I know this piece from the New York Times is over a week old, but thus far, I haven't seen any evidence that the report has hit Barack Obama's expiration date:
Depending on the outcome of the discussions, the administration could seek to put the changes into effect through regulations rather than through legislation.One proposal could impose greater requirements on company boards to tie executive compensation more closely to corporate performance and to take other steps to ensure that compensation was aligned with the financial interest of the company.
The new rules will cover all financial institutions, including those not now covered by any pay rules because they are not receiving federal bailout money. Officials say the rules could also be applied more broadly to publicly traded companies, which already report about some executive pay practices to the Securities and Exchange Commission.
In the first place, every company already tries to align management interests with those of the company. Stock options were such an attempt, on the belief that the stock price was related to the company's success. Bonuses were such an attempt, on the belief that the board would best be able to determine how well management was performing.
There is exactly zero evidence that the government has any better idea of how to do this than companies.
But the really insidious part is the idea that the federal government - through regulation - can limit executive pay at private companies traded on a private stock exchange. Why only executive pay? In fact, such limitations would inevitably trickle down to workers at all levels, as each pay limit acted as a ceiling on the level below. And since doing business requires a state license, there's no reason in principle why such limits should be restricted to publicly-traded companies.
The government is slowly edging toward determining - or threatening to determine - your salary.
What's actually going on here is not-so-subtle extortion. NPR, the day after Obama's economic presser, pointed out that Michelle Obama had said that, in effect, if you play ball with us, we'll protect you. What you're allowed to get paid would now be dependent on how well-connected you were with the administration, likely proportional to how much of that money you were willing to turn over to its now-permanent political campaigns.
We ought not to have to rely on the current administration's political whims to protect our rights to set salaries in our own companies. That's what the Constitution is for.
This is, simply, lawlessness under cover of law.
Progressively more expensive. Progressively more restrictive. Progressively more intrusive.
