Why is it when we make an investment in a company's stock, the government doesn't care the CEO makes $10+ million dollars in annual compensation - they call it laizze-faire, yet when the government makes an investment in these same companies from their bailout reserves, they insist the CEO pay is reduced!
It takes 100,000 investors buying 100 shares each per year to pay a CEO's salary for each $ of stock sold to raise $10 million. That's like taking the members of Mariners Church multiplied by 10 investing 100 shares in a company just to pay the CEO's salary for one year.
Who will be in charge of setting CEO pay? None other than Treasury Secretary Henry Paulson who made $16 million per year (Source: Forbes) as CEO of Goldman Sachs - the investment bank who made a fortune selling short mortgage-backed securities which led to the collapse of the MBS market which has spread into collapsing the U.S. financial system. Yes, the wolf is guarding the hen house! The CEO who presided over the destruction of the U.S. financial system is the one in charge of repairing it! But I've written a lot about that already...
We don't need more laws from Congress - we need enforcement by the executive branch for the laws we already have.
It's similar to the issue of securing the U.S. border, we don't need more legislation... we need the Bush admin (i.e. Securities and Exchange Commission) to enforce the laws we already have on the books.
SEC Chairman, Republican Chris Cox (Newport Beach) advocated just 6 months ago the SEC be dissolved and yet their mission is to create stable and secure markets and to protect the rights of ordinary investors against wall street excesses. This shows how negligent those laizze-faire types at the highest levels of the Bush admin are. They have no clue how to govern this nation!
The SEC allows staggered boards (so only a potion of an entrenched board can be removed at a time), cumulative voting (where institutional investors can allocate all their voting shares towards one of their hand-picked board members guaranteeing their approval), closed-door compensation committees (without any visibility into the process or accountability to shareholders), etc.
The SEC has the power to stop this!
In addition, the SEC has the power through executive order to force publicly traded companies to open CEO compensation to shareholder approval. Instead, SEC Chairman, Republican Chris Cox keeps reiterating his laizze-faire rhetoric while his party accepts large CEO campaign contributions... with big smiles and cheers the Republicans and CEOs yell: "4 more years! 4 more years!"
This has to stop! They advocate laizze-faire free market capitalism and yet there are plenty of market mechanisms like the one mentioned above that help manage CEO pay and the SEC doesn't establish any of them! Why? It's called: "4 more years! 4 more years!" the Republicans want to get their candidates elected and CEOs are powerful and make large contributions to the Republican party.