Here’s an important point about President Obama’s new restrictions on executive pay at companies receiving aid from the Treasury Department: they’re not retroactive. A bank that has already received bailout money would not need to abide by the limits unless it accepts more cash in the future.
(The WaPo buries this in the middle of its story on the issue, then notes that even if they were retroactive, the rules likely would have applied to only three companies: AIG, Citigroup, and Bank of America.)
But Sen. Claire McCaskill’s (D-MO) executive-pay cap bill is retroactive, applying to companies that have received past as well as pending bailout infusions. And McCaskill just said she has no intention of giving up her push to attach her version of CEO pay caps to the economic stimulus bill. Here’s her statement:
Everyone is on the right track here. I’m proud the president made this announcement in terms of the rules changing. I’m gratified that my colleagues also agreed that something must be done to restore the confidence of the American people that we have some idea of what’s going on. I stand willing and ready to work with everyone to change the arrogant, greedy culture that created this mess in the first place.
McCaskill’s office added that she would still push her CEO pay proposal “as a fallback assurance” that the new Treasury Department rules would be heeded. Sen. Bernie Sanders (I-VT), another leader on the executive-pay issue, also weighed in to call Obama’s move “a good step forward, but we have to go further.”
Will Democratic leaders allow a vote on McCaskill’s bill during the stimulus debate? That remains to be seen.
Late Update: Sen. John Kerry (D-MA) joined the emerging chorus this afternoon with a letter to Treasury Secretary Geithner touting his proposal to limit the tax-deductibility of executive pay — a separate issue, but equally relevant in terms of reining in bailed-out companies that are playing fast and loose with public funds.
Late Late Update: Sens. Olympia Snowe (R-ME) and Ron Wyden (D-OR) aren’t giving up either; they just announced plans to offer an amendment forcing bailed-out companies to repay already distributed executive bonuses that exceed $100,000. The subtle message from Congress to the administration on these executive pay caps seems to be, “Good start — but not enough for us.”