White House to step lightly with exec 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 through shareholder pressure and less management influence on pay decisions.
At the same time, the administration drew a sharp distinction between the overall corporate world and those institutions that have tapped the government's $700 billion Troubled Asset Relief Program.
The administration is ready to issue new regulations governing pay at companies that receive TARP assistance, with the toughest restrictions aimed at recipients of "exceptional assistance," such as Citigroup, Bank of America, General Motors and American International Group. The regulations, which follow legislation already passed by Congress, would limit top executives at publicly assisted firms to bonuses no greater than one-third of their annual salaries.
The administration has named Kenneth Feinberg, a lawyer who oversaw payments to families of victims of the Sept. 11, 2001, terrorist attacks, as a "special master" with power to reject pay plans he deems excessive at companies with the biggest injections of public money. Feinberg also would have authority to review compensation for the top 100 salaried employees at those firms.
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