White House wants changes in exec pay rules

[Political Heretic]

Source: MSNBC

White House wants changes in exec pay rules
Will seek to change guidelines in stimulus package after it’s singed into law

WASHINGTON - Facing a stricter approach to limiting executive bonuses than it had favored, the Obama administration wants to revise that part of the stimulus package even after it becomes law, White House officials said Sunday.

While President Barack Obama plans to sign the $787 billion stimulus bill in Denver on Tuesday, his administration will seek changes in the government's approach to executive compensation, senior Obama adviser David Axelrod said in a television interview.

*snip*

"Mr. Gibbs may not like it, but it is going to be enforced," Rep. Barney Frank, chairman of the House Financial Services Committee, said on CBS. "This is not an option. This is not, frankly, the Bush administration, where they're going to issue a signing statement and refuse to enforce it. They will enforce it."

Sen. Richard Shelby, the ranking Republican on the Senate Banking, Housing and Urban Affairs Committee, said the compensation provisions were necessary to protect taxpayer money. Of Gibbs' comments about the provisions and their enforcement, he told CBS, "It seemed to me that he was waffling a little bit."

Read more: http://www.msnbc.msn.com/id/29223168/

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*blink*

Is it upside down day? The Republican in this article sounds like the sensible one, and the administration officials sound lot like the last administration, trying to find ways to get around the law while signing it.

[FrenchieCat]

1. I'm not following this as well as I should, I guess.......But

AP also wrote this as part of the article.....

The White House noted Sunday that the administration sought the strictest restrictions on executive pay, but wanted pay limited to $500,000 in cash, with the rest coming from restricted stock; Congress' bill doesn't have an absolute cash limit.

[Political Heretic]

2. That last paragraph is pretty poorly worded. Explanation:

Here's my understanding..... someone please correct me if I'm wrong. I just want to get to the truth.


Basically, the original idea was that cash salaries for any new companies receiving TARP funds in the future would be limited to 500,000, however they could be further compensated in stock options, with no limit on value but only the provision that they could not be cashed out until the TARP funds were paid back.

This is how most CEOs are primarily compensated anyway. What they make in cash salary, while a lot, is nothing compared to their total compensation "package" of stock options.

The Stimulus bill changes some things. It makes the salary cap retroactive - meaning it would apply not only to new companies that take TARP money, but also to any company that every took TARP money. Further, Congresses bill doesn't have an "absolute cash limit" because it has an absolute limit on the TOTAL COMPENSATION PACKAGE a CEO can receive (stocks, assets, cash, etc.) So with the White house idea, a CEO could be compensated to the tune of 80 bazillion dollars, with 500,000 of that in cash salary and 79,500,xxx of it from stock options that simply couldn't be cashed out until after the TARP money was paid back.

Under congress' plan, the max a CEO could be compensated is 500,000. Flat. (or whatever the set number is) whether that was some combination of stocks and cash or not.

Not yelling at you, I just wanted to emphasize that part. I wish someone could back me up on my understanding of Dodd's amendment to confirm if I'm right about this or not.

[Lasher]

3. The total compensation limit is best.

Attempts to enforce this provision will be met by powerful and determined resistance by senior executives and their agents.

[No Elephants]

4. The article is not written as clearly as it could or should be. But I love

MSNBC and Barney Frank: Where were the media and Congress when Bush was appending one signing statement after another?

P.S. Even if giving this law retroactive effect does not technically violate the ex post facto clause of the Constitution, laws with retroactive effect stink.

[acmavm]

5. Why the hell are we going to 'accomodate' and 'compensate' these

criminal bastards? What the fuck? So the Obama admin is going to pat these criminals on the back and give them a 'deferred' compensation with no limits?

I'd give 'em limits. I'd say that they limit for the least amount of time they would be incarcerated would be however long it takes to clean up their mess plus 20 years.

[aikanae]

6. NO WAY

Pay caps were one of the things that made this acceptable. Most people do not want to pay CEO's anything for bungling. They should be happy to have a job at all.

Idiots.

[Political Heretic]

7. This needs more dicussion unless we're just an echo chamber.

Opinions on what's up?

I can give mine, but I would be interested in what others think - how does this jive with your expectations for the administration?

[mbperrin]

8. I still don't understand why it's not a proviso of receiving funds that

all senior management be fired prior to funds disbursement. Non-viable firms are created by non-viable managers.

So get rid of the incompetent bastards, please.

If not, an absolute compensation cap is great. I'd suggest $1 until all funds are paid back with interest.