So? Isn’t that the whole purpose of the statute? If the stock’s value goes up, and you’re paying back TARP, and the taxpayers [are] getting their money back, and the corporate people are going to get a, quote, windfall? Well, that’s something we’re willing to consider.
And then, long-term stock–five years out and longer–redeemable if and when you repay the taxpayer, that portion of it.
Now, I don’t know–I’m asked all the time, well, will Wall Street adopt any of these principles? I get the following answers: “We already are doing it.” “We’ve been doing it for years.’’ “I endorse what you’re doing.” “That’s good, we’ve been doing that.” “That’s exactly what we’re doing.”
Or, I hear, “If you’re doing it, we better do it.” Or, I hear, “We’ll take it under advisement. ’’
Now, my mandate does not include what interests you the most: institutional corporate governance. I’m not involved in that, thank goodness. That’s not part of my statutory mandate, and I’m not looking to, again, broaden my role here. I have a very narrow function.
I do hear–and I don’t know, I take no position on this–I do hear two arguments about corporate governance in Washington. Argument No. 1: We need institutional reform. Independent compensation committees are not really independent. Professor [Jay] Lorsch [of Harvard Business School] mentioned this a few minutes ago. Independent–there is no such thing as independent consultants on compensation.
Say to pay has to be restructured. Split off the CEO from the chairman. I hear these arguments. And that argument is that institutional reform, its time has passed. We need it right away.
I also hear the other argument, which is: It’s all about people. You don’t really need a lot of institutional reform, we’re in enough trouble already without talking about reform. And that what we really need are more independent thinking, stronger willed people that make these decisions concerning compensation. I don’t know the answer to the questions, but I constantly hear those arguments when people are hoping that I’ll broaden my mandate to include corporate governance well beyond the fixing of compensation under the statute as it now reads.
So that’s sort of a summary, a 20-minute summary, of what I’m doing, what I’ve been asked to do by the Secretary of the Treasury, under the law as it was written. I do not claim that I have the silver bullet, and that my recommendation–not my recommendations, my determinations–are the only answer. I have carefully considered all of these arguments about how people will leave, how the taxpayer’s money is at risk, how I haven’t gone far enough, that I should be more vindictive.
And I can only say that I appear to have sufficiently alienated both Main Street and Wall Street, that I’m doing something right here, I think. Trying to strike that balance as best I can, under the law that was written, and that’s sort of the summary as it now stands.
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