Obama said,
... Wall Street bankers had given themselves $20 billion worth of bonuses -- the same amount of bonuses as they gave themselves in 2004 -- at a time when most of these institutions were teetering on collapse and they are asking for taxpayers to help sustain them, and when taxpayers find themselves in the difficult position that if they don't provide help that the entire system could come down on top of our heads -- that is the height of irresponsibility. It is shameful.Now, I'm fully on board with the idea that companies which receive government bailout/investment funds should limit the compensation given to executives. But, Congress failed to enact strong enough provisions in the EESA/TARP program which would give this notion any teeth. Paulson made sure of that. Obama and Geithner apparently want to change this. I personally doubt that they will follow through.
I'm curious if this concept of shameful irresponsibility extends to firms who don't have their hands out. In fact, even in good times, most companies keep their proverbial hands out... just via lobbying for protective legislation and/or corporate welfare. The general tone of the Democrats would seem to vilify such excess in good or bad times.
Do I agree? Well, sort of. But, again, this by no means should be managed via government regulation. Executive compensation is usually determined by the Board of Directors. The Board is chosen by the owners of the company. The owners are the shareholders. Do shareholders have an adequate voice in selecting the members of the Board? Yes. There are elections. While these elections may not seem fair, it is incumbent upon shareholders to use the election process to make changes if they truly want changes. Either that... or they should sell off their ownership.
I would support legislation to reform the Board selection process for publicly traded companies.
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