The Say On Pay: Should the Federal Reserve be Empowered to Regulate Risk-Inducing Pay?

A year after the economic meltdown that brought on bailouts and ultimately an economics stimulus package to the tune of trillions of dollars, the government looks to be trying to stop such an occurrence in the future. The proposed antidote being a new authority assigned to the Federal Reserve where compensation packages will be analyzed to see if they could bring down the economic system.

I don't really buy this. The government should not have any say on how companies pay their executives unless when federal money is involved. Whilst the bank bailouts of '08 could create a moral hazard problem whereas financial sector companies could not feel compelled to limit risk and stay solvent thinking that the government will help them regardless, I believe that even those companies that have been saved see the value in limiting risk. The fact of the matter is that it's the pay that drives the best talent to these companies and if American companies are going to be put at a severe disadvantage in terms of offering superior pay over overseas competitors such as Deutsche Bank and Barclays.

While stopping another 2008-like economic meltdown is important, it should not be handled by allowing the government to put limit pay packages that put American companies at a competitive disadvantage.