Geithner says shareholders need say in executive pay | U.S. | Reuters: "WASHINGTON (Reuters) - U.S. Treasury Secretary Timothy Geithner said on Wednesday the Obama administration wants Congress to pass new laws giving securities regulators power to force companies to let shareholders have more say in setting executive pay levels..."
The GOP response to positions like this has always been "They can sell their stock if they don't like what the company is doing." This is the same canard tossed at labor unions when they want a raise or say in management--"Buy stock then you can share in the profits." But have stockholders been getting a fair deal lately? When a company is doing well and they make a 30% return is the CEO entitled to 1000% raise? When the stock declines to 1% of its maximum value and the company is bankrupt is CEO sufficiently punished by a measly 50% bonus? And how does dumping your now worthless stock recover your lost assets? But is the government meddling in this via czars the right method is address an obvious problem? Either WWII tax rules need to be implemented or we need simple legislation saying that a CEO cannot be paid more than, say, 200 times the rate of the lowest paid employee.
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