INDIANAPOLIS (Reuters) - Democratic presidential candidate Barack Obama will push on Friday for passage of a bill to put the huge pay packages of some U.S. corporate executives under greater scrutiny.
The Illinois senator has introduced "say-on-pay" legislation that would give investors more of a voice in setting executive compensation packages.
"We've seen what happens when CEOs are paid for doing a job no matter how bad a job they're doing. We can't afford to postpone reform any longer," Obama said in prepared remarks for delivery later on Friday.
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Amid fears the U.S. economy may be in recession, many U.S. voters are anxious about a weakening job market, the mortgage crisis and higher gasoline prices.
At the same time, many are also expressing outrage over big pay packages given to executives of some of the companies at the center of the financial and mortgage crises, such as Bear Stearns Cos Inc and Countrywide Financial Corp.
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Clinton supports the "say-on-pay" bill.
moreWhat does this have to do with Bill Clinton? Triangulating:
What happened to that proposal is symptomatic of what happened to Clinton's approach to economic policy. During his campaign and first month in office, Clinton promised to deny tax deductions to firms that awarded their executives salaries over $1 million. "The tax code should no longer subsidize excessive pay of chief executives and other high executives," Clinton told business leaders at the White House. He defined "excessive" in true populist terms as "unrelated to the productivity of the enterprise." He also cited "the enormously increased rate of executive compensation in the last 12 years as compared with the compensation of workers."
But under pressure from the financial community, Clinton quietly backed off. In April, the administration announced a plan that was riddled with loopholes. For instance, CEO stock options would not be included in the $1 million limit, and firms could take a deduction on straight salaries over $1 million if stockholders approved.
linkA closure look and it's easy to see how this happened.
NOVEMBER 27, 2006
GOVERNMENT
A law he championed to curb compensation has backfired -- and pay packages have exploded
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Clinton's brainstorm: Use the tax code to curb excessive pay. Companies at the time were allowed to deduct all compensation to top executives. Clinton wanted to permit companies to write off amounts over $1 million only if executives hit specified performance goals. He called Crystal for his thoughts. "Utterly stupid," the consultant says he told the future President.
THE SHAME GAME
Now, 13 years after Clinton's plan became law, the results are clear: It didn't work. Over the law's first decade, average compensation for chief executives at companies in Standard & Poor's 500-stock index soared from $3.7 million to $9.1 million, according to a 2005 Harvard Law School study. The law contains so many obvious loopholes, says Crystal, that "in 10 minutes even Forrest Gump could think up five ways around it."
From the Internal Revenue Service to corporate boardrooms, Clinton's remedy has become the biggest inside joke in the long history of efforts to rein in executive pay. It has allowed companies to take deductions for executive pay tied to goals as vague as "individual achievement of personal commitments" (BellSouth Corp.(BLS ) or improving "customer satisfaction" (Dell Inc. (DELL )). Energy giant AES Corp. (AES ) for a time demanded that its top people maintain a workplace that was "fun."
"We were trying to shame companies into changing their behavior," says former Clinton senior adviser Bruce Reed. "And companies have been shameless in ignoring what we did." Or perhaps just astute in exploiting the flimsiness of Section 162(m) of the IRS code, as the measure is formally known. Reed acknowledges that the Clinton team deliberately watered down the proposal to make it more palatable by, for example, not applying the performance requirement to the award of stock options. Clinton did not return calls for comment.
linkWho is
Bruce Reed:
Bruce Reed is president (since 2001) of the Democratic Leadership Council (DLC). He is credited with coining the welfare reform catchphrase, "end welfare as we know it." <1>
Reed served as chief speechwriter for Tennessee Senator Al Gore from 1985 to 1989. He was founding editor of the DLC magazine, The New Democrat and served as policy director of the DLC from 1990 to 1991 under DLC Chairman and Governor of Arkansas Bill Clinton. In 1992, he was deputy campaign manager for policy of the Clinton-Gore presidential campaign. During the Clinton presidency, Reed served as chief domestic policy advisor and director of the Domestic Policy Council, and helped to write the 1996 welfare reform law known as the Personal Responsibility and Work Opportunity Act.
Reed is a native of Coeur d'Alene, Idaho, and the son of Idaho State Senator Mary Lou Reed. He attended Princeton University and earned a master's degree in English Literature from Oxford University as a Rhodes Scholar.
Reed is the author of the taunt, "change you can Xerox," from the February 21, 2008 presidential primary debate in Austin, Texas. Reed supplied Senator Hillary Clinton with the phrase to invoke accusations of plagiarism against rival Senator Barack Obama while parodying his campaign slogan: "Change you can believe in."<1>
It is time to summon the strength of America's character once again. Today, the nation faces challenges as great as any we have ever faced: Radical extremists are doing everything they can to destroy our way of life. The war on terror will last a very long time, as the London bombings this summer reminded us.
The United States faces competitors in China and India that, if we fail to act, have the potential to eclipse our economic might. Americans can no longer count on the bedrock promise that by working hard and taking responsibility, they can rise as high as their God-given potential. Parents are determined as ever to give their children lives of meaning and purpose, and to teach them right from wrong, but they face more obstacles than ever. And at a time when we should be coming together across party lines to confront these threats, our politics are polarized, our leaders are divisive, and our political system is badly broken.
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Al From and Bruce ReedThat's about CEO pay. This is about taxpayer money:
By KENNETH P. VOGEL | 4/10/08 6:32 PM EST
The Clintons have made a $100-million fortune since leaving the White House, but a Politico analysis found that hasn’t kept Bill Clinton from taking full advantage of the publicly funded perks offered to ex-presidents.
In fact, his presidential retirement benefits cost taxpayers almost as much as those of the other two living ex-presidents combined.
The price tag for Clinton’s federal retirement allowance from 2001 through the end of this year will run $8 million, compared to $5.5 million for George H. W. Bush’s and $4 million for Jimmy Carter’s during the same period.
Since 2001, Clinton has received more of almost every benefit available to former presidents — from his pension to his staff’s salaries and benefits to supplies. His $420,000 phone bill and $3.2 million office rent tab both nearly surpassed the totals rung up for those purposes by Bush, Carter and the late former presidents Gerald Ford and Ronald Reagan combined. As a group, they spent $484,000 on telephone service and $3.8 million on rent in the same span. The figures come from congressional reports studying the presidential retirement program and from summaries of annual budget requests by the U.S. General Services Administration, which administers the program, created to allow former presidents to enjoy dignified retirements without having to take jobs that demean or commercialize the presidency.
Some of Clinton’s greater spending stems from the fact that he served eight years in office, qualifying him for a federal health insurance plan unavailable to one-term presidents, and that he selected office space in the high-priced Manhattan market.
moreDidn't Reagan serve two terms?
This is about Bill's character:
Former President Bill Clinton offered this bit of revisionist history of his wife's Bosnia story in Jasper, Ind., today, one riddled with a veritable sniper fire of errors -- ones necessitating footnotes.
Watch the former President's misstatement-riddled explanation for his wife
HERE.
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