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March 22, 2009
Administration Seeks Increase in Oversight of Executive Pay

By STEPHEN LABATON

WASHINGTON — The Obama administration will call for increased oversight of executive pay at all banks, Wall Street firms and possibly other companies as part of a sweeping plan to overhaul financial regulation, government officials said.

The outlines of the plan are expected to be unveiled this week in preparation for President Obama’s first foreign summit meeting in early April.

Officials said the proposal would seek a broad new role for the Federal Reserve to oversee large companies, including major hedge funds, whose problems could pose risks to the entire financial system.

It will propose that many kinds of derivatives and other exotic financial instruments that contributed to the crisis be traded on exchanges or through clearinghouses so they are more transparent and can be more tightly regulated. And to protect consumers, it will call for federal standards for mortgage lenders beyond what the Federal Reserve adopted last year, as well as more aggressive enforcement of the mortgage rules.

The administration has been considering increased oversight of executive pay for some time, but the issue was heightened in recent days as public fury over bonuses spilled into the regulatory effort.

The officials said that the administration was still debating the details of its plan, including how broadly it should be applied and how far it could go beyond simple reporting requirements. 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.

During the presidential campaign, Mr. Obama repeatedly urged regulators to adopt new rules to give shareholders a greater voice in setting executive pay for all public companies. And last month, as part of the stimulus package, Congress barred top executives at large banks getting rescue money from receiving bonuses that exceeded one-third of their annual pay.

The regulatory plan is being put together ahead of the meeting of the Group of 20 industrialized and developing nations in London. The meeting, which begins April 2, is expected to be dominated by the global financial crisis and discussions about better oversight of large financial companies, whose problems could threaten to undermine international markets.

An important part of the plan still under debate is how to regulate the shadow banking system that Wall Street firms use to package and trade mortgage-backed securities, the so-called toxic assets held by many banks and blamed for the credit crisis.

Officials said the plan would also call for increasing the levels of capital that financial institutions need to hold to absorb possible losses. In a sign of the economic system’s fragility, officials said the administration would emphasize that those heightened standards should not be imposed now because they could discourage more lending. Rather, they would be put in place after the economy began to rebound.

“The argument some are making is that they don’t want to be stepping on the gas pedal and the brake at the same time,” said Morris Goldstein, a senior fellow at the Peterson Institute for International Economics and a former top official at the International Monetary Fund.

Administration officials are also debating how tightly to supervise hedge funds.

A broad consensus has emerged among regulators and administration officials that hedge funds must be registered and more closely monitored, probably by the Securities and Exchange Commission. But officials have not decided how much the funds will have to disclose about their investments and trading practices. The officials spoke on condition of anonymity because the regulatory plan was still being formulated and they did not want to upstage Mr. Obama or Treasury Secretary Timothy F. Geithner, who will describe the plan when he appears before Congress on Thursday.

A central aspect of the plan, which has already been announced by the administration, would give the government greater authority to take over and resolve problems................http://www.nytimes.com/2009/03/22/us/politics/22regulate.html?_r=1&hp

The government can not regulate how private industry pays it's exec's. It is 'their' profit to do with as they please. It is NOT taxpayer's money. That is capitalism.

This is what happens when the government gets involved in the capitalistic, private business affairs. Not good.

And if obama continues on this course of devaluating and controlling corporations, who does he think he will get as private investors to jump start this economy? They will all sit back and watch obama fail...as he should if he continues to jeopardize the very foundation of this economy.

BIG GIANT MISTAKE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!.....especially after THEY VOTED THEMSELVES A RAISE......

WE NEED TO IMPEACH ALL OF THEM.........

I say no one shopuld get more then a 100000 if you have a business since there are to many working people who starve because of you all

Quoted from 191

I say no one shopuld get more then a 100000 if you have a business since there are to many working people who starve because of you all

AGAIN....Get informed and get educated...it is those people who actually employ people. I know how hard it is for you to mentally grasp...but humor us and try!

What a joke. Could not agree with BT more. Let's start by regulating Federal public sector pay. All Federal employees should have their pay cut 25% to "share in the belt tightening". These idiots can't get there own house in order and now they want to stick their becks into the private sector. Cuts are only for private sector, belt tightening is only for the private sector. Public sector demands more raises, perks and soaking of the shrinking middle class.

  No wonder Obama's popularity is dropping like a rock. PREDICTION: In one year Obama's popularity will be where Gov Patterson's is today-under 20%. There is a growing anger just below the surface-you don't know how right you are Senders.

OK, I dont' want to see the government regulate this stuff

But if my money is used to bail out failing businesses, then I believe that a leader has the right to regulate.  

Then no bailouts for these companies.  

well there are people starving and big executives are getting bonuses and never have to go hungry how is that right?

If Obama has his way we'll all be starving and everything will be equal just the way you like it Sal.

Sal proves his ignorance. AIG was bailed out because the pathetic Governor who should be thrown out and State Krats wanted to save it. Not one penny of taxpayer money should have been wasted on this. Like with Metrograft when you help one business all competitors suffer. They don't get it and will never get it. This is a smokescreen for Obama to start nationalizing all banks and limiting private sector pay. Coming soon green police to come into your home looking at your fireplace, heating bills and gun cabinet. Wake up already.

  Takin bout millionaires, how many millions did Obama rake in on that book he didn't even write? Try $10,000,000. These phony Kratz always want your money while they give nothing to charity and talk about helping "poor people". Obama is worse than Jimmy Carter, the biggest fraud who got 65% of the vote in this stunada State.

" The Obama administration will call for increased oversight of executive pay " - I have no problem with this sentence whatsoever. - Nor the rest of the article-  

Its your money now - why not have some people in charge of the people that are spending it-

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" The Obama administration will call for increased oversight of executive pay " - I have no problem with this sentence whatsoever. - Nor the rest of the article-  

Its your money now - why not have some people in charge of the people that are spending it-

It shouldn't have been our money to begin with. That is NOT capitalism. It should have been left up to private investors to pick up the pieces....and they would have if given the chance.

Quoted from 191

well there are people starving and big executives are getting bonuses and never have to go hungry how is that right?

give me examples in history of utopia (Atlantis is not allowed).......Sal,,,,I'm sure there is a big castle without anyone living in it
in Russia just waiting for your decorating touches.....

They should have been forced to use the 'systems' that their lobbying groups 'worked for'......us the laws to restructure via bankruptcy.......
they are trying to make the fall of the house of cards quiet instead of the big bang........

I say let the government make them use the systems the legislators/feds have made for use by these companies, should such a thing happen....
no different than the verdicts and sentencings used by judges in courts.......

there are systems and no one is using them....the government has usurped powers.....BIGGER PICTURE HERE.....WHY???????