Rep. Barney Frank says excessive compensation packages for top corporate executives played a key role in the country's financial crisis, and he wants to reign in that pay.
"I believe that the structure of compensation has been flawed," the Massachusetts Democrat said while chairing a House Financial Services Committee hearing on Thursday.
Frank wants to develop guidelines for compensation practices, and not just for companies receiving government bailout dollars. Frank argues the problems is much wider.
"We have had a system of compensation for top decision makers in which they are very well rewarded if they take a risk that pays off, but suffer no penalty if they take a risk that costs the company money," he said.
What has happened that our government thinks they have to the power to regulate the pay at ANY private company; let alone one that has taken no public funds what-so-ever? Where is this power granted to them in the Constitution? How does it even make sense that something like this is talked about? This is America. It used to be anyway......
Barney Franks' complete and total ignorance of how the real world works is staggering.
First off, to suggest that those executives who make the huge bonuses, plus compensation, pay no penalty for poor performance is ridiculous. When individuals have risen to that level in the working stiff food chain the penalty for poor performance is BEING FIRED, you tool. The companies that made all the money and decided to spend it on a big time executive BECAUSE IT WAS THEIRS TO SPEND, will fire that guy (or gal) if they can't make the grade. It happens EVERYDAY in America.
Second, taking the stand that somehow large pay and bonus structures lead to the financial ruin of some of the largest companies in the world is a complete and total fabrication. I don't know one single person that was paid $787 billion dollars. The cause of the financial crisis was the government regulating and strong-arming private business into oblivion. The cause of the financial crisis was the greedy and sneaky getting greedier and sneakier, and then.......the government BAILED THEM OUT. I am here to tell you the cause of the the financial crisis HAD NOTHING TO DO WITH HOW MUCH THE TOP EXECUTIVES WERE PAID.
....the administration does not want to impose caps on executive pay, but compensation must be better managed to prevent the sort of risk-taking that jeopardizes the economy.
Sperling laid out a list of guidelines calling on publicly-held companies to link compensation to long-term performance, not short-term gains.
The administration believes compensation practices "must be better aligned with long-term value and prudent risk management at all firms, and not just for the financial services industry," he said.
How is it possible we have gotten to a place in America where it is ok for the government to determine what is or is not appropriate for a company to pay? How can the government even begin to understand the nature of all business and then dictate what value an executive brings to said company? If I want to pay my top executives $1,000,000,000 per year to keep their hair dyed purple, that is my RIGHT as the OWNER of the company. If investors in my company determine this to be a foolish practice and they don't like it, they have the right to pull their money out and go elsewhere. I then have the right to go bankrupt and fail or find my own financing to keep it going. This administration has no business telling anyone how to "better align" their compensation packages.
Finally, does the irony of the worst ever run "business" bullying people who actually know what they're doing, occur to anyone but me? These people are out of control. Their power grabs and intrusions into our lives are no longer on a hidden agenda, but right out in the open for all the world to see. I just hope others will see it before it's too late. it would seem we are no longer fools in waiting, but just fools.