Bailout Talks Get Stuck on Executive Pay

Senate wants to rein in excesses, but lobbyists push back
By Jason Farago,  Newser Staff
Posted Sep 24, 2008 6:08 AM CDT
Richard Shelby, ranking Republican on Senate Banking Committee, talks with Treasury Secretary Henry Paulson, Fed Chair Ben Bernanke, and committee chair Chris Dodd, Tuesday, Sept. 23, 2008.   (AP Photo/Susan Walsh)
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(Newser) – As Washington continues to wrangle over the terms of the Wall Street bailout, one major sticking point has been executive pay packages, with many in Congress looking to punish CEOs seeking taxpayer aid. While lobbyists are pushing back hard, some kind of restraint on compensation seems unavoidable, reports the New York Times. Predicts Arthur Levitt, former head of the SEC: “The golden egg has disappeared.”

Chris Dodd, the senator chairing this week's testimony, said that the "authors of this calamity" could not expect to profit from it. But proposals for limiting executive pay are still vague. One proposal would stretch executive pay over several years, forcing CEOs to stay on board; another is a "claw-back" provision, which will force execs to hand back money if their firms' results turn out to be overstated. A ban on severance payments is also on the list.