Will the financial crisis slash the pay of executives who helped get us into the mess? Probably not, if past trends continue, writes David S. Hilzenrath in the Washington Post. When government in the past has fought to curb bosses’ cash flow, corporate boards have generally found a way to skirt the spirit of the rules—often making executives even more money as a result.
The crisis has prompted new rules, such as a bailout caveat that aims to cut incentives that encourage risky executive moves. But past “uproars over executive compensation at most create short-run changes in pay,” notes an expert. Then, usually, “the government enacts some knee-jerk reactions that at the end of the day end up increasing executive pay” through boardroom manipulation.