White House seeks to ease final rules on bank pay limits
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Aides to President Obama suggested today that he wants to soften the curbs on bank pay that Sen. Chris Dodd inserted into the fiscal stimulus bill that Congress approved on Friday.
From the Associated Press:
Facing a stricter approach to limiting executive bonuses than it had favored, the Obama administration wants to revise that part of the stimulus package even after it becomes law, White House officials said Sunday.
WhilePresident Barack Obama plans to sign the $787-billion stimulus bill in Denver on Tuesday, his administration will seek changes in the government’s approach to executive compensation, senior Obama advisor David Axelrod said. ‘We all have the same goal. We all have the same sentiment. And we want to do something that’s workable, and we’ll work with them to get to that point,’ Axelrod said on ‘Fox News Sunday.’ Obama press secretary Robert Gibbs, appearing on CBS’s ‘Face the Nation,’ also said the administration would seek to ‘strike the right balance’ on the compensation question by discussing changes in the provisions with House and Senate members. Asked if Obama would enforce the bill and was satisfied with it, Gibbs replied, ‘We will sign this bill into law on Tuesday.’
Dodd’s provision stunned the financial-services industry because the Connecticut Democrat made pay restrictions retroactive for banks that have already received government capital. Obama favored curbs only on lenders getting new aid.
But the industry’s biggest beef is with the bonus limits that Dodd set. If Obama signs the bill as it’s now written, annual bonuses for the highest-paid bank and brokerage executives would be limited to a maximum of one-third of their total compensation, and must be paid in company stock that could be cashed in only after the bank has repaid government capital.
Wall Street fears that will drive some talent, such as top traders who count on huge bonus payouts each year, out of banks and brokerages and into hedge funds or other financial firms that haven’t gotten government aid.
But Rep. Barney Frank (D-Mass.) and Sen. Richard Shelby (R-Ala.) both said today the pay rules should be enforced as is.
From the AP:
‘Mr. Gibbs may not like it, but it is going to be enforced,’ Rep. Barney Frank, chairman of the House Financial Services Committee, said on CBS. ‘This is not an option. This is not, frankly, the Bush administration, where they’re going to issue a signing statement and refuse to enforce it. They will enforce it.’ Sen. Richard Shelby, the ranking Republican on the Senate Banking, Housing and Urban Affairs Committee, said the compensation provisions were necessary to protect taxpayer money. Of Gibbs’ comments about the provisions and their enforcement, he told CBS, ‘It seemed to me that he was waffling a little bit.’
-- Tom Petruno