Ethics

Administration to Call for New Bonus Rules

By Ed Brayton

All of the outrage over bonuses for AIG employees has really distracted attention away from the more important issue, which is not whether bonuses should be paid by companies that get government funds but the very nature of corporate bonuses in the financial sector. The Obama administration appears ready to address that larger issue:

Treasury Secretary Tim Geithner will try to cut down on risky behavior by financial institutions by asking them to tie bonuses to the long-term health of the company rather than short-term gains, according to people briefed on his plans.

As part of a broad financial-regulatory plan to be unveiled this week, the administration wants to put in place reforms to get financial incentives for employees closer in line with the actual results of the company. Basically, it's what bonuses used to be before Wall Street went wild in recent years.

Full post as published by Dispatches from the Culture Wars on March 29, 2009 (boomark / email).