The compensation Czar

[ballpeen]

Linda Chavez: Compensation czar appointment is latest Obama power grab

Monday, June 15, 2009 2:54 AM

By Linda Chavez

 

 

The Obama administration is engaged in the most sweeping power grab in modern American history, but few people seem to care. Now, the president has decided he'll appoint a "compensation czar" whose job it will be to decide what constitutes fair pay for corporate executives.

 

The latest move -- the appointment of lawyer Kenneth Feinberg to oversee pay of the top employees at seven companies that have taken government funds -- may not seem radical, but it is. Earlier this year, in response to criticism of the retention bonuses paid to some executives at the troubled insurance giant AIG, the administration proposed capping executive pay at $500,000 at firms receiving government assistance through the Troubled Asset Relief Program. But Treasury Secretary Timothy Geithner abandoned that plan when he figured out that talented and experienced execs would simply bail on the company.

 

So now the administration is moving to Plan B: Forget about pay caps per se but appoint a government overseer to set pay individually.

 

Until now, in publicly traded companies that job fell to the board of directors and its compensation committee, whose legal and fiduciary responsibilities entail acting on behalf of shareholders. Directors are elected by the people who own the company: from individuals who own a few shares of stock to institutions and mutual funds that may own millions.

 

The government, primarily through the Securities and Exchange Commission, oversees the board's stewardship, while other entities play a role as well. The securities exchanges -- the New York Stock Exchange, NASDAQ, etc. -- also have rules that govern the conduct of boards of directors, including restrictions on who sets executive compensation. The compensation committee at publicly traded companies must be composed of entirely of independent directors.

 

Compensation committees act independent of management, but they don't act in a vacuum. They often hire consultants (who must have no ties to the company) to advise them on the best pay practices. They evaluate their pay structure compared to other companies of similar size and complexity or who are in the same line of business. They evaluate the performance of key executives against financial results, the achievement of personal and company objectives, and other criteria. It is a long and arduous process (for more than a decade I've served on and now chair the compensation committee of a NYSE company).

 

And the rules governing disclosure of executive compensation have become much stricter in recent years, especially since the enactment of Sarbanes-Oxley, federal legislation that passed in the wake of Enron and other recent corporate scandals.

 

The law now requires that, in addition to a compensation committee report on executive pay, management must produce an extensive compensation discussion and analysis to be included in proxy statements sent to all shareholders. The information includes a table showing exactly how much the CEO, chief financial officer, and three highest-paid employees in the company earn, including bonuses, stock options and grants, and what benefits and perquisites they are entitled to and their cost.

 

Similar information is provided for director compensation. If shareholders don't think they're getting their money's worth from these executives or directors, they can dump the board of directors at the next election. Or at least that's how it is supposed to work.

 

But enter the Obama administration to rewrite the extensive rules. Now one man -- the compensation czar -- is going to oversee this process at seven corporations. And who oversees him?

 

The Obama administration is filled with people who have little or no idea how the market works. Most have never drawn a paycheck in the private sector, much less had to meet a payroll or make a profit. But they're convinced they know how to run things, down to the last detail. There's no word adequate to describe the sheer arrogance of this group.

 

Linda Chavez writes for Creators Syndicate.

 

[ballpeen]

And along those lines.....

 

 

Speaking of power grabs:

 

 

 

OBAMA'S NEW REGULATIONS

By Neal Boortz @ June 17, 2009

 

Today is the day that Barack Obama unveils his plans for one of the most radical growths in government this country has ever seen. Obama's plan will give the government the power to seize companies that are considered "too big to fail" and could jeopardize the financial system. We aren't just talking about banks, folks. We are talking about ANY company.

 

OK ... I can't let this pass. Over a week ago, when Obama was first promoting his executive compensation limitations, I told you that it would be no time at all before Mr. Government Control was expanding his ideas to companies his administration deemed to be "too big to fail." Thus far Hugo Obama hasn't actually used the "too big to fail" language. Instead we are hearing things about companies who's failure, as the Lost Angeles Times puts it, "jeopardizes the financial system." As determined by who? As determined by Obama's henchmen, of course. Now ... here we are. Just how hard was that one to predict? Why, not hard at all, actually.

 

This is what our country has come to. Our Founding Fathers are rolling over right now at the thought that our imperial federal government will soon have the power to seize virtually any company that it wants. All we have to do is get some government hack, like our tax-cheat Treasury Secretary, to say that the failure of this company would be bad news for our economy ... and that the government needs to take it over. And Obama gets upset when he hears people refer to him as a Socialist. How sad.

 

Think all of this over for a second. Medicare. Medicaid. Social Security. Welfare Housing. Veteran's Administration hospitals. TSA. Homeland Security. Look at all the enterprises our wonderful Imperial Federal Government operates? Do you really think that the government operates any of these entities more efficiently than the private sector could? And now we are going to sit back while Barack Obama sets up a system where he can seize pretty much any company he wants so long as he can make some argument that the failure of that company would be troublesome.

 

While we're at it, why not go ahead and create another government agency? You really can't have enough government, can you? Obama's new regulatory body will be called the Consumer Financial Protection Agency. An administration official says that the agency will "protect consumers of credit, savings, payment and other consumer financial products and services, and to regulate all providers of such products and services." It will have the authority to write and enforce rules for financial firms. This agency will enforce so-called "fair lending" laws. Yeah ... that will work. Can't wait until we find out what the government seems to think is "fair."

 

Douglas J. Elliott, an economics fellow at the Brookings Institution and a former investment banker says, "As far as I can tell, the administration doesn't think it's as important to get that structure right as to get the rules right and make sure people are focused on acting the right way."

 

Acting the right way. Now government will be the one to determine whether or not these businesses are "acting the right way."

 

Could you have imagined when this last presidential election cycle started that we were going to end up with an administration that would be hell-bent on placing private businesses under government ownership? There were some people around who were warning you about that. They're called talk show hosts.

 

Elections have consequences.

 

 

http://boortz.com/nealz_nuze/index.html

 

 

This country is dead as long as this guy is President.

 

I hope it's only 4 years but am afraid he and his sheep will ruin it before then.

 

 

[Guest mz.]

This country is dead as long as this guy is President.

 

I hope it's only 4 years but am afraid he and his sheep will ruin it before then.

 

According to Chavez and Boortz now? Two more radio hosts who wish they were Rush.

 

I am sad that the paranoia/cynicism of the hard right is rubbing off on real people.

[ballpeen]

According to Chavez and Boortz now? Two more radio hosts who wish they were Rush.

 

I am sad that the paranoia/cynicism of the hard right is rubbing off on real people.

 

Chavez has a radio show??

 

Good god man...are you a mental midget??

 

No comments on the body of the postings?? All you can say is they are Rush wannabes??

 

[Guest mz.]

Chavez has a radio show??

 

Good god man...are you a mental midget??

 

Guess so.

 

Linda Chavez (born June 17, 1947 in Albuquerque, New Mexico) is an American conservative author, commentator, and radio talk show host.

 

No comments on the body of the postings?? All you can say is they are Rush wannabes??

 

I commented on them already. These are two folks who will comment on EVERYTHING this administration does, calling it socialism, knowing their readers/listeners don't even know what socialism even is. Fearmongering at its finest.

 

[Guest mz.]

And thanks for the "mental midget" comment, New Cal.

 

Paranoia can make folks mean.

[Legacy Fan]

This is a pretty serious leap-frogging of the SEC.

 

 

I'm noticing a trend with this administration.

 

Promise innovation and new, give more of the same.

[ballpeen]

And thanks for the "mental midget" comment, New Cal.

 

Paranoia can make folks mean.

 

LOL....I am really one of the nicest guys you would ever meet.....really man, not trying to rag you...I just think you take a blind mans view of political topics.

 

If we ever meet, the first two beers are on me and the rule is we don't talk politics or religion....those are my bar rules.

 

We can talk football where we seem to agree when you post over there.

 

I am sure we agree on girls because even the most homely girl ever born has some quality to her(not saying you eye the less than pretty ones)

 

I am good in any crowd from black tie to honky tonk...product of being a educated professional redneck...I can talk wine to moonshine, fund raisers to panhandling, and most in between.

 

You ever get to games??

 

[Guest mz.]

I would love to come to a game. I haven't been back to Cleveland since my parents moved to Jersey when I was two. The only Browns games I've ever seen live were a couple preseason games at the Meadowlands and a Belichick-ruined game in the Georgia Dome when I was in college.

 

I'll take two Stellas, and yes, I'm smart enough to read off of the menu.

[Mr. T]

This is a pretty serious leap-frogging of the SEC.

 

 

I'm noticing a trend with this administration.

 

Promise innovation and new, give more of the same.

 

 

I believe Obama is pushing us further into government control, as if we were not allready a nanny state from cradle to the grave. Obama wants to even tell us how we can and if we can think and figure things out for ourselves.

[choco]

look around you.......he maybe right.

 

 

take away grocery stores and electronics......80% of people would die and more than half the remaining would die of boredom.