Thursday, February 5, 2009

Obama Lays Out Limits on Executive Pay

Firms That Get Bailout Funds Face $500,000 Salary Cap, Must Disclose Luxury Purchases; A Move to 'Claw Back' Bonuses

The Wall Street Journal - WASHINGTON -- President Barack Obama laid out strict new regulations on executive compensation Wednesday, strafing Wall Street with tough talk as Washington asserts increasing control over a financial sector seeking more government funds.

President Barack Obama's unveiled new rules on executive pay caps and expense disclosure. WSJ's Jonathan Weisman speaks about what effects this could have on big business.

The plan, which represents the most aggressive assault on executive pay by federal officials, includes salary caps of $500,000 for top executives at firms that accept "extraordinary assistance" from the government.

It also restricts severance packages, known as "golden parachutes," for dismissed executives and requires the disclosure of policies on so-called luxury spending on things such as holiday parties, corporate jets and office renovations.

The rules do not apply retroactively, not even to those firms that have already been bailed out. But they will be imposed on all companies -- in the financial, auto or other sectors -- receiving any future help. This includes those that h

The administration called the latter part of the initiative the "name and shame" provision, designed to make companies think twice about indulgent outlays.

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