Thursday, June 11, 2009

Administration, Congress seek to rein in exec pay - Yahoo! Finance

Wrong on so many levels.
The Obama administration struck a delicate balance on executive pay Thursday, blaming flawed compensation packages for encouraging disastrous risk-taking but insisting it doesn't want to dictate how corporations reward their top people.

Gene Sperling, a top counselor to Treasury Secretary Timothy Geithner, conceded to a congressional committee that imposing compensation caps on companies could lead to a flight of talent.

"I can say with certainty that nobody in the Obama administration is proposing such a thing," he said.

Yet, at the same time, he and officials with the Federal Reserve and the Securities and Exchange Commission laid out a case for how payment structures rewarded short-term gains at the expense of long-term performance and contributed to the nation's financial crisis.
The fact that corporate America has put short term gains at the forefront rather than long term health of a company is no particular mystery.

However, not all companies work that way and it should be noted any administration or government plan to impose a structure is just wrong, on so many levels.

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