Geithner: No caps on pay for corporate executives
WASHINGTON – Treasury Secretary Timothy Geithner says the Obama administration doesn’t want to place caps on executives’ pay – even though it believes excessive compensation led to risk-taking that contributed to the financial crisis.
Geithner said the administration will seek legislation that will permit shareholders to vote on executive pay packages, but the results would not be binding on boards of directors. The administration will still restrict compensation at companies that are receiving taxpayer assistance through its $700 billion financial bailout program.
Geithner said the shareholder measures, as well as legislation to keep corporate compensation committees independent from boards of directors, will reinforce pay guidelines that the administration released Wednesday. Those principles encourage corporate boards to adopt pay packages that reward long-term performance rather than short-term gains.
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