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US to Expand Executive Pay Supervision
Administration to announce new rules, add pay-oversight chief
By Matt Cantor
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Posted Jun 8, 09 6:44 AM CDT
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(Newser)
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The Obama administration is set to announce new executive pay guidelines for banks and other corporations that have received bailout funds, the New York Times reports. Any company that’s taken two rounds of TARP cash—including Citigroup, Bank of America, AIG, GM and GMAC—will have to get pay changes approved by a new US compensation watchdog, Kenneth Feinberg, who oversaw 9/11 family payouts. But the new rules are also expected to set standards for companies that haven't enjoyed federal funding.
The goal is to give "broad pay principles" that would allow the Treasury Department to step in to prevent dangerous encouragement of risk taking. “This is the government trying to tell the TARP banks not to worry, because everyone else’s compensation will be monitored, too,” says a financial recruiter. It's not clear how stringent the regulations will be, or how excessive risk taking will be defined, the Times notes.