Home -> Law Blog Directory -> Legal Commentary Blogs -> Economics of Contempt

Legal Commentary

: Economics of Contempt

Executive Pay

By Anonymous

Outrage over exhorbitant executive pay at companies receiving TARP funds is entirely justified. But realistically, the government will never be able to restrict executive pay, and anyone who thinks otherwise is delusional. There are entire companies, not to mention entire legal departments, dedicated to structuring compensation packages that circumvent U.S. laws.

No matter what restrictions on executive pay the government puts in place, an endless stream of lawyers and accountants will quickly find new ways to circumvent the restrictions. Government officials are simply overmatched?they have neither the time nor the resources to compete with sophisticated compensation firms. I wish that wasn't true, but it is.

Gretchen Morgenson uses her column this week to offer numerous suggestions for how to "make Washington?s plan to rein in executive pay airtight." Morgenson, who lacks the intellectual capacity to understand credit default swaps (one of the simplest financial instruments), versus compensation firms. This is the kind of match-up I'm talking about.

Full post as published by Economics of Contempt on February 08, 2009 (boomark / email).