Let's talk about Czars

[SuBe]

http://online.wsj.com/article/SB124416737421887739.html

White House Set to Appoint a Pay Czar


WASHINGTON -- The Obama administration plans to appoint a "Special Master for Compensation" to ensure that companies receiving federal bailout funds are abiding by executive-pay guidelines, according to people familiar with the matter.

The administration is expected to name Kenneth Feinberg, who oversaw the federal government's compensation fund for victims of the Sept. 11, 2001, terrorist attacks, to act as a pay czar for the Treasury Department, these people said.



Associated Press

Kenneth Feinberg, who oversaw payouts to 9/11 victims, will keep tabs on executive pay at companies in bailout.

Mr. Feinberg's appointment could be announced as early as next week, when the administration is expected to release executive-compensation guidelines for firms receiving aid from the $700 billion Troubled Asset Relief Program. Those companies, which include banks, insurers and auto makers, are subject to a host of compensation restrictions imposed by the Bush and Obama administrations and by Congress.

Wall Street has been anxiously awaiting more details on how the rules will be applied. "The law is confusing and a bit ambiguous, and so we're looking for certainty as to how to structure pay incentives," said Scott Talbott, senior vice president of government affairs for the Financial Services Roundtable, a trade association.

The move comes amid a series of sometimes-overlapping efforts to curb pay at financial firms following perceived industry excesses that led to the lending boom and bust.



The Obama administration earlier this year issued guidelines that include limiting salary for top executives at some firms receiving TARP funds and requiring that additional pay be in the form of restricted stock, vesting only after the company repays its debt, with interest, to the government. Congress then chimed in with even tougher rules curbing bonuses for top earners at firms receiving TARP money. As part of that effort, lawmakers barred those firms from paying top earners bonuses that equal more than a third of their total compensation.

The White House has been wrestling with how to marry those two efforts, which in combination are more punitive than administration officials had intended.

The government is also pursuing a separate revamping of financial-sector rules that could change industry compensation practices more broadly. For instance, the Federal Reserve is considering rules that would curb banks' ability to pay employees in a way that would threaten the "safety and soundness" of the bank.

Mr. Feinberg is expected to focus on pay restrictions related to firms receiving TARP bailout funds, helping companies to interpret the rules and ensure that they are being followed.

For instance, companies have been confused about whether to pay 2008 bonuses, since restrictions on incentive pay didn't go into effect until early 2009. Some firms have made the payments while others have held off. Many firms are also unsure whether the "top earners" targeted by Congress include rank-and-file employees or just executives.

Mr. Feinberg will report to Treasury Secretary Timothy Geithner, but he is expected to have wide discretion on how the rules should be interpreted. Firms likely won't be able to appeal decisions that Mr. Feinberg makes to Mr. Geithner, according to people familiar with the matter.
Mr. Feinberg, founder and managing partner of the law firm Feinberg Rozen LLP, spent several years overseeing payouts totaling more than $7 billion to victims of the 9/11 attacks. He personally reviewed every claim, approving or denying awards and allocating sums to be paid out of the Treasury.

Write to Deborah Solomon at [email protected]

 

[SuBe]

From Neal Boortz Blog:

The Obama administration has laid out more details on how the government would like to see executives at corporations get paid. Now keep in mind that this is for all companies, not just bailout companies. Any publicly traded company. Here are the guidelines:



assuring pay reflects corporate performance


using standards beyond the company's stock price


basing compensation on long-term performance, particularly by asking executives to hold stock for longer periods of time


giving corporate risk managers more authority to prevent excessive risk-taking


reexamining so-called "golden parachutes" and other retirement packages


promoting transparency and accountability in how compensation committees set pay


Geithner also wants Congress to adopt "say on pay" legislation that would give shareholders the ability to hold non-binding votes on compensation levels.



But now for the "good" news ... Barack Obama has decided that the government will not put a cap on how much executives are paid. Somehow I'm not buying it. There's going to be something in the mix that will give the government some sway over what private companies pay their executives. Even though tax cheat Tim Geithner says, "We do not believe it's appropriate for the government to set caps on compensation.", they'll figure out a way. One obvious tactic would be to eliminate corporate tax deductions for pay above a certain level. The Obama crowd understands that Americans are getting really weary of all this government intervention, so they're sounding a bit conciliatory today. With all of these 'guidelines' and 'restrictions' I am sure that the government is going to have a lot more say than any of us would ever imagine.

 

[moraldeficiency]

Sweet jesus, it's almost like they want these guys to earn the money they make and be accountable like the rest of us.

I'm for all of this on some many levels, call me wacky but I actually believe in equality.

 

[StorminNorman]

Sweet jesus, it's almost like they want these guys to earn the money they make and be accountable like the rest of us.

I'm for all of this on some many levels, call me wacky but I actually believe in equality.

Equality should never been more important than Freedom.

 

[moraldeficiency]

true freedom can only exist with anarchy (and I'm down if you are), the best type of communal freedom that we can expect is based in its core from equality. When certian people begin to have more rights than others based on birth you go back to royality and freedom in any form is gone.

 

[StorminNorman]

I disagree. I think too much liberty is removed in the imaginary search for Freedom. Companies should have the right to pay their execs whatever they want, it's their company. Companies should be able to employ whomever then want, it's their company.

The government forcing equality is tyranny with a nicer coat of paint.

 

[moraldeficiency]

I disagree. I think too much liberty is removed in the imaginary search for Freedom. Companies should have the right to pay their execs whatever they want, it's their company. Companies should be able to employ whomever then want, it's their company.

The government forcing equality is tyranny with a nicer coat of paint.

Wouldn't it be the shareholder's company? They're the ones that own it. But when exes come in and reformulate their own contracts to their own betterment and damaging the company while at the same time insuring the stockholders cannot ask for accountability or even transparency of their own employee, that's just bad on all sorts of levels.

Would you hire someone and allow them to give themselves their own raises, severence packages, perks and then decide not even to let you know what they've decided? What's more you later find out that they have been lying on reports to further enhance their own bonus' straight out of your pocket? If so I really want to work for you.

You can make that tyranny argument work with everything from a police force to the department of parks and recreation, it's just a dodge. We have laws and standards because without them human beings (flawed as we are) will almost never work for our own benefit. I see no reason not to have rules and laws apply to buisness as well, especially when those buisness have made up their own rules and laws and forced them on their consumers and shareholders, structuring the system so they are protected from even having to be accountable to their "bosses" and consumers.

Think of it in this way, which system yields better results: The pay system in Basketball (which has some rules and order to ensure some level of equality while still awarding massive contracts and avoiding major stikes) or Baseball where you can just muscle your competition into nothingness and massive strikes can be threatened every freaking year?

 

[amazingfantasy15]

I disagree. I think too much liberty is removed in the imaginary search for Freedom. Companies should have the right to pay their execs whatever they want, it's their company. Companies should be able to employ whomever then want, it's their company.

The government forcing equality is tyranny with a nicer coat of paint.

I'd agree with this until they start taking money from the government. If they're making their own money, fine they can have freedom, but now they're only still in business because the government gave them a handout, now they need to be accountable to the government and their bosses, us.

 

[StorminNorman]

Wouldn't it be the shareholder's company? They're the ones that own it. But when exes come in and reformulate their own contracts to their own betterment and damaging the company while at the same time insuring the stockholders cannot ask for accountability or even transparency of their own employee, that's just bad on all sorts of levels.

Would you hire someone and allow them to give themselves their own raises, severence packages, perks and then decide not even to let you know what they've decided? What's more you later find out that they have been lying on reports to further enhance their own bonus' straight out of your pocket? If so I really want to work for you.

And if this was the shareholders going in and wanting to mess with executive pay, I would have no problem with it. It's when the government, especially THIS government, starts going in and deciding what's right and what's wrong that I worry.

You can make that tyranny argument work with everything from a police force to the department of parks and recreation, it's just a dodge. We have laws and standards because without them human beings (flawed as we are) will almost never work for our own benefit. I see no reason not to have rules and laws apply to buisness as well, especially when those buisness have made up their own rules and laws and forced them on their consumers and shareholders, structuring the system so they are protected from even having to be accountable to their "bosses" and consumers.

Comparing the police force to government's in Washington deciding what executive pay is is a bit of a stretch. I don't support anarchy, I just also don't support government butting it's nose where it does not belong.

Think of it in this way, which system yields better results: The pay system in Basketball (which has some rules and order to ensure some level of equality while still awarding massive contracts and avoiding major stikes) or Baseball where you can just muscle your competition into nothingness and massive strikes can be threatened every freaking year?

And those pay systems were made internally, not imposed by the government.

It's also worth pointing out that in baseball, the small market, low payed rosters still win Championships over the New York Yankees and Boston Red Sox of the world.

 

[StorminNorman]

I'd agree with this until they start taking money from the government. If they're making their own money, fine they can have freedom, but now they're only still in business because the government gave them a handout, now they need to be accountable to the government and their bosses, us.

I do agree that private companies that have been run into the point where they need public funds should be treated differently. Then again, I don't think the government should be in the business of bailing out private companies anyway.

 

[amazingfantasy15]

I do agree that private companies that have been run into the point where they need public funds should be treated differently. Then again, I don't think the government should be in the business of bailing out private companies anyway.

Yeah, but we're already there, so I'm glad something is finally being put in place to account for the money being given these companies. Especially since the companies couldn't account for the first half of the money they were given.

 

[moraldeficiency]

And if this was the shareholders going in and wanting to mess with executive pay, I would have no problem with it. It's when the government, especially THIS government, starts going in and deciding what's right and what's wrong that I worry.

Most shareholders couldn't if they wanted too, add to that none of the execs are required to show their bosses their contracts so you wouldn't know you're being screwed until that golden parachute is floating away and your buisness is going under. Also since the gov. is now putting up the money as well, OUR MONEY, then yeah I'd like to know it's not being completely wasted. I'm funny like that. Some standards and rules are essential to anything important, I don't see why buisness should be an exception. War even has established rules, and it's war.

Comparing the police force to government's in Washington deciding what executive pay is is a bit of a stretch. I don't support anarchy, I just also don't support government butting it's nose where it does not belong.

It is a streach, as is saying having some rules and accountability for the people that can completely tank this ecomony again if nothing is done to fix the situation is the loss of freedom and the beginning of tyranny. I was making the point that it's not a good point. With the exception of buisness what doesn't the gov. butt it's nose into? Every single thing is regulated and typically for a reason, why should buisness be the only thing that isn't?

And those pay systems were made internally, not imposed by the government.

Well I was making the case for the National Basketball Association being the government in that example and it being a good economic model to follow. You still have big pay, but it's actually based on performance and ensures that someone can't just buy their way to the top but actually has to compete and earn their placing. A darwinian capitalist system sort of the way it was actually invisioned.

It's also worth pointing out that in baseball, the small market, low payed rosters still win Championships over the New York Yankees and Boston Red Sox of the world.

Is it possible? Sure. But the yanks are favored every year and every year they can just buy out those good players from the poorer teams and sink them. Sure they can rebuild but they could never maintain with the current system. I mean I love seeing the underdog beat out the giant machines that just pay to win and have no real heart, love that, but still you're watching and you just know that little team is gonna be cannibalized next year (Marlin's guy here so I know what I'm talking about).

If every great new buisness was just eaten up by a larger one to prevent competition who do you think loses? The consumers definately on a small scale, the large company loses long term cause they're engineering themselves to consume rather than compete thereby ensuring lax attention to innovation and actual performance, and finally the nation that allows this loses because other nations will use the capitalist system more effectively and eventually they will simply "outclass" any US product because they actually had to compete and be effective to their consumers to succeed and we will have no way of dealing with something like that if we continue unchecked as we are.

 

[StorminNorman]

Most shareholders couldn't if they wanted too, add to that none of the execs are required to show their bosses their contracts so you wouldn't know you're being screwed until that golden parachute is floating away and your buisness is going under. Also since the gov. is now putting up the money as well, OUR MONEY, then yeah I'd like to know it's not being completely wasted. I'm funny like that. Some standards and rules are essential to anything important, I don't see why buisness should be an exception. War even has established rules, and it's war.

War has established rules that are broken all the time. Again, I have no problem with oversight being placed on executive pay, share holders should have access to executive contracts and have some sort of oversight over them. My problem is not the idea, in theory - its the idea that the government is the one involved. I trust them less than I trust the executives.

It is a streach, as is saying having some rules and accountability for the people that can completely tank this ecomony again if nothing is done to fix the situation is the loss of freedom and the beginning of tyranny. I was making the point that it's not a good point. With the exception of buisness what doesn't the gov. butt it's nose into? Every single thing is regulated and typically for a reason, why should buisness be the only thing that isn't?

But see, I want the government to get it's nose out of things - not put it in more.

Well I was making the case for the National Basketball Association being the government in that example and it being a good economic model to follow. You still have big pay, but it's actually based on performance and ensures that someone can't just buy their way to the top but actually has to compete and earn their placing. A darwinian capitalist system sort of the way it was actually invisioned.

And I have no problem with implementing a good economic model - I don't trust the government, especially this government, to come up with one and I don't like the idea of the GOVERNMENT being the one implementing it.

Is it possible? Sure. But the yanks are favored every year and every year they can just buy out those good players from the poorer teams and sink them. Sure they can rebuild but they could never maintain with the current system. I mean I love seeing the underdog beat out the giant machines that just pay to win and have no real heart, love that, but still you're watching and you just know that little team is gonna be cannibalized next year (Marlin's guy here so I know what I'm talking about).

And who favors the Yanks? Sports writers enamored by big names and headlines. Being favored to win is irrelevant, winning is everything. The Yankees haven't won in almost a decade. Small budget teams have.

 

[Handsome Rob]

Wouldn't it be the shareholder's company? They're the ones that own it. But when exes come in and reformulate their own contracts to their own betterment and damaging the company while at the same time insuring the stockholders cannot ask for accountability or even transparency of their own employee, that's just bad on all sorts of levels.

Would you hire someone and allow them to give themselves their own raises, severence packages, perks and then decide not even to let you know what they've decided? What's more you later find out that they have been lying on reports to further enhance their own bonus' straight out of your pocket? If so I really want to work for you.

The true people at the top of the overall operations of a C-Corporation (which publically-traded companies are) are the Boards of Directors. They are the ones who hire and fire the CEOs, CFOs, etc. They are the ones who contract with them for their pay, benefits, etc. If a CEO is allowed to adjust his pay as he sees fit, it's only because the Board of Directors allows that in the contract they make with him.

Want to know who elects the Boards of Directors? The shareholders.

So, if the shareholders are unhappy with CEO pay, then can direct the Board to do something about it, or they can vote the members out at the next shareholder meeting.

CEOs have no more power than they are given, and that power is given to them solely by shareholder-elected Boards of Directors.

 

[SuBe]

The true people at the top of the overall operations of a C-Corporation (which publically-traded companies are) are the Boards of Directors. They are the ones who hire and fire the CEOs, CFOs, etc. They are the ones who contract with them for their pay, benefits, etc. If a CEO is allowed to adjust his pay as he sees fit, it's only because the Board of Directors allows that in the contract they make with him.

Want to know who elects the Boards of Directors? The shareholders.

So, if the shareholders are unhappy with CEO pay, then can direct the Board to do something about it, or they can vote the members out at the next shareholder meeting.

CEOs have no more power than they are given, and that power is given to them solely by shareholder-elected Boards of Directors.

Holy Crap! You mean the system that is in place that has created untold wealth for ALL Americans were not regulated by Government in the PAST? Oh, the humanity! How did we ever get by without our Obama-poo?

 

[moraldeficiency]

The true people at the top of the overall operations of a C-Corporation (which publically-traded companies are) are the Boards of Directors. They are the ones who hire and fire the CEOs, CFOs, etc. They are the ones who contract with them for their pay, benefits, etc. If a CEO is allowed to adjust his pay as he sees fit, it's only because the Board of Directors allows that in the contract they make with him.

Want to know who elects the Boards of Directors? The shareholders.

So, if the shareholders are unhappy with CEO pay, then can direct the Board to do something about it, or they can vote the members out at the next shareholder meeting.

CEOs have no more power than they are given, and that power is given to them solely by shareholder-elected Boards of Directors.

Ever have someone elected to office you didn't like that did a bunch of stuff you hated that you had to deal with? Now imagine if there were no rules or restictions in place once you elected those people.

If they had established rules to follow, hell why don't they have established rules to follow like every other thing in life?

 

[SuBe]

Ever have someone elected to office you didn't like that did a bunch of stuff you hated that you had to deal with? Now imagine if there were no rules or restictions in place once you elected those people.

If they had established rules to follow, hell why don't they have established rules to follow like every other thing in life?

There ARE things you can do about it. As a Shareholder, you can vote them out. And often times, your vote in a Corporation means more than your actual real Political Vote.

 

[moraldeficiency]

War has established rules that are broken all the time. Again, I have no problem with oversight being placed on executive pay, share holders should have access to executive contracts and have some sort of oversight over them. My problem is not the idea, in theory - its the idea that the government is the one involved. I trust them less than I trust the executives.

Yes and that's the difference between war criminals and soldiers. I was a soldier and I'm pretty proud of doing that honorably.

I don't trust the gov much either as you may have guessed, but a few fair practice rules are better than no accountability. I don't really trust NBA refs either and with good cause but take them out of the game and it would go down hill damn quick.

But see, I want the government to get it's nose out of things - not put it in more.

Too late for that. Might as well ask that we stop breathing all this oxygen nonsense. Laws are what make us civil and allow us to advance as nations. Too many and we become strangled, so I get your fear, but without any you're got all the bad elements of the wild west but with no clint eastwood to keep things in check.

And I have no problem with implementing a good economic model - I don't trust the government, especially this government, to come up with one and I don't like the idea of the GOVERNMENT being the one implementing it.

Why not the basis of capitalism as the economic model? A darwinian buisness envirnment where each person has an opportunity to advance by their own merit? Besides gov will be the ones to implement it, they're the only ones that can and since the last administration didn't want to touch it the current one basically has to whether they like it or not. Can't just leave a man bleeding on the street till some else comes along.

And who favors the Yanks? Sports writers enamored by big names and headlines. Being favored to win is irrelevant, winning is everything. The Yankees haven't won in almost a decade. Small budget teams have.

******* New Yorkers favor them. Damn people come down here with their pale white skin and then complain about everything while explaining how everything's better in NY. Well just go the **** back there if you feel that way and get the **** off MY BEACH!!! (sorry, needed to vent for a minute).

If people that know the game favor you to win cause you've got all the best players and have made sure none of the other teams have much other than wildcards, it kinda matters. I agree they haven't pulled that big game, (though the sox's did) but they've been the team to beat for that decade and that's something. Plus it'll never change thanks to the way agents lobby (you may see a comparison with government here as I do) and make sure these "stars" get more than they could possibly deserve (yeah I said it and I'll stand by it), what's more if anyone tries to make the game fair and more exciting they will simply stop playing. So the fans, the game and everyone else involved get shafted cause it's the only way to insure that no one can regulate the teams in the way every other sport in the US does.

Again, and if there's anyone that disagrees with this please speak up, Basketball just has a better system.

 

[moraldeficiency]

There ARE things you can do about it. As a Shareholder, you can vote them out. And often times, your vote in a Corporation means more than your actual real Political Vote.

Once weighed against the board of directors who have special additional votes as the president might as well. Imagine electing politicians and then saying, until you piss off enough people that a small grass roots movement of them builds up enough of an overwhelming majority that dispite you're additional votes we'll vote you out, you can do what ever you want including raising your salaries, giving bonuses you don't deserve and I don't know about, and boxing me out of knowing whats going on in the company I own. Imagine that. Scary as hell.

Look at it in this way, you and a hundred other people have a company. You hire one person to run it and give them authority to do whatever they want, and you can only get rid of them if you convince, say, 70 of the other hundred that this guy or girl sucks, at which time you'll pay them handsomely to not work at the buisness they've crashed on your dime. And you've just got to take it.

 

[chaseter]

So who is going to be the Czar Czar who watches over all the Czars? All hail Obama!

 

[SuBe]

Once weighed against the board of directors who have special additional votes as the president might as well. Imagine electing politicians and then saying, until you piss off enough people that a small grass roots movement of them builds up enough of an overwhelming majority that dispite you're additional votes we'll vote you out, you can do what ever you want including raising your salaries, giving bonuses you don't deserve and I don't know about, and boxing me out of knowing whats going on in the company I own. Imagine that. Scary as hell.

Look at it in this way, you and a hundred other people have a company. You hire one person to run it and give them authority to do whatever they want, and you can only get rid of them if you convince, say, 70 of the other hundred that this guy or girl sucks, at which time you'll pay them handsomely to not work at the buisness they've crashed on your dime. And you've just got to take it.

Isn't that what Democracy is all about? Majority Rule?

 

[moraldeficiency]

Isn't that what Democracy is all about? Majority Rule?

That is a fair a just arguement, I don't really believe in demoracy but more in a republic with set rules in place to ensure equality as best as possible.

 

[Matt]

Pay czar?

 

[Matt]

That is a fair a just arguement, I don't really believe in demoracy but more in a republic with set rules in place to ensure equality as best as possible.

Why should there be equality? Why should a janitor or a factory worker make as much as a Harvard MBA who had to work hard to get where he is? Furthermore, what gives the government the right to step in and tell privately owned companies what they can pay their employees? "We need equality in pay for everyone!" You're confusing equality with entitlement.

 

[moraldeficiency]

Why should there be equality? Why should a janitor or a factory worker make as much as a Harvard MBA who had to work hard to get where he is? Furthermore, what gives the government the right to step in and tell privately owned companies what they can pay their employees? "We need equality in pay for everyone!" You're confusing equality with entitlement.

No, equality isn't equal pay for all things, I'm not a communist, I just believe in rewarding competance and performance.

If you want that giant paycheck and to be the CEO of a company then guess what? You have to accept greater responsibility and accountability not less as the status quo currently is. If that janitor ****s up he gets fired if the CEO tanks a company purposefully just to get that bonus he gets rewarded. That's ****ed.

And as to that "how dare the gov do this" it's called minimum wage and it's been going on for a while. I don't think a reasonable salary cap when they're getting paid with MY ****ING MONEY is unreasonable or undeserved. It's because these **** ups can't be trusted on their own that we're in this mess to begin with. They have no one to blame but themselves and I have zero sympathy and quite a bit of anger.

If these guys were held to any of the standards that janitor is held to every day of his/her life we'd be in a better place right now.