First Against the Wall, cont’d
A quote from a Connecticut politician earlier in the week - which I haven’t been able to re-find, sadly - went along the lines of how we all have to sacrifice even though “there are very few individuals that are specifically responsible” for the financial crisis that we’re in. I remember that part of the line, because I immediately thought “Well, why don’t we find those people and make them sacrifice more?”
Seems like a couple members of the CT delegation are thinking the same way. Dodd gets busy at the negotiating table:
WASHINGTON — A provision buried deep inside the $787 billion economic stimulus bill would impose restrictions on executive bonuses at financial institutions that are much tougher than those proposed 10 days ago by the Treasury Department.
The provision, inserted by Senate Democrats over the objections of the Obama administration, is aimed at companies that have received financial bailout funds. It would prohibit cash bonuses and almost all other incentive compensation for the five most senior officers and the 20 highest-paid executives at large companies that receive money under the Treasury’s Troubled Asset Relief Program, or TARP. [...]
The pay restrictions resemble those that the Treasury Department announced this month, but are likely to ensnare more executives at many more companies and also to cut more deeply into the bonuses that often account for the bulk of annual pay.
The restriction with the most bite would bar top executives from receiving bonuses exceeding one-third of their annual pay. Any bonus would have to be in the form of long-term incentives, like restricted stock, which could not be cashed out until the TARP money was repaid in full.
The provision, written by Senator Christopher J. Dodd, Democrat of Connecticut, highlighted the growing wrath among lawmakers and voters over the lavish compensation that top Wall Street firms and big banks awarded to senior executives at the same time that many of the companies, teetering on the brink of insolvency, received taxpayer-paid bailouts.
“The decisions of certain Wall Street executives to enrich themselves at the expense of taxpayers have seriously undermined public confidence,” Mr. Dodd said Friday. “These tough new rules will help ensure that taxpayer dollars no longer effectively subsidize lavish Wall Street bonuses.”
… while John Larson gets busy on the soapbox:
“We need new leadership on Wall Street, leadership of a higher caliber that can be trusted with taxpayer money. We need leadership that understands the value of a dollar to the average American. We need CEO’s that don’t spend obscene amounts of money on personal luxuries and bonuses while their actions have caused millions of Americans to lose their homes, their jobs and their health care.
“To date, few of those who got America into this economic crisis have been required to take responsibility for it. In fact, they have continued to make it absolutely clear that they are incapable of restoring the viability and integrity of our financial system. Therefore, it is time for the CEO’s of Wall Street’s crippled financial institutions to pack their bags and go.
Good stuff.
February 15th, 2009 at 9:17 pm
While the intentions are noble, I have to say that I believe these attempts to limit corporate salaries, bonuses, etc. are feel-good distractions AND doomed to fail. As we learned from the “campaign finance reform” dance - in a corrupt, profit-driven system, money will ALWAYS find a new way to reach the powerful and greedy - and THEY will always find a new way to get all the money they believe they deserve (or can steal).
Short of much more dramatic system-change, I don’t know the answer - but this ain’t it.