Dodd: Congress Could Legislate Executive Pay
Sen. Chris Dodd (D-Conn.) just said something that has been unthinkable up to now: Congress may be ready to make laws limiting executive compensation.
The pay of top executives, especially those that are receiving government bailout money, has become an emotional issue. The bailout packages themselves come with limits on executive compensation, such as forbidding big golden parachutes.
But Congress may be willing to go further, Dodd is saying at a hearing of his Senate banking committee this morning, and actually place federal limits on executive compensation.
"The acceptance of public funding carries with it a public obligation," Dodd said while opening his hearing, which is taking a look at how Treasury is doling out the bailout money. "They are entitled to expect that those who benefit from their sacrifices will act with appropriate restraint and purpose."
Dodd advocated "restraint and modesty" in executive compensation, and said Congress is "prepared to legislate" if compensation remains what he considers is excessive.
Dodd also called for foreclosure prevention. "It is confounding to me why the secretary of the Treasury and others refuse to understand that this is the heart of the problem," Dodd said. "Until we solve the foreclosure problem we will not have any hope of solving the larger problem."
-- Binyamin Appelbaum
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