Geithner: No Pay Caps for CEOs

Scared CEOs can stop biting their fingernails: it doesn’t look like pay caps are in their future. Speaking to Newsweek’s Jon Meacham, Treasury Secretary Timothy Geithner said that though the government should put “broad constraints” on pay that encourages executives to take short-term risks, the government won’t intrude further. "I don't think our government should set caps on compensation," he said. Government regulations should tie incentive pay to long-term performance and give shareholders the right to vote on salary packages, he added. Geithner struck a relatively positive note overall, saying the economy has “clearly stabilized,” but that things will still “feel fragile for a while.” The Treasury Secretary also gave an interesting insight into the opportunity the Obama administration sees in the current crisis, saying the “impetus for reform” must be seized while “the trauma” of the experience is still lingering. He said the country’s growing deficit will be one of the “defining economic challenges of the next five years.”