non-binding voice on executive pay in an effort to link compensation to long-term performance rather than short-term gains, the official said. Executive pay is a politically charged issue in the US. Bonuses totalling $165-million issued by one bailed out company in March set off a public and congressional outcry. Obama and his economic team have been trying to temper the populist urge to cap salaries while at the same time trying to make the case that compensation practices contributed to the current crisis by encouraging high risk taking. The president also will seek legislation that requires corporate compensation committees to be independent from corporate management. The move would give the Securities and Exchange Commission (SEC) authority to strengthen the independence of the corporate panels that set executive pay. The official spoke on the condition of anonymity because the proposal has not been made public. Treasury Secretary Timothy Geithner was expected to spell out details of the plan later on Wednesday. The proposals are part of an effort by the administration to rein in a compensation system that Obama and his economic team say has encouraged excessive risk taking and contributed to the financial crisis. While the shareholder votes would not be binding, they would shed more light on skyrocketing executive pay and exert pressure on boards of directors. The administration believes the so-called "say-on-pay" plan will make directors more accountable to shareholders. Posted by: Fred 2009-06-11 |
| http://www.rantburg.com/poparticle.php?ID=271727 |