According to news reports, the Obama Administration will soon announce that companies receiving large amounts of TARP money will have to cut the compensation of their top executives. When it comes to these bonuses and excessive compensation, President Obama and Congress agree: enough is enough.
The American people are justifiably outraged at the reports of rescued corporations rewarding their executives again with enormous, multi-million dollar bonuses. The House has already voted for corporate accountability in legislation we passed in July giving shareholders an advisory vote on executive pay, mandating the appointment of independent directors to compensation committees, and disclosing bonus pay structures.
In the next few weeks, these urgently-needed reforms will be included in comprehensive financial regulatory reform that Financial Services Committee Chairman Barney Frank will bring to the floor of the House. In April, the House also passed legislation prohibiting taxpayer-assisted financial institutions, including Fannie Mae and Freddie Mac, from awarding bonuses that are not based on an executive's performance.
Corporate leaders must not only reform their executive pay practices, but must also demonstrate their commitment to working with Congress and the Obama Administration on regulatory reform that brings accountability to our financial system.