Administration seeks to tame corporate pay
Washington ? Talking tough but stepping gently, the Obama administration rejected direct intervention in corporate pay decisions Wednesday even as officials argued that excessive compensation in the private sector contributed to the nation’s financial crisis.
Instead, the administration plans to seek legislation that would try to tame compensation at publicly traded companies through shareholder pressure and less management influence on pay decisions.
At the same time, the administration drew a sharp line between the overall corporate world and those institutions that have tapped the government’s $700 billion Troubled Asset Relief Program.
The administration issued new regulations Wednesday that set pay limits on companies that receive TARP assistance, with the toughest restrictions aimed at seven recipients of “exceptional assistance.” Those firms are Citigroup Inc., Bank of America corp, General Motors Corp, Chrysler, American International Group Inc., GMAC LLC and Chrysler Financial.
The regulations limit top executives of companies that receive TARP funds to bonuses of no more than one-third of their annual salaries.
But in a significant expansion of authority, the regulations call for a special compensation overseer who will burrow into the pay practices of some of the country’s biggest enterprises.