Pioneer Editorials: Pay czar reeling in CEO bucks
Government intervention into the private sector's business operations should be minimal, if at all. Certainly, a number of safety regulations must be prescribed as well as a route for proper and fair compensation such as minimum wage laws and overtime rules.
Shadier ground is how corporate execs should be treated, a matter often best left up to that company's board of directors and shareholders. There has been no doubt that executive pay increases have far outpaced rank-and-file pay hikes almost to the point of being obscene.
The recent fall from high of some of the nation's highest-ranking financial houses caused the U.S. government to step in with billions of bailout dollars under the premise of "too big to fail." In essence, the U.S. taxpayer has now become a shareholder in those companies through the Troubled Asset Relief Program and ought to have a say in its operation.
That's why it makes perfect sense this week that the government, through Treasury-appointed pay czar Kenneth Feinberg to put the brakes on a number of excessive CEO bonuses doled out by boards with public money during a recession.
As soon as today, Feinberg is expected to recommend that high-priced CEOs of government-infused corporations return 90 percent of executive pay, mostly cash bonuses, be given in stock instead, with the caveat they not be cashed in for several years.
The latest action comes after last week's ruling by the government pay czar that outgoing Bank of America Corp. CEO Kenneth Lewis give back $1 million he received so far this year and forgo the rest of his $1.5 million salary for this year. Feinberg thought the CEO's retirement package of benefits and uninvested stock -- currently valued at $69.3 million -- was more than enough.
A number of U.S. companies took taxpayer dollars to brink themselves back from the brink of financial ruin, and now seem content to dish out essentially taxpayer dollars to CEOs as if nothing had happened. The government appears to be targeting American International Group, Bank of America, Citigroup, Chrysler, Chrysler Financial, General Motors and GAMC -- recipients of $326 billion of taxpayer monies.
The American capitalist system rewards those who do well in the marketplace. Somewhere down the road, the system took a wrong turn and began rewarding executives for bad decisions and near bankrupt conditions. It's unfortunate that the government has become the policeman in the marketplace, but as shown by pay czar Feinberg's actions, it is well needed.