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Will the SEC get new powers on executive pay?

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Can you imagine the anxiety in executive offices all across the country? Why is that you ask? The Obama Administration wants to give the SEC new powers on executive pay by forcing firms to let shareholders vote on executive pay and make executives who set pay schedules more independent.

Today's proposal, which is subject to Congressional approval, would cover all companies. The administration will also name a "special master" to monitor compensation plans for companies receiving government assistance.


The push is on. US Treasury Secretary Geithner is meeting with SEC Chairwoman Mary Schapiro and Daniel Tarullo, an expert on executive compensation. The Treasury will name Kennith Feinberg, attorney, to review compensation for companies receiving government assistance.

Senator Dodd has attached a provision to the $787 billion stimulus package that restricts executive compensation for top employees who receive more than $500 million from the Treasury's financial rescue fund.

Now these are grand proposals. However, we know that the lobbyists will gather in force and descend upon Congress to defeat any tampering with executive pay. They did this a few months ago when Congress attempted to limit executive pay to $500,000 for bank executives receiving TARP monies. The lobbyists with the help of President Obama leaned on Congress and shot this down. A watered down version was passed setting executive pay based on merit. Who determines merit is still a mystery. So we'll wait and see how far this one gets.

Do you believe that these proposals will be approved by Congress?

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Last updated: November 24, 2009: 08:08 AM

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