In this podcast, Jeff Sommer and Stephen Labaton discussed the compensation of the executives whose companies received the federal government's bailout. The Obama administration wanted to restrict executives’ pay at those companies because they got the hefty money coming from government’s bailout, and the companies still had financial problems. It was really unfair. Therefore, a lawyer, Kenneth R. Feinberg, was assigned to supervise the compensation of the executives at those companies by the Treasury Department. There are seven companies whose executives’ compensation will directly be controlled by government until these companies pay back the money which government supported. Five of the seven companies are the American International Group, Citibank, Chrysler, General Motors, and Bank of America. At the same time, the US government also tried to make a law to supervise the executives’ salaries and bonus. Currently, Feinberg did not have criteria to judge whether the compensation is overpaid or not, but those seven companies will submit the pay packages of the executives in sixty days once new rule will practice.
In my opinion, government has to set up an institute which can help shareholders to watch over the executives’ pay. The executives earn the money which belongs to every shareholder, so their pays have to relate to the companies’ earnings. However, some companies did not earn the money, but their executives still receive high salaries and bonus, and shareholders cannot make any decision on the compensation of companies’ executives. Therefore, government can play a role which helps shareholders to watch their money for “stealing” by executives’ compensation.
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