CEO Pay LoopholesJanuary 12, 2009 - by Donny Shaw
>The heads of bailed-out banks could still receive nearly unlimited pay under a new Democratic proposal to rein in executive compensation for firms participating in the taxpayer-funded Wall Street bailout, according to at least one House Democrat, who hopes to add tighter restrictions this week.
>Rep. Brad Sherman (D-Cal.) predicts that new legislation aiming to limit executive pay for firms helped by the Troubled Assets Relief Program (TARP) leaves loopholes allowing bank CEOs to reap millions of dollars even as taxpayers spend hundreds of millions to rescue their companies. Sherman said the new proposal takes steps to curb executive bonuses, but places no limit on “$1 million-per-month salaries” and other lavish perks, leaving corporations with broad freedom to pay their CEOs whatever they choose.
>“My fear is that the bill will prohibit bonuses but will be a little unclear about stock options,” Sherman said on the House floor Friday. “That it will prohibit leasing the corporate jets, but will allow the companies to charter the corporate jets; and that it will put limits on bonuses but no limits on salaries.”
You can bet that if the loopholes are in the legislation, they’ll be in any informal agreement between Obama and Frank as well.