Treasury Secretary Hank Paulson announced today that he has discarded his opposition to an executive-compensation cap in the bailout. “The American people are angry about executive compensation, and rightfully so,” he said during a hearing with co-captain Ben Bernanke at the House Financial Services Committee. (Clearly, he had read our post on the matter.) “Many of you cite this as a serious problem, and I agree,” he went on. “We must find a way to address this in legislation, without undermining the effectiveness of the program.” This is a major concession for Paulson, who believes that capping pay will make executives less inclined to take the bailout and ultimately limit the plan’s reach. Plus, it opens up a whole new rabbit hole of conversation with lawmakers that will make the proceedings drag on even longer: How are they going to go about this capping of salaries? By allotting a dollar amount? Requiring shareholder approval for raises? Stipulating “claw backs” (making executives give back bonuses and severance when their bets fail)? Truth be told, we almost feel bad for the guy, even though he has $38 million of his own from working at Goldman Sachs. He already has to put up with a bunch of people who literally have no idea what this actually means, including the fucking president, and he hasn’t once lost his shit and been like,”You have NO IDEA how bad it is out there — NO IDEA.” How annoying is it going to be for him to explain what a fair salary on Wall Street is to the senator from Kentucky? It’s a good thing he has Bernanke to hold onto at night.
Paulson Gives Way on C.E.O. Pay; Bush to Speak Tonight [NYT]