Executive compensation bill passed in House

The legislation and restrictions on executive pay come in the wake
of a huge public furor over bonuses doled out to the executives of Wall
Street firms that survived the recessionary climate primarily because
of bailout

funds.

The House voted 237-185 in favor of slapping restrictions on how
such executives are paid. The Corporate and Financial Institution
Compensation Fairness bill now awaits the Senate’s approval.

The pros and the critics

The vote comes a day after the New York state attorney general revealed that top employees

of nine banks, which survived on taxpayers bailout money, were given huge bonuses.

"If the last year has taught us anything, it's that the compensation
practices of some of our largest corporations have gotten completely
out of control," Rep. James P. McGovern (D., Mass.) said after the vote.

Treasury Secretary Timothy Geithner too hailed the measure as a
"positive step" and said refurbishing executive-compensation practices
was an indispensable part of the Obama administration's legislative
schedule.

Rep. Peter J. Roskam (R., Ill.), however, had a different opinion.
He said, “This bill is an invitation for political meddling at its
worst in the private confines of companies that are trying to work hard
to create jobs."

Rep. Barney Frank (D., Mass.), chairman of the House Financial
Services Committee and chief author of the bill took a neutral stand.

Frank said, “What this bill explicitly aims at is this practice
where people are given bonuses if the gamble pays off, but don't lose
anything if it doesn't.” He said that if a bet goes wrong, "the company
loses money and the economy may suffer, but the decision-makers do
not".

Meanwhile the U.S. Chamber of Commerce and Business Roundtable along
with the National Association of Manufacturers opposed the legislation.

In a statement, the organizations said it would be "excessively
burdensome and disruptive to companies at a time when they are facing
significant economic challenges".

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