http://www.cnn.com/2007/POLITICS/01/31/ ... index.html

Bush takes aim at CEO pay

Bush says CEO salaries should be tied closely to performance
• President expected to play up optimistic economic trends
• Bush to call for changes in financial reporting laws
• Democrats say Bush is painting a misleadingly rosy picture


NEW YORK (AP) -- President Bush took aim Wednesday at huge salaries and bonuses for corporate executives, going to Wall Street to say compensation packages should hinge on how good a job a CEO does for the shareholders.

Bush came to New York to highlight optimistic news about the economy and to bring his economic message out of the shadows of the Iraq war. Shortly before he spoke, the government reported the economy grew at a faster-than-expected 3.5 percent pace in the final quarter of last year.

The president also was acknowledging the anger of Americans at stories about the enormous salaries and other perks for CEOs. (Watch a Morgan Stanley analyst predict more economic power for labor in 2007)

"Government should not decide compensation for America's corporate executives," the White House said in a report ahead of Bush's speech. "But the salaries and bonuses of CEOs should be based on their success at improving their companies and building value for their shareholders."

The White House statement appeared aimed in part at legislation that Rep. Barney Frank, D-Massachusetts, chairman of the House Financial Services Committee, has said he will push, requiring shareholder approval of executive compensation plans.

Pay for corporate chief draws ire
Huge salaries and other perks for CEO have drawn ire from investors and made splashy headlines. Home Depot chief executive Bob Nardelli was earning an average of $25.7 million a year -- excluding stock options -- before he was forced out in a furor over his hefty pay. He left with a severance package worth about $210 million.

In 2001, General Electric Co. paid chief executive Jack Welch $16.25 million. Welch was replaced that year with Jeffrey Immelt, who earned $3.4 million in total annual compensation in 2005.

The New York Stock Exchange faced an uproar over former CEO Richard Grasso's $187.5 million severance package. Former New York Attorney General Eliot Spitzer, now governor, sued members of the NYSE board over the package given to Grasso when he quit as chairman in 2003.

Investors are getting access to clearer and more detailed information from public companies on their top executives' pay packages and perks under new federal rules that took effect in December.

The rules were designed to enhance corporate accountability and address an issue that has angered company shareholders and the public: lavish compensation for executives, unrelated to their performance, even as companies stumble, lay off employees or renege on billions of dollars in pension obligations for workers' retirement. The chasm between executives' salaries and the pay of rank-and-file employees continues to widen.

For a symbolic sign of the resilience of the economy, the president chose to speak at the venerable Federal Hall on Wall Street. In the original building on this site, American government took root -- George Washington took his oath of office there, and the Congress and Supreme Court made their home there. The current hall, which dates to 1842, is now a museum that helped provide emergency shelter when terrorists destroyed the World Trade Center, just a few blocks away.

In his remarks, Bush called for changes in enforcement of the Sarbanes-Oxley Act, which was passed in response to a wave of corporate accounting scandals. The administration is heeding concerns from companies that the law, which tightens controls on financial reporting, has gone too far and is imposing unreasonable costs.

Democrats: Economy leaving behind the middle class
On the issue of how well the economy is doing, Democrats argue that Bush gives a misleadingly rosy picture of things.

"President Bush can deliver all the economic pep talks he wants, but the fact remains that his failed leadership has led to the worst job recovery on record, stagnating household incomes, a rise in poverty and record deficits," said Stacie Paxton, spokeswoman for the Democratic National Committee. <--statistically, everything is false except poverty

The public's optimism about the economy has grown since the end of the year, reflected in rising approval of Bush's handling of that economy -- now at 43 percent in AP-Ipsos polling. Optimism about the economy was as high as it's been in the last year -- a reflection of lower gas prices, rising wages, strong jobs reports and steady interest rates.

Since Bush took office in 2001, the country has seen one in five manufacturing jobs disappear, a total of 2.96 million lost jobs. The U.S. trade deficit is expected to climb to a fifth consecutive record when final 2006 figures are totaled next month.

increasing shareholder value, huh? you know that generally translates into job cuts, right?

I don't argue that CEOs (and usually all of upper management) get overpaid for the jobs they do, but the idea of Bush preaching that salary should be tied to job performance in terms of what they do for the shareholders... I hope he starts returning all that money and power he's had access to over the last 6 years or so since I'm one of his shareholders and he's made the value of my personal stock in this country worth poop.

Anyway, it's just more pandering to corporate america in my opinion. surprise, surprise.

its not fair that i have to pay 28% federal taxes. there, i said it

6 figures, babe.

send me some more insider information on a company called Powercast LLC, babe

i just read this and was thinking about what bush's salary would be if we went on his performance in office. hmmm

So....how exactly does Bush plan to enforce this?

Here's an idea--if the CEOs are getting paid more than they're worth, then stop paying them more than they're worth. There's all this talk about how the shareholders are getting screwed, but they're the ones who (indirectly) hired the guy. Bush said that "compensation packages should hinge on how good a job a CEO does for the shareholders"... If the shareholders want that, then they should just make their compensation packages hinge on how good a job the CEO does for them.

And each time I hear people complain about the "trade deficit" I cringe. Who cares? So we're buying more than we're selling. Great! We're getting stuff in exchange for money! Other nations are giving us actual useful stuff in exchange for imaginary pieces of paper!

I have no trouble with CEOs getting paid hundreds of millions. If there's a problem with it, the market will sort it out.

Exactly. The only reason they get that much is because those who make the decision feel it is in their own best interest for them to get that much. If they're wrong, it is implied that the decision was not in their own best interest, and they are hurting themselves.

Although I would imagine that job cuts may help the stock value if a company is doing poorly to begin with, I was unaware that it was a general requirement for increasing stock value. Please inform me if this is truly the case. Anyhoo, I'm curious as to why you are a stock holder if you feel that any benefit you recieve will be at the expense of someone else. I imagine you are a proponent of a "zero-sum game" outlook on the economy, is this correct?

He doesn't. He's just playing politics- saying it to make himself look good without taking a hit or having to actually do anything.

He's making himself look bad. If the Republicans don't support economic liberalism, they're nothing more than a fascist party.

Would y'all agree with my assertion that what we have are two dueling populist parties which both lack any solid platform or values but rather pander to competing social groups?

no, neither party is populist at all. it's almost impossible for them to be.

So their indecisiveness is unrelated to populism? I would think that it would be easy for the opposition party to have an inflexible belief system, but even before they retook congress the Dems didn't have a terribly cohesive platform. What I'm looking for is a 1990's era Republican party - something with, ya know, an enactable platform.

America's party system just isn't like that. They can't be populist because they're so entrenched they basically are the system. The parties certainly have populists within them, but the parties cannot be populist unless they almost completely invert the way they go about things.

Party platforms are pretty meaningless here, always have been and hopefully always will be. We're not Britain.

Democrats like to play populist sometimes, just like conseratives ala Fox like to claim that the Democrats are the real elites.