What is next a pay czar for hollywood actors?
The Obama administration’s sweeping new proposal to restrict executive pay is likely to be a humbling exercise for seven of the nation’s largest companies, which have received billions of dollars in federal assistance to survive the economic crisis.
But for most other companies, the plan is expected to have only a marginal effect on pay practices for now.
The Treasury Department on Wednesday appointed a well-known Washington lawyer, Kenneth R. Feinberg, to oversee the compensation of employees at the seven companies — the American International Group, Citigroup, Bank of America, General Motors, Chrysler and the financing arms of the two automakers. . . . .
Some in congress argue that the regulations don't go far enough:
Democrats on the House Financial Services Committee said Thursday the administration's efforts to hector the private sector into reining in executive pay might not go far enough.
The administration contends that excessive compensation contributed to the U.S. financial crisis, but rejects direct intervention in corporate pay decisions.
Instead, the administration plans to seek legislation that would try to rein in compensation at publicly traded companies through nonbinding shareholder votes and less management influence on pay decisions.
"I do differ with the administration in that hope springs eternal and their position seems to be that if we strengthen the compensation committees we will do better," said the committee chairman, Rep. Barney Frank, a Democrat.
Rep. Brad Sherman, a Democrat, said that instead of giving shareholders a nonbinding voice on pay, their votes should be binding on boards of directors.
Democrats and administration officials agreed that companies across the private sector need to adjust compensation practices to avoid damaging the economy.
Gene Sperling, a counselor to Treasury Secretary Timothy Geithner, said administration guidelines call on all publicly held companies to link compensation to long-term performance, not short-term gains. . . . .
Thanks to Anthony Troglio for this last link.