JOIN USUS mulling change in executive pay kitty
“Obama administration officials are contemplating a major overhaul of the compensation practices in the financial services industry, moving beyond banks to include more loosely regulated hedge funds and private equity firms,” The New York Times has reported.
The daily said Federal policymakers have been looking at ways to ensure that pay is more closely linked to performance. In the wake of the economic turmoil, extravagant pay packets for top executives, especially on the Wall Street, has come under severe criticism from several quarters. Recently, the US imposed restriction on the compensation for companies receiving funds from the government. The daily said ideas under consideration include expanding the existing regulatory powers of the Securities and Exchange Commission and Federal Reserve to obtain more information regarding compensation.
Seeking redemption
The daily said such a move would also mean greater oversight on compensation for banks that are seeking to return the TARP money in an effort to avoid the new strings attached to pay. “Bank executives have been pressing for more clarity on the pay issue out of fear that talented managers and traders might flee their companies for overseas institutions and boutique firms,” the report said. The daily added that President Obama and lawmakers are exploring ways to rein in excessive pay packages .