Change in order on Wall Street
Executive compensation on Wall Street has been a hot topic in Washington, D.C., this past year due to the financial crash of 2007 (as it is in my family because my brother, Mark, works for Barclay’s on Wall Street).
Government officials are focusing too much on limiting pay and not enough on preventing financial crashes from recurring. Although executive compensation packages are exorbitant in these companies, I do not believe they contributed to the financial crash.
However, I do believe Wall Street employee risk-taking was a factor. In order to rein in excessive risk-taking, I agree with Ken Feinberg, the “pay czar” for the Obama administration, who said, “One goal of ours is to have executives take more of their compensation in long-term stock salary.”
In other words, employees would receive shares in their company that could not be sold for two to five years, rather than cash bonuses. This would align shareholders’ interests with the management’s, and tie employees to overall profitability of the company.
In addition, I am against establishing regulations on executive compensation packages for those companies that received bailout money from the TARP fund. I formed this opinion after speaking with Carter McDowell, an employee of the Securities Industry and Financial Markets Association. He said, “The government forced some of these companies to take money from the TARP fund, even if it wasn’t needed, to hide their instability.”
Furthermore, most of these companies are repaying the government for the money they received.
In conclusion, the Obama administration should focus on efforts to create stability in the marketplace, rather than determine pay for executives on Wall Street.
Molly Rozeboom wrote this as part of Washington Seminar at Janesville Parker High School.