Thread: Report: Obama's Executive Pay Limits Have Loopholes

Report: Obama's Executive Pay Limits Have Loopholes

Friday, February 6, 2009 10:41 AM

President Barack Obama's crackdown on Wall Street pay contains loopholes, and may have limited impact in restraining compensation, the Wall Street Journal said, citing executive-pay consultants and management attorneys.

Some compensation professionals are already pointing out potential holes in the rules, including tactics such as changing executives' titles or rearranging pay packages, the paper said.

Obama set a $500,000 annual cap on executive pay and imposed other restrictions on companies that receive money from the Treasury Department's Troubled Asset Relief Program, or TARP.

The Journal said just as past attempts by the government to restrict executive pay largely backfired, the new curbs may also have unintended consequences, citing its sources.

Some critics suggested that the restrictions be retroactively applied to companies that already have received federal bailout cash, the paper said.

The critics noted that the most stringent restrictions likely would affect only a few firms and others could avoid some of the curbs by putting extra pay to a shareholder vote.

Others believe the plan does not limit total compensation because it allows companies to boost awards of restricted stock, the paper said.

The Senate voted on Thursday to ban bonuses for top executives at banks or companies receiving taxpayer money from the Treasury Department's $700 billion bailout fund.

http://moneynews.newsmax.com/economy/ex ... 79065.html

Yes, it should be retroactive! We are in this mess because of retro actions by so many of these institutions who managed to give out over $18 billion in bonuses while crying for taxpayer money. Stockholders (which now include the American public) should be given a bigger voice in bonus dispensation. And Obama said that okay, these honchos should be paid in restricted stock (if at all), restricted stock that will only be able to be sold once the company has paid the government back completely.
At Drexel Burnham Lambert in the early 80s, after two years of work, I was awarded 13 weeks pay as a Christmas bonus, because of the junk bond shenanigans of Mike Millken, who was arrested and brought down the firm. Everyone took the money and ran, even though the majority had nothing to do with the junk bond trading on the west coast. This has been a tradition for more years than I was ever involved in the business, and fie on anyone messing with tradition including the new stockholders like the US taxpayer. Hiss!

Obama is 10 times the crook that Bush was.