The Hindu Business Line : Paulson agrees to put limit on executive pay: report

LONDON: Reversing his position, US Treasury Secretary, Mr Henry Paulson has agreed to put some limits on the pay packet of executives of bankrupt financial institutions that will benefit from the $700-billion bailout package, a media report said.

According to Financial Times, Mr Paulson has abandoned his previous assertion that congressionally-mandated curbs on executive compensation would make the bailout less effective.

“We must find a way to address this in legislation but without undermining the effectiveness of this programme,'' FT quoted Mr Paulson as saying.

Though Mr Paulson and lawmakers were still trying to reach a final agreement on the structure of an executive pay provision, the move by Treasury Secretary follows the Senate Banking Committee Chairman, Mr Christopher Dodd's statement that Congress would not pass legislation without taking on the issue, the report added.

Republican presidential candidate, Mr John McCain had also said that the senior leaders of any firm that is bailed out should not be making more than the highest-paid government official.

A draft proposal from Mr Dodd would give the US Treasury the power to ban 'inappropriate or excessive' payments. It would also install a so-called “clawback'' provision that would require executives to give up benefits if results were shown to have been overstated, the report stated.

Mr Paulson's previous stance, that fewer executives might join the programme if their pay was limited, was eviscerated by Chairman of the House financial services committee, Mr Barney Frank.

He had said that any executive who made a decision on the US economy based on their own 'millions' was 'selfish and unpatriotic', the report added. - PTI

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