Op-ed
The Wall Street Journal – Sept. 29th, 2008
The White House and Congress appear to have reached an agreement on a bailout plan that restricts executive pay at companies that participate in the bailout. The plan limits CEO compensation that encourages “unnecessary and excessive” risk-taking, creates a tax disadvantage for CEOs who are paid more than $500,000, prohibits severance payments (so-called golden parachutes), and recovers bonuses or compensation paid based on promised gains that later turn out to be “materially inaccurate.” Unfortunately, restrictions on the pay of operating executives are unlikely to strengthen the plan; instead, they have the potential to weaken it.
The advisability of imposing pay …
