Missing in Action from Bailout bill…

Over the past few days, there’s been lots of talk about making the scoundrels who got us into the type of mess that requires a $700 billion bailout, pay for their actions, which of course, makes for good man-on-the-street outrage. Not to mention plenty of opportunity for politicians to shake their fists.

And, while the 110-page “Emergency Economic Stabilization Act of 2008” — aka “the bailout” — which is available here (pdf) does pay lip service to executive compensation and does include some language on getting money back going forward, it does absolutely nothing to hold a number of key folks accountable.

Their names are familiar to most footnoted readers: Angelo Mozilo, Stan O’Neal, Mike Perry, Kerry Killinger, Jimmy Cayne and others who walked away with millions of dollars when things were going well, but have left the rest of us holding the proverbial bag. So while we hear lots of talk about the end of golden parachutes, the reality is pretty different. The fact remains that these folks may not be as welcome as they once were (or thought to be such geniuses), but they still get to keep the spoils. Here’s the exact language from the bill:

a provision for the recovery by the financial institution of any bonus or incentive compensation paid to a senior executive officer based on statements of earnings, gains, or other criteria that are later proven to be materially inaccurate

The bill — at least as I understand it — does nothing for employment agreements that already exist and only seems to apply to new ones going forward, which seems like a loophole large enough to drive a semi through. Indeed, one Treasury Official quoted in this CNN/Money story, said, “We’re not abrogating contracts.”

There’s lots of other things in the bill — a limit on tax deductions for compensation that’s over $500K and a separate section on golden parachutes — that will enable lawmakers to stand up on TV and make this more palatable to Main Street.

Mark Borges, a respected compensation expert and someone I often turn to when I have a question, has been blogging up a storm tracking the various changes in the bill over the weekend, posting three separate times last night as the bill was going through its various changes. While there’s lots of people spouting off about what this bill means, Mark, who closed his last post last night by saying ” I’m hoping that it doesn’t change anymore” clearly understands the nuances.