Administration, Congress seek to rein in exec pay

Is the long march has become a fast walk off a short pier?

From the Associated Press:

WASHINGTON (AP) -- The Obama administration struck a delicate balance on executive pay Thursday, blaming flawed compensation packages for encouraging disastrous risk-taking but insisting it doesn't want to dictate how corporations reward their top people.

The administration named Kenneth Feinberg, a lawyer who oversaw payments to families of Sept. 11 victims, as a "special master" with power to reject pay plans he deems excessive at the seven companies with the biggest injections of public money. Feinberg also would have authority to review compensation for the top 100 salaried employees at those companies.

But on Thursday Democrats and administration officials agreed that companies across the private sector need to adjust compensation practices to avoid damaging the economy.

"We believe that compensation practices must be better aligned with long-term value and prudent risk management at all firms, and not just for the financial services industry," Sperling said.

The Federal Reserve, meanwhile, is developing its own set of compensation guidelines for the banks that it oversees. The Fed already has standards for banks that declare that compensation that could lead to material financial losses is considered unsafe and unsound. But regulators are prohibited from using those standards to prescribe specific levels of pay.