Supreme Court To Hear Case On Executive Pay

New York Times:

Last summer, Richard A. Posner, a federal appeals court judge, issued a surprising and prescient dissent. Executive pay is out of control, he said, and the marketplace cannot be trusted to rein it in.

The Supreme Court will hear the case, Jones v. Harris Associates, this fall, as anger over huge bonuses paid to the executives of failing firms continues to grow.

Read the whole story: New York Times

Comments

[bankownedbyamerica]

10:41 AM on 08/18/2009

The most pressing issue is why we, the American people, were fooled into thinking Obama would create more jobs.
hat tip to http://www.iamned.com .....

[Patrick Garies]

07:01 PM on 08/18/2009

And this comment has what relationship to the article?

[gettingitright]

10:18 PM on 08/17/2009

This should be a no-brainer. If tax money is pumped into any company, especially a faltering one, the government should absolutely have the right to set limits on salary and bonuses. If no tax monies are involved, then the free market forces should prevail although someone should have the moral and ethical fortitude to eliminate the gross, egregious pay disparities between CEOs and rank and file. CEOs are not hundreds and thousands times more valuable or important than ordinary workers. This is a vile culture that needs to be curtailed immediately. T
The bonuses alone could be the operating budget for many of these companies that are downsizing, laying off and closing shop.

[politicaljunkie41910]

02:07 PM on 08/17/2009

Judge Richard Poster, a conservative, appointed in 1981 which would have been by Reagan, appears to be an ACTIVIST judge. He appears to have been a manchurian candidate, Sen Jeff Sessions worst nightmare.

[Patrick Garies]

07:09 PM on 08/18/2009

I think you mean Richard /Posner/.

It doesn't seem very "conservative" of someone to say that executive pay is out of control though considering frequent opposition to pay caps or any other restrictions on "the free market" by self-labeled conservatives.

Unfortunately, it's a little hard to judge Posner's stance since the article doesn't seem to go in-depth as to the legal reasoning behind his dissent; it seems that at least four Supreme Court justices think that the majority's view might be incorrect since they took the case though.

[KennyT]

01:07 PM on 08/17/2009

I'm not sure how far this can go. I wish Congress had the courage to change the tax rate.

[nomadicexpat]

05:16 AM on 08/18/2009

penalizing success is not the answer

[Patrick Garies]

07:03 PM on 08/18/2009

Nor is allowing greed to go unchecked.

[Elbrando]

01:05 PM on 08/17/2009

Alito, Roberts, Thomas and Scalia are all corporate stooges. The only hope is that the rest will consider the sky-rocketing corporate compensations as the threat to America they really are.

[Chris]

01:55 PM on 08/17/2009

IF they are "corporate stooges" then wthey woudl want to restrict salaries. I am pretty sure the corpoartion would be better off not paying 1/2 billion to its CEO.

[nowThenzen]

07:57 PM on 08/17/2009

ugh ... the 'corporation' is not a sentient entity; ppl 'own' corporations.

[DFutureIsNow]

12:59 PM on 08/17/2009

This might hurt conservatives, that is if the court were to side with corporations, and Sotomayor will most probably vote against the corporations, republicans could loose BIG on this when their conservative "darlings" favor their corporate masters.

[BBackSoon]

12:55 PM on 08/17/2009

When I look at my Crystal Ball, I see a 5-4 decision in favor of unrestrained Executive Pay. Roberts will write the Majority decision.

[Chris]

01:08 PM on 08/17/2009

Where is compensation adressed in the Constitution? Federal Law?

[guajiro]

01:48 PM on 08/17/2009

It's right there, right after the 2nd amendment, you probably haven't gotten past the 2nd, but it's in the 14th amendment: Equal protection under the law to all people, not just corporate people.

[Tom Joad]

07:12 PM on 08/17/2009

...according to the Constitution, the federal government has power to punish pirates...

[nomadicexpat]

05:17 AM on 08/18/2009

it should be 9-0 in favor of freedom

[DSOTM]

12:54 PM on 08/17/2009

If Sotomayor tows the liberal line, the decision will be 5-4 in favor of no intervention in executive pay.

[quantumspin]

12:53 PM on 08/17/2009

God forbid that the Supreme Court would side with ordinary working Americans on anything. What we have here folks is corporate control of our government.

[Roland Adams]

02:35 PM on 08/17/2009

Executives making millions in bonuses are NOT ordinary Americans, and stop pretending they are! Those make less than 100k a year or ordinary.

[Patrick Garies]

07:14 PM on 08/18/2009

Umm... I think the OP was trying to make just that point.

[Chris]

12:35 PM on 08/17/2009

So what aprt of the US Constitution and/or federal law is being violated?

[Durango]

12:47 PM on 08/17/2009

Read the article.

it is a shareholders action.

Actually shareholders of a Mutual Fund.

Equal protection.

[Chris]

01:06 PM on 08/17/2009

Thought woudl be equal proteciton agaisnt the fees acessed. What again does that have to do with executive compensation?

[bannorhill]

03:26 PM on 08/17/2009

Share holders vote on the board of directors at shareholder's meetings. While some may think they are excessive the shareholders did authorize the board to set pay and bonuses.

I do not want to have a government who has the power to review and adjust my pay as they see fit.

[Hank10303]

12:32 PM on 08/17/2009

Well it looks like some logical and clear minded republicans that truly believe in the market place as well as being conservative understand that the market will not police itself and will rob the American public blind at every turn if allowed. To often when left to our own devises, human beings get greedy. Too much of anything is no good; so it stands to reason that to much deregulation is absolutely no good.

[Durango]

12:50 PM on 08/17/2009

Free Market Theory only works . . . in theory.

In the real world there are all kinds of restraints that the theory doesn't account for. And example is Alan Greenspan did not realize they need to take into account greed. And stupity.

An, of course, corruption.

Work that into the Free Market Theory and get back to us.

[Chris]

01:09 PM on 08/17/2009

How can you make that claim when free markets do not exist in the US.

[Chris]

12:26 PM on 08/17/2009

What current laws are being broken? If there are no laws dictacting pay then how would you expect the court to rule?

[DosGatos2]

04:31 PM on 08/17/2009

Under the current statutes governing mutual funds, mutual funds have a FIDUCIARY duty to their investors. Fiduciary duty has a specific legal meaning which sets a particular standard of care that one party must show toward another.

Here, having a fiduciary duty means a fund manager cannot just keep re-hiring the same investment managers year after year and pay them exorbitant fees for lousy performance when fund managers have an obligation to do the best they can by you.

Failing to meet a fiduciary standard is the basis of the lawsuit.

[madashellvoter]

12:25 PM on 08/17/2009

the Supremes will hear the case, but DO NOTHING! You have to understand the five that will vote againest it are ALL PRO BUSINESS which is fine, but not against the logic of over paying the top excutives 10 tens your highest payed employee. That's just not good busness.

[Aikaterina]

12:23 PM on 08/17/2009

I expect the same to be done with executive pay as has been done thus far with health care reform, re-regulating financial institutions, or a serious energy policy...NOTHING.

Special interests have bought our senators and representatives, the cabinet, White House, and now rule this nation. It's an economic coup d'etat that began nearly 40 years ago (when Reagan took office), and is now well-entrenched into our political, economic and foreign policies. There's no doubt they'll win in the courts as well, since our judicial system is so politicized, and no longer independent.

We bailed out un-regulated S&L's in the 80's, got into Iraq for oil, profit, and to placate the Israeli lobbies in this country, while our treasury, sons and daughters bled for naught. We have not yet enacted an energy policy that promotes conservation, sustainable, renewable, clean energy, while adversely impacting families and businesses with higher costs for less reliable energy. We bailed-out corrupt financial institutions pre-condition, oversight, scrutiny or accountability, and those culprits are rewarding themselves with lavish, unearned rewards at our expense. Now, we're placating the insurers by not insisting on a strong public option in health care reform, and we'll soon see 1/3 of our money spent on spiraling health care costs that neither government, businesses or individuals can afford.

The only solution is strict term limits (8 years), and public financing of all campaigns (to level the playing field and get corporate sponsors out of the game).

[northstar11]

12:22 PM on 08/17/2009

5-4------executive pay is expression of free speech---constitutionally guaranteed

[DiogenesOfAlaska]

12:30 PM on 08/17/2009

I doubt it.

[Durango]

12:51 PM on 08/17/2009

Pay is speech?

While I wouldn't doubt the outcome of 5-4 your reasoning is ridiculous.