White House wants to limit executive pay, but ignores Fannie and Freddie outrages 

From today’s Washington Post article, “Administration seeks to change pay incentives at major firms“:

The Treasury Department said it is not looking to limit the total pay executives receive. Kenneth R. Feinberg, President Obama’s special master for compensation, wants to change pay incentives, giving executives a greater stake in the long-term performance of their firms. That would mean, for example, smaller up-front cash salaries and fewer perks, more compensation in the form of company stock and a longer wait to receive it.

“I see no indication whatsoever that the business community is paying any attention to the administration’s suggestions,” said Nell Minow, co-founder of the Corporate Library, an independent corporate governance research firm. “On the contrary, I think pay is worse this year than it’s ever been.”

I won’t necessarily defend outrageous CEO salaries, but I will note the following:

  • Congressional Democrats’ proposed tax of bonuses over $400,000 by Wall Street firms receiving by bailout money: 50 percent
  • Number of Wall Street Firms Receiving bailouts of $5 billion or more: 13
  • Size of bailout for government sponsored entities Fannie Mae and Freddie Mac: $111.6 billion
  • Combined 2009 compensation for top 12 execs at Fannie and Freddie: $42 million+
  • Amount Democrats are proposing to tax Fannie and Freddie employees: 0

Funny how these government sponsored entities receiving enormous bailouts aren’t subject to the same populist harumphing about executive pay as Wall Street firms. I’d bet it has something to do with the fact these GSEs are big Democratic strongholds, where the executives have included prominent (not to mention incompetent) Democratic insiders and the former boyfriend of the Democratic chairman of the House Banking Committee.

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Mark Hemingway

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