The Obama administration is acting on its plans to regulate executive pay. Executives of companies usually draw a low salary but receive hefty bonuses, usually in the millions of dollars. Companies that have received bailout money have a cap on the salary and bonuses that their executives can receive. Additionally, all payment plans must be reviewed by White House appointed officials. Executives of the companies receiving the largest pieces of the bailout money are further capped at only receiving bonuses less than a third of their annual salary. This compensation regulation by the government on private, now government run, companies have raised cries from the public of heavy handed government regulation. The White House is planning on controling compensation to all public companies, not just those who have received bailout money.

The Obama administration wants to regulate pay for all publically traded companies. This would be accomplished by share holder agreements. This would allow general shareholders to have a vote on executive pay rather than only those shareholders who hold large stakes in the company or hold certain types of shares.

This type of regulation is within the purview of the Federal Government’s power. There is an argument to be made that this is just another case of Federal fingers further entrenching themselves in the commercial sector. It is a more complicated situation than that however. Today’s companies are larger than they have ever been, wielding more influence on the economical and social markets of the country. Companies have grown so large in fact, that they can threaten the general welfare of the country. AIG is a great example, a huge insurance company, that when it fell it brought other companies down with it. Now, the government has an obligation to defend the welfare of the country. Regulating executive compensations could be a round about way of doing that. That type of regulation however puts a sour taste in my mouth. With the technology of today, the brilliance of one man can change the world, but so can the greed of another.

With public companies coming under threat of government regulation, the only safe bet is to keep your company private; but who knows how long that will even be safe.

On a side note, the highest court in France just ruled that access to the internet is a basic human right…wow.

http://technology.timesonline.co.uk/tol/news/tech_and_web/article6478542.ece