Is the Obama Administration Getting Serious About Executive Compensation? (No.)
I've not dug deeply enough into the administration's new financial compensation proposal to have a really strong opinion on the matter, but it certainly doesn't look like much. Put simply, it gives investors a bit more authority to organize "advisory" votes expressing disapproval on pay packages and sets a couple of rules gesturing at the importance of independent pay committees.
Weak sauce. Baseline Scenario blogger James Kwak agrees. Indeed, he thinks this is part of a larger trend:
The administration has decided that the economy depends on the banks and therefore it needs to keep the existing bankers happy. Or it has decided that executive compensation is just not such an important issue, and it would rather focus on others. (What, though? The Wall Street Journal reported on Tuesday that the administration is backing off plans to consolidate regulatory agencies.) Or, more likely, both.
These are reasonable positions, even if I don’t agree with them. But they are more evidence that the financial sector of 2010 will look more like the financial sector of 2006 than anyone would have thought possible just six months ago.
Law professor Brett McDonnell, meanwhile, has some ideas for how to craft a more effective approach to executive compensation, and, for that matter, the economic oligarchy that it's birthed.
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