Waxman weighs in…

September 22, 2008

Henry Waxman, chairman of the House Committee on Oversight and Government Reform just issued a statement on his take on the bailout. Here’s a snippet:

The Administration’s plan completely eviscerates the concept of moral hazard. It would enrich the Wall Street executives whose reckless investments caused the financial crisis. The taxpayer is being asked to risk billions to protect the bonuses of investment bankers. There was public outrage when the CEOs of Countrywide, Merrill Lynch, and Citigroup walked away with hundreds of millions of dollars after causing billions of dollars of losses. But what President Bush and Secretary Paulson are proposing is worse: the taxpayer will be funding million-dollar payouts on Wall Street.

Clearly, executive compensation — something we spend a lot of time talking about here on footnoted — is increasingly becoming a key issue. But setting limits of any kind will never fly and even those of us who argue that too many people are getting paid for mediocre — or worse — performance — will never work because there’s simply too many ways to define compensation. Waxman’s statement actually says no CEO whose company qualifies for financial relief should get over $2 million a year. Just to put that into perspective, Lloyd Blankfein of Goldman’s total compensation last year was just over $70 million and the five NEOs as a group took pocketed $321 million.

Time to consult the Magic Eight ball and see what it says…

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