Executive Compensation: How Much to Pay?

Executive Compensation: How Much to Pay? http://livingstories.googlelabs.com/lsps/executivepay <div style="padding: 8px; float: right; width: 190px;"> <img src="http://graphics8.nytimes.com/images/2007/03/05/business/15pay_chart.190.jpg" style="padding: 5px;" width="190"> The Unstoppable March of Executive Pay </div> Summary: As bonus season arrives on Wall Street, investment firms are expected to hand out record-breaking bonuses to executives. Meanwhile, Goldman Sachs, still trying to quell public outrage about its bonuses, is considering requiring that its executives donate to charities. Governments abroad set their sights late last year on executive pay as British officials announced a one-time tax on bankers' bonuses and French officials indicated that they planned to follow suit.  Late last year, government-imposed limits on executive pay figured into developments at two big companies that received major bailouts, Bank of America and General Motors. The bank's plan to repay $45 billion in loans should make it easier for it to recruit a new chief executive, but G.M. may have a problem attracting top talent. Facing a public blacklash, Wall Street firms launched a public relations campaign in an effort to tamp down the outcry over excessive pay. But it has not been easy. A decision by Goldman Sachs to "apologize" for its action and donate $500 million to small businesses was met in some quarters with derision. A Washington lawyer, Kenneth R. Feinberg, was appointed last summer by the Obama Administration to oversee the compensation of employees at seven companies that received assistance after last year's financial meltdown: the American International Group, Citigroup, Bank of America, General Motors, Chrysler and the financing arms of the two automakers. Meanwhile, Congress is considering legislation that would let shareholders vote on pay levels and require public companies to strengthen the independence of board panels that set executive pay. The legislative debate pits the public's outrage at skyrocketing pay packages against business groups who contend that strong financial incentives are needed if companies are to retain the most talented leaders.