Obama’s New CEO Pay Restrictions

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The Obama administration is planning to increase its oversight of CEO pay. A top Treasury Department official, Kenneth Feinberg, will be charged with monitoring executive compensation at companies that have been bailed out more than once. Feinberg will have to approve any changes in compensation at those firms. The administration is also drafting broader principles that will apply to all banks and be enforced—or not enforced—by federal regulators. The New York Times explains:

The set of broad pay principles being drafted by the Treasury Department would authorize regulators to tell a bank to alter its compensation arrangements if it is found to encourage too much risk-taking. It is not clear how the government will define too much risk.

According to the two government officials, the new principles will not include bonus restrictions, although they will encourage banks to set compensation in a way that avoids rewarding risk-taking through short-term bonus awards. They will apply to a broad swath of financial companies, even the United States operations of foreign banks, as well as private companies like hedge funds and private equity firms.

It’s great that the administration finally seems to be taking the executive pay issue seriously. But back in 2007, then-Senator Barack Obama championed a weaker executive compensation reform that now seems to have gone by the wayside. It was called “say on pay,” and would have allowed stockowners a non-binding vote to express their displeasure with a company’s pay packages. As Mother Jones reported in March, a top Geithner aide, Mark Patterson, was one of the financial industry lobbyists fighting Obama’s “say on pay” legislation. Patterson and his Wall Street bosses won that battle, and Obama’s reform never became law. Now Patterson is Geithner’s chief of staff. This time around, though, it seems like Patterson’s former Wall Street bosses are the ones who aren’t getting much of a say on pay.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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