Saturday, February 14, 2009

A Little Valentine

It seems we have a little Valentine in the stimulus plan that I wasn't aware of. I think it is a good thing but it appears that Wall Street is a little grumpy over it.

WASHINGTON — A provision buried deep inside the $787 billion economic stimulus bill would impose restrictions on executive bonuses at financial institutions that are much tougher than those proposed 10 days ago by the Treasury Department.
The provision, inserted by Senate Democrats over the objections of the Obama administration, is aimed at companies that have received financial bailout funds. It would prohibit cash bonuses and almost all other incentive compensation for the five most senior officers and the 20 highest-paid executives at large companies that receive money under the Treasury’s Troubled Asset Relief Program.

“These rules will not work,” James F. Reda, an independent compensation consultant, said on Friday. “Any smart executive will (a) pay back TARP money ASAP or (b) get another job.”

So the banks 'could lose some top talent'...from my perspective it would appear that that is exactly what needs to happen.

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