New Regulations for Wall Street Pay

A House panel passed a broadly worded measure today regulating financial executives' compensation, The Wall Street Journal reports. The bill, approved in a 40-28 vote by the House Financial Services Committee, authorizes restrictions on “inappropriate or imprudently risky” pay packages—specifically Fannie Mae, Freddie Mac, and other financial companies—with the exception of firms with less than $1 billion in assets. The legislation also guarantees more input from shareholders, as well as requiring that independent directors are included in board compensation committees. Opposing Republicans worried that “federal bureaucrats” would be setting pay levels for employees, but Democrats argued that the government wouldn’t be responsible for the task—shareholders would weigh in. “There’s nothing in this bill that allows the government to set compensation,” said Rep. Mel Watt, a Democrat from North Carolina. “Quit trying to hide behind the government as a big, bad entity.”