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Obama Wants Stockholders Say On Pay

From Bloomberg:

Obama Administration to Seek New Power for SEC on Executive Pay

By Robert Schmidt and Rebecca Christie

June 10 (Bloomberg) — The Obama administration will seek new powers for the Securities and Exchange Commission to force firms to let shareholders vote on executive pay and make directors who set compensation more independent, an administration official said.

Today’s proposal, subject to congressional approval, would cover all public companies. President Barack Obama has long supported giving shareholders nonbinding votes on bonuses, salaries and severance packages. The administration also will name a “special master” to monitor compensation plans for firms receiving exceptional assistance in the financial rescue.

The changes are aimed at reducing systemic risks and quelling a political uproar over bonuses paid to executives whose companies were bailed out by the government. Treasury Secretary Timothy Geithner has repeatedly blamed pay standards tied to short-term profits for contributing to the worst financial crisis since the 1930s…

Geithner is scheduled to meet today with SEC Chairman Mary Schapiro, Federal Reserve Governor Daniel Tarullo and executive- compensation specialists at the Treasury.

The Treasury chief said yesterday that the Fed and other bank regulators will define “standards and principles that supervisors would use to help bring about reforms in compensation practices in the financial industry.” …

Changing executive pay practices is part of a broader initiative by Obama to overhaul U.S. financial rules in the aftermath of the crisis. Obama will unveil his “series of specific proposals” streamlining and reorganizing regulation on June 17, White House spokesman Robert Gibbs said…

Geithner has been a proponent of so-called say-on-pay rules since taking office. In a May 18 speech in Washington, he said that giving shareholders a vote on compensation would bring a “kind of disclosure that can help a lot.”

In developing the executive compensation rules, the Treasury must reconcile the Obama administration’s initial pay policy with measures since enacted by Congress.

Senate Banking Committee Chairman Christopher Dodd added a provision to the $787 billion stimulus legislation passed in February that tightened pay restrictions at firms that took government capital, while also making it easier for banks to repay their aid to escape the new regulations.

Dodd’s provision restricts bonuses for senior executives and the next top 20 employees at companies getting more than $500 million from Treasury’s financial-rescue fund. Limits on bonuses apply to other companies on a sliding scale based on how much assistance they received.

The Obama administration’s original proposal, released Feb. 4, limited salaries and required bonuses to be paid in restricted stock. This was intended to provide incentives for bank executives to consider firms’ longer-term interests, without setting an overall cap on compensation.

Geithner hasn’t said how he plans to reconcile the two policies, other than to say that the Treasury will implement the law

Exactly where does the Federal Government have the right to decide such thing?

This article was posted by Steve on Wednesday, June 10th, 2009. Comments are currently closed.

9 Responses to “Obama Wants Stockholders Say On Pay”

  1. MinnesotaRush says:

    Hey!!! o-blah-blah!!! How about annual COMPLETE and publicly posted compensation (from all sources) disclosures by every elected official in DC!!!

    Us taxpayers need to have a bigger say and SEE what’s going on with our “execs” pay .. on top of the table and under the table.

    And o-blah-blah!!! How ’bout when we find someone “misrepresenting” their “circumstances” .. or have $90,000 in their flooded freezer .. they suffer immediate and complete expulsion from their jobs.

    How about that o-blah-blah, ya chump. Not chimp .. chump.

    • neocon mom says:

      Really, how hard would it be? Any one of us only has two senators and one rep to check up on–they could show us their operating expenses–how many millions they spend to run their offices. Pelosi said how important it is to inventory our whole lives nowadays, let her lead by example.

  2. tranquil.night says:

    All in the name of accountability, transparency, and responsibility with the taxpayers money.
    All in the name of the economy.
    All in the name of.. BHO.

    When Timmy talks he doesn’t even realize he’s talking about people. All he sees is numbers. I wonder what it’s like to see the world with his eyes. I bet it’s a lot like looking at a computer screen of the Matrix. Just a bunch of falling green numbers and symbols doing their part to keep the big machine runnin’. Oh, and so much for getting outta TARP clean, eh businesses?

  3. Howard Roark says:

    When I think of the massive overhead of beaurocratic regulations on what is turning out to be many, many US companies…all I see is the slow emergence of a totalitarian regime.

  4. proreason says:

    I’ll support this as soon as every member of Congress and every staffer in the white house has to fully disclose all means of compensation and all current assets.

    Then, let the country vote on THEIR compensation, one by one.

  5. amber says:

    I LOVE, LOVE, LOVE this idea!!!! This would be great! I love it so much that I want consumers of education and citizens to be able to choose the salary of government officials and the salary of people in the dep of ed.

    I went to one of the best high schools in MN and my husband went to the worst. The worst one has a superintendant that makes over $40,000 a year more than mine does; a principle who makes over $20,000 a year more than mine and over the average and yet that school graduates 20% less students and the ones they graduate are questionable since over 50% of their students never MEET the reading and math requirements on the mandatory standardized tests. Since they bagan checking schools for AYP (adequate yearly progress) they have passed ZERO times. It is time for the “stock holders” to determine their salary and who gets fired.

    It is also time for the citizenry to approve or disapprove all travel expenses of government officials, including the president. It is time for us to say “NO” to congressmembers retirement benefits, they must share our government retirement (Social Security) and PAY INTO IT! It is time for someone to walk up to the plantation and tell the Obamas, “it is not OK to use school children to farm your plantation, it is against child labor laws.”

    So, Yes, I think this is a great idea.

    • Right of the People says:

      I’m with you Amber. I think we all should vote on their pay and their job status. If they aren’t doing their jobs like so many of them aren’t, out they go!

  6. tranquil.night says:

    Obama started his presidency in 2nd gear bringing socialism here, honestly I think with stimulus, porkulus he kicked it up to 3rd gear, with GM and Chrysler out, Cairo, N. Korea and now this latest move we might safely call this 4th gear. They’re already panicking at the White House because it’s dawning on them that they’re hitting critical mass on this now and I don’t doubt we see this hit 5th gear very, very soon. That’s when hopefully the American people see hit the brakes and throw this putt-putt sized car called the Obamanation in reverse.

  7. pdsand says:

    Of course he’s only interested in shareholders having such a power because the government intends to remain a shareholder for quite some time. I even saw something the other day where they wanted to change the non-voting preferred shares to common shares so the government could vote on such things. Despicable.

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