Man-Caused Disaster
Introduced in House as the Grayson-Himes Pay For Performance Act of 2009, H.R.1664 is House Financial Services Committee chair Barney Frank’s attempt to put his hand down our pockets and grab something (such as, I hope, our money). I don’t know about you, but I’d rather not have Frank’s hands anywhere near my pocket.
According to Beyond AIG: A bill to let Big Government set your salary
The new legislation, the “Pay for Performance Act of 2009,” would impose government controls on the pay of all employees — not just top executives — of companies that have received a capital investment from the U.S. government. It would, like the tax measure, be retroactive, changing the terms of compensation agreements already in place. And it would give Treasury Secretary Timothy Geithner extraordinary power to determine the pay of thousands of employees of American companies.
The purpose of the legislation is to “prohibit unreasonable and excessive compensation and compensation not based on performance standards,” according to the bill’s language. That includes regular pay, bonuses — everything — paid to employees of companies in whom the government has a capital stake, including those that have received funds through the Troubled Assets Relief Program, or TARP, as well as Fannie Mae and Freddie Mac.
The measure is not limited just to those firms that received the largest sums of money, or just to the top 25 or 50 executives of those companies. It applies to all employees of all companies involved, for as long as the government is invested. And it would not only apply going forward, but also retroactively to existing contracts and pay arrangements of institutions that have already received funds.
And who would get to determine what is unreasonable? Why Treasury Secretary Tim ‘TurboTax’ Geithner.
In addition, the bill gives Geithner the authority to decide what pay is “unreasonable” or “excessive.” And it directs the Treasury Department to come up with a method to evaluate “the performance of the individual executive or employee to whom the payment relates.”
This is freaking hilarious. The government is going to come up with a method to evaluate performance? The government can barely come up with a method to evaluate it’s own performance, where “profit”, “productivity”, and “innovation” are not exactly watchwords. The government is notoriously poor at establishing balanced performance measures (i.e., a balanced scorecard). Rather than establish balanced measures, the government tends to measure only inputs, rather than actual results, or benefits.
Now I know what Homeland Security Secretary Napolitano meant by “man-caused disasters”. Just pay attention to Barney Frank’s next move.
This Is Your New Bonus