Wednesday, April 15, 2009
Administration Seeks Increase in Oversight is an interesting NY Times article from March 22, 2009. It is about the fact that the Obama Adminstration is seeking additional oversight with respect to Executive Pay at financial institutions. The article is abit vague about what exactly the Administration is interested in. As the article states:
The administration has been considering increased oversight of executive pay for some time, but the issue was heightened in recent days as public fury over bonuses spilled into the regulatory effort.
The officials said that the administration was still debating the details of its plan, including how broadly it should be applied and how far it could go beyond simple reporting requirements. Depending on the outcome of the discussions, the administration could seek to put the changes into effect through regulations rather than through legislation.
One proposal could impose greater requirements on company boards to tie executive compensation more closely to corporate performance and to take other steps to ensure that compensation was aligned with the financial interest of the company.
I am afraid that this might be an overreachtion to the AIG bonus mess. Freedom of contract is an essential part of labor and employment law-indeed most of law. The government does not need to get involved in any perhaps the most extreme situations as when it is giving a company bailout money. Lets not overreact.
Mitchell H. Rubinstein