The Obama administration reportedly is seeking to give the Securities & Exchange Commission new powers that would allow it to force financial institutions to put the issue of executive compensation to a vote by shareholders.
Although the administration seems to have backed away from interfering with the base compensation structure in the financial services industry, it still plans to pursue restrictions on the bonuses people receive.
According to a report on Bloomberg.com, Congress would have to approve the authority for the nonbinding shareholder votes, which would cover bonuses and salaries to severance packages.
The Bloomberg article says the changes are designed to ensure that even after financial institutions free themselves of government buy-in that they still will abide by more universal guidelines for reducing systemic risks. It is the current pay/bonus culture that Treasury Secretary Timothy Geithner has repeatedly blamed for contributing to the current financial crisis.
For more, visit Bloomberg.com.