Proposal of Congressman Wilson

Dear Friends,

This week we are focused on the ridiculous bonuses paid to American  International Group (AIG) employees at taxpayer expense, and rightly so; but I worry about the next shoe that’s going to drop. I believe that shoe will be the flipping of the compensation structure at financial companies. Due to the critical eye of Congress and the American taxpayer on bonuses, there is now an effort by the companies to flip that compensation structure.

Currently, most Wall Street firms use a compensation approach where bonuses make up a majority of the total income package for more senior employees. So, salaries are kept relatively low and bonuses are, by comparison, huge.

But this week, I read in the Wall Street Journal that companies – anticipating Congressional action on bonuses – are trying to go around Congress by proposing to significantly increase salaries rather than have to deal with scrutiny of bonuses.

That is why I introduced the TARP Wage Accountability Act.

The TARP Wage Accountability Act would stop such proposals in their tracks. My bill would force companies that took 10 billion dollars or more in TARP funds to abide by the government Cost of Living Adjustment (COLA) structure set for military and government employees. This year for example, that would mean that salaries for AIG employees couldn’t be raised more than 3.9%.

If the COLA is good enough for our soldiers and government workers, it should be good enough for Wall Street. The intent of my bill is to stop those TARP recipients that are scheming to change their pay structure to reward themselves with double or triple their salaries. I want to make sure that taxpayer money does not go to outrageous raises – raises that are not deserved.

Sincerely,


Charlie Wilson
Member of Congress
Ohio’s Sixth District

This makes me a bit uneasy.  First of all, I don’t share many people’s outrage over the AIG bonuses.  It was a very small fraction of the amount of money the government gave them.  But I’m just not comfortable about the government telling a private company how much of a raise they can give employees and/or executives irregardless of how much money we give them.  I can’t seem to put it in profound words at the moment, but I find the very notion icky.  If you don’t like what they are doing then pull the TARP money off of them or don’t give them any more and let them sink or swim on their own.  But don’t be in the business of telling them how much and how they can compensate those on their payroll.

Advertisements

One Response to “Proposal of Congressman Wilson”

  1. Old-Man Says:

    I respect your decision not to share in the outrage of the bonuses. I also agree with you on pulling the TARP money if we don’t want them to use taxpayer money for bonuses. In fact, I am one of those who thinks it should never been given anyway. But from there, I am not in agreement with you. I feel you are missing the point by saying the bonuses are only a small fraction. It’s not the “amount” of the money, it’s the fact they are taking any bonus at all. I’ll leave it with this analogy – if one of your hypothetical employees willing participated in destroying your hypothetical company, would you feel you should reward him anyway?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: