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While many posters rejoice in Obama proposing caps on executive compensation and golden parachutes for companies getting government assistance (and I generally agree with the posters), another item received little notice:
The administration also will propose long-term compensation restrictions even for companies that don't receive government assistance, Obama said.
Those proposals include:
• Requiring top executives at financial institutions to hold stock for several years before they can cash out.
• A Treasury-sponsored conference on a long-term overhaul of executive compensation.
A mixed bag of possibilities. Not being allowed to cash out while still employed is one thing. However to not be able to cash in for several years after they are no longer calling the shots is another thing.
While many posters rejoice in Obama proposing caps on executive compensation and golden parachutes for companies getting government assistance (and I generally agree with the posters), another item received little notice:
The administration also will propose long-term compensation restrictions even for companies that don't receive government assistance, Obama said.
Those proposals include:
• Requiring top executives at financial institutions to hold stock for several years before they can cash out.
• A Treasury-sponsored conference on a long-term overhaul of executive compensation.
I object to this proposal, companies not requesting government assistance shouldn't be restricted in setting compensation.
The three items in the proposal (I know, you've only listed two) are not so bad, in my opinion. Asking executives to hold stocks they've acquired as compensation for a certain time period gives those executives additional incentive to see that their company performs well. And the second item, the one you left out, is a non-binding request that executives submit their compensation agreement to the stockholders of a company. I think this is an excellent idea. It's non-binding, but it empowers stockholders by providing them with key information, and by allowing them more opportunity to confront boards of directors who've been offering these ridiculous compensation packages. The third item--a Treasury-sponsored conference to assess over the long-haul what kind of compensation is appropriate for top executives, is just another government conference. But a discussion of these packages is certainly timely right now.
I disagree, compensation should be set by the Board of Directors, selected by the stockholders. Stock options can be cashed as they deem appropriate.
This reminds me soooooo much of the initial discussions concerning smoking...
As to the Board of Directors setting compensation, the proposal is NON-binding, so it really is just for the sake of transparency. And while I certainly see your point about stock options, I think you can appreciate that asking executives to hold them does give the executive incentive to make them more valuable over time. I agree with you wholeheartedly that since these companies are not receiving federal funds, requiring them to do anything is out of line. But suggesting that they overhaul the way they make decisions regarding compensation, and giving them specific ideas of how to do that, seems more like constructive criticism rather than government interference.
While many posters rejoice in Obama proposing caps on executive compensation and golden parachutes for companies getting government assistance (and I generally agree with the posters), another item received little notice:
The administration also will propose long-term compensation restrictions even for companies that don't receive government assistance, Obama said.
Those proposals include:
• Requiring top executives at financial institutions to hold stock for several years before they can cash out.
• A Treasury-sponsored conference on a long-term overhaul of executive compensation.
I have one thing to say to this...
Asking for government assistance is like making a deal with the devil.
Evenutally the devil comes to collect his due and in the process he will take us all with him.
Unless the entire world follows the plan this is just a disastrous plan aimed at sending more of our talent elsewhere. No better than bringing people in that get doctoral degrees then sending them on their way off to the competition.
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