At a marathon hearing before Barney Frank's House Financial Services Committee, representatives from the Treasury Department, the Federal Reserve, and the SEC were grilled for more than two hours on executive compensation. There was some brief partisan bickering among the representatives as each side of the aisle blamed the other for the bailout and there was some grandstanding as a few Members made barely-related speeches instead of engaging on the issue. But there was widespread agreement that bad pay plans with perverse incentives contributed to the economic meltdown and diminish the credibility of our financial markets.
In the second panel, Lynn Turner (former SEC chief accountant and one of the smartest guys I know) and I both argued that it is wrong to focus on the specific elements of executive pay packages and the only solution is to remove obstacles to shareholder oversight of board members. You can watch the hearing webcast and read my testimony.
Nell Minow — Editor
