Some sensible new proposals for curbing corporate greed in America
ALTHOUGH the debate about excessive executive pay in America has been heated, cool heads prevailed when the time came to tackle the problem. On Wednesday June 10th Tim Geithner, America’s treasury secretary, said the government would not impose fierce restrictions such as caps on pay. Nor would it meddle in the detail of compensation packages. Instead, it wants companies to adopt a series of broad principles on pay and it intends to make it easier for shareholders to ensure that they do so.
This approach will infuriate pitchfork populists, who were hoping the Obama administration would impose a regulatory straitjacket on corporate pay after an outcry earlier this year over hefty bonuses dished out at firms rescued with taxpayers’ cash. But Mr Geithner warned that such an approach would ultimately be “counterproductive”. In practice only firms that have been bailed out will face stiff restrictions on bonuses and other forms of pay. Some will have to submit senior managers’ compensation for review by a new, government-appointed “special master”.
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