I heard Sen. Charles Grassley on NPR yesterday, talking about the executive compensation rules in the bailout bill. Turns out the rules only apply to entities participating in TARP. Problem is, the Treasury department decided TARP isn't the way to go. Thus, I'm pretty sure there are no restrictions on executive compensation for those organizations getting bailout funds. Thoughts?
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"Congress has spoken to this issue through its audible silence."
Anyone ever notice they beat the daylights out of the definition of a child, but they don't spend much time at all defining "parent"? -
It seems there was a last minute change to the provision dealing with the executive compensation rules by stipulating that it would apply only to firms that received bailout funds by selling troubled assets to the government in an auction, which was the original plan. Because auctions were not used for any of the $335 billion committed so far from the rescue package and in the future it doesn't sound like there will be any, the change has effectively repealed the law dealing with extravagant pay for top executives, creating a nice loophole for these companies.
The justification from the companies is that these are not lavish bonuses, they are "retainer compensation". They need to pay these irreplaceable executives to retain their services.
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