Geithner Promises Plan by Mid-June for Realigning Executive Pay to Performance
Treasury secretary Timothy Geithner says the Obama administration’s plan to help realign executive pay with performance will be rolled out by mid-June, according to Bloomberg News. “I don’t think we can go back to the way it was,” Geithner said in an interview on Bloomberg Television’s Political Capital with Al Hunt, which the news service says will air tonight and over the weekend. “We’re going to need to see very, very substantial change.”
The pay plan is to be included in a proposed comprehensive overhaul of financial regulation aimed at both protecting consumers and reducing vulnerability to crises, the news service reports. Geithner has previously ruled out setting specific caps on pay and declined to alter existing compensation contracts.
Executive pay has been a frequent topic in Knowledge at Wharton, especially since the financial crisis. In a February article,"Outrage over Outsized Executive Compensation: Who Should Fix It and How?," Wharton accounting professor Wayne Guay predicted that the government, under the leadership of President Obama and a Democratic-controlled Congress, will attempt to limit executive pay. "It feels like something the public wants."
More from Knowledge at Wharton on executive compensation: