Not Just AIG; Not Just Execs
Tuesday, March 31, 2009 at 06:01PM BEYOND AIG: A Bill to let Big Government Set YOUR Salary
in a little-noticed move, the House Financial Services Committee, led by chairman Barney Frank, has approved a measure that would, in some key ways, go beyond the most draconian features of the original AIG bill. The new legislation, the "Pay for Performance Act of 2009," would impose government controls on the pay of all employees -- not just top executives -- of companies that have received a capital investment from the U.S. government. It would, like the tax measure, be retroactive, changing the terms of compensation agreements already in place. And it would give Treasury Secretary Timothy Geithner extraordinary power to determine the pay of thousands of employees of American companies.
The purpose of the legislation is to "prohibit unreasonable and excessive compensation and compensation not based on performance standards," according to the bill's language. That includes regular pay, bonuses -- everything -- paid to employees of companies in whom the government has a capital stake, including those that have received funds through the Troubled Assets Relief Program, or TARP, as well as Fannie Mae and Freddie Mac.
The measure is not limited just to those firms that received the largest sums of money, or just to the top 25 or 50 executives of those companies. It applies to all employees of all companies involved, for as long as the government is invested. And it would not only apply going forward, but also retroactively to existing contracts and pay arrangements of institutions that have already received funds.
In addition, the bill gives Geithner the authority to decide what pay is "unreasonable" or "excessive." And it directs the Treasury Department to come up with a method to evaluate "the performance of the individual executive or employee to whom the payment relates."
This would include banks, I would presume. Many of the banks did NOT want to take TARP funds and were forced to do so. Would this extend to the states who have taken bail out money from the federal government? How far will this go? Where will it end?
Contracts mean nothing in America. Nothing. If contracts are not enforced or enforcable or can be altered by our government in 'response' to a well planned and well executed public outrage and its apparently insatiable desire for power and control, then we lose more than our contracts. We lose the rule of law.
First it's AIG bonuses, now it's GM's CEO. What (or who) is next?
Reader Comments (3)
That's exactly what I thought as I read your post---"What in the world are they going to do next?" It's shocking.
Good post, Kim. The answer to your question "what next" is whatever the government decides is next - as long as people are willing to abdicate their responsibilities as citizens to the government, the government will take them and never give them back. Chilling.
It's all horrifying! T. Geithner, the man not able to keep his own house in order, determining the income of others? Has the D.C. water turned everyone's minds into jello?