Obama Calls for Checks on Executive Pay

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JIM KUHNHENN | April 11, 2008 09:16 AM EST | AP

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INDIANAPOLIS — Democratic presidential candidate Barack Obama is demanding that company shareholders have a say in how much executives get paid as he pushes his populist message.

Obama, in remarks he planned to make to reporters Friday morning, wants Congress to pass legislation he has sponsored that would require corporations to have a nonbinding vote by shareholders on executive compensation packages.

Under Obama's legislation, shareholders could not veto a compensation package offered to an executive and would not place limits on pay. Rather, they would have a means to publicly express their position.

A similar bill passed the House last year.

The Illinois senator's comments come as he embarks on the third day of a four day-swing through Indiana, which holds its primary May 6. Obama and Sen. Hillary Rodham Clinton are running even in the state and have both been making economic pitches to voters.

"This isn't just about expressing outrage," Obama says in prepared remarks. "It's about changing a system where bad behavior is rewarded so that we can hold CEOs accountable, and make sure they're acting in a way that's good for their company, good for our economy, and good for America, not just good for themselves."

Income inequality is a hot button issue with audiences, particularly the blue collar workers that Obama is trying to peel away from Clinton in the more economically distressed regions of Indiana and Pennsylvania, which holds its primary April 22.

The high cost of chief executive pay has drawn criticism in recent years as salaries rose, stock options paid off like lottery jackpots, and perks like chauffeured cars and private jets spread.

USA Today reported this week that the median compensation for chief executives at the 50 largest companies in the United States was $15.7 million last year, even though some of the companies were not performing well.

Investor advocates, union pension funds and shareholder groups have supported the legislation. Republican critics worry it would give activist investors an inroad to change a company's policies.

Even President Bush last year questioned the extravagant pay of some company managers and directors, but said it was not a matter for government involvement.

 
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Why does Tweedledink even bother to be specific on issues he knows nothing about? Just sounds like a dufas. Dufai?

    Favorite    Flag as abusive Posted 01:35 AM on 04/12/2008

Obama I love your idea in theory, but it's not thought out. I hate to say,it but that's kinda how I feel about you in general. You big pictures ideas are great, but you appear to have little grasp of the granularity of implementing them.

When a CEO behaves badly (er, I think you mean the company isn't doing so well, yet they pay the CEOs high dollar amounts) the investors can exericise their right to sell and get out. The market regulates itself on this one. Besides, shareholders expressing their disastisfaction with executive compenstation will spur bad press, which will initiate sell-offs, which will ultimately hurt investors.

A more realistic option is to stick to situations only where a company goes bankrupt and shareholders lose their shirts. In that instance where it makes sense to regulate the dispersement of assets so the CEOs go down with the company---but that's as far as this should go.

Regardless, Obama is trying to say to PA voters, "I get that you don't like the income disparity, so I am going to give you a forum to say so." I am not sure this is a responsible or realistic solution.

    Favorite    Flag as abusive Posted 06:51 PM on 04/11/2008

You clearly don't understand how the system works, cowbells.

    Favorite    Flag as abusive Posted 10:01 AM on 04/12/2008

What is truly remarkable is there should be any controversy about the owners of a business having a say in the pay of their employees.

    Favorite    Flag as abusive Posted 05:33 PM on 04/11/2008

Obama? Here's a shareholder who's calling for checks on executive pay!

    Favorite    Flag as abusive Posted 04:40 PM on 04/11/2008
- Teri I'm a Fan of Teri permalink

monster is talking about crime today and obama is talking about education and parents being responsible, hmmm.... i will take the responsible parent /education every time so that we don't have to get to the crime later down the road. just think if her husband had done what obama suggests, 20 years ago, than many of these criminals wouldn't be on the street. didn't hillary learn anything from marian wright edelman, her first boss? well, of course not they are no longer friends and why is that? because monster will do anything to win and would turn her back on her own mother or daughter if it meant a victory.

    Favorite    Flag as abusive Posted 04:20 PM on 04/11/2008
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Excellent idea, but watch the corporate blowback. Bill will jump on this.

    Favorite    Flag as abusive Posted 03:55 PM on 04/11/2008

OK conservatives, why SHOULDN'T CEO's be accountable to the shareholders who are the real owners of companies?

If a progressive CEO made bad decisions and bankrupted his company, does he get to skip away with a zillion dollar bonus?

    Favorite    Flag as abusive Posted 03:54 PM on 04/11/2008

"Under Obama's legislation, shareholders could not veto a compensation package offered to an executive and would not place limits on pay. Rather, they would have a means to publicly express their position."

"This isn't just about expressing outrage," Obama says in prepared remarks. "It's about changing a system where bad behavior is rewarded so that we can hold CEOs accountable, and make sure they're acting in a way that's good for their company, good for our economy, and good for America, not just good for themselves."

It appears that this particular strategy is DOA. Shareholders would not have an opportunity to veto a compensation package...but they can "publicly express their position." In a nation where "publicly" expressed positions are completely ignored and disregarded, the rewards of "bad behavior" will continue on as the status quo. There isn't even a "go sit in the naughty chair" element to this "solution."

    Favorite    Flag as abusive Posted 03:39 PM on 04/11/2008

It's a start. At least something like this could actually get passed.

    Favorite    Flag as abusive Posted 06:49 PM on 04/11/2008
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Whenever a candidate starts talking "crime" I think "pander time."

Edwards is 100% right on this one. Tackle poverty—crime will then be much less of a problem.

    Favorite    Flag as abusive Posted 03:30 PM on 04/11/2008

Dreamer!.....It won't stop white collar crime. Howsabout, adding the death penalty to it? That ought to do it. (Well, it would make me happy, at least.)

    Favorite    Flag as abusive Posted 05:09 PM on 04/11/2008

Boy watch the good old boys supporting Hillary and McCain really go nuts. This is not good news for
the vested interests of the world. This is what real change is all about. Let's see how Clinton spins this?
One thing we can be sure of and that is whatever Obama does it's not going to be traditional and that's exactly what this country needs.

    Favorite    Flag as abusive Posted 02:37 PM on 04/11/2008

Imagine that people who own part of a company actually having a say in how much the CEO is paid. I'm sure conservatives would Love this.

Carol

    Favorite    Flag as abusive Posted 02:24 PM on 04/11/2008

Why no mention of the Philly Payola story on HuffPo? Explains Clinton's confidence in PA, and why she is holding on to her money instead of paying her bills. True supporters of democracy should not have to buy votes.

    Favorite    Flag as abusive Posted 02:03 PM on 04/11/2008

Maybe because the story is about Obama's public statements on CEO salaries.

    Favorite    Flag as abusive Posted 02:20 PM on 04/11/2008
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Right now more boards decide on executive pay packages, not the actual shareholders. And it doesn't make sense to have companies going bankrupt and taking million or even billions of shareholder dollars down into the dumps, but the guys who made the decisions still walk about with multi-million pay-outs. I think this is a great proposal from Obama, we need to change this system, to bridge the gap between Main Street and Wall Street.

    Favorite    Flag as abusive Posted 01:12 PM on 04/11/2008
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the964kid,... you are wrong - it makes complete sense,... at least to the boards.

Many boards of directors have subsets of the same fat-cats sitting on them from company to company with just some rotation as to which one of the inbred elitist putzes is the CEO / President. If one of those fat-cats votes for a cushy compensation package for his board's CEO, then he/she can rest assured that when the time comes for them to get offered a compensation package that they are owed one.

Its just a high-priced game of 'You scratch my back now and I'll scratch yours later". Until the shareholders go in with blunt weapons or with enough organization, they will just keep right on doing it. I suspect that it will take more than one term for Obama or anybody to fix this little wagon - and how many members of Congress are in these guy's pockets?

    Favorite    Flag as abusive Posted 03:01 PM on 04/11/2008

My problem with this is not the message, but rather the lengths Obama is going to. A non-binding resolution? WTF? I am tired of this nonbinding resolution crap coming out of Washington. Why pass legislation to let our feelings be felt, but not to actually do anything? Make the legislation binding! Corporate greed is killing this country, with the express consent of the current administration. What we need is to examine what a corporation is and find out why corporations have so much power. We cut taxes on corporations and the thiefs running them while keeping the tax burden on the people working and buying from the corporation. Shouldn't a corporation have a responsibility to the workers and the consumers rather than the executives and board members? Whose faulty is it truly? The people not questioning. Should the government get involved? Absolutely.

    Favorite    Flag as abusive Posted 12:40 PM on 04/11/2008

This will come as unwelcome news to all of Barry's Wall street fat cats. How funny that HuffPo isn't sharing the story in the WP about the givers that Barry really cares about. Seems HuffPo is not even bothering with a facade of equal treatment anymore.

    Favorite    Flag as abusive Posted 12:39 PM on 04/11/2008

That's not the issue. What is he talking about? Shareholders have a vote. Executive pay must be spelled out in clear English now in prosectuses. (At one sad point in my life, I wrote that stuff....*haha)

So what is he blowing smoke about?

    Favorite    Flag as abusive Posted 12:43 PM on 04/11/2008

Shareholders do not have a vote on executive or board compensation. And, really, I think if you used to write "prosectuses", you'd know how to spell the word.

    Favorite    Flag as abusive Posted 01:19 PM on 04/11/2008

What Wall Street fat cats? I think you mean Hillary Clinton's

    Favorite    Flag as abusive Posted 12:54 PM on 04/11/2008
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