The White House plans to put under strict scrutiny all the banks and corporations that have received two rounds of federal bailouts. According to a NYT report, the administration will require all the recipients of two taxpayer infusions to submit any major executive pay changes for approval by a new federal official who will monitor compensations.
From The NYT: The proposal is part of a broad set of regulations on executive compensation expected to be announced by the administration as early as this week. Some of the rules are required by legislation enacted in the wake of the worst financial crisis since the Great Depression, and they would apply only to companies that received taxpayer money.
Others, which are being described as broad principles, would set standards that the government would like the entire financial industry to observe as banks and other companies compensate their highest-paid executives, though it is not clear how stringent regulators will make them.
The issue of executive pay remains a delicate subject for the White House and Congress, particularly since it was revealed that international insurer AIG, the recipient of more than $180 bln in taxpayer money, was handing out $165 million in bonuses to employees at the company unit responsible for driving the company to the edge of insolvency.