George W. Bush on Jan. 31 took aim at the kinds of people he once joked were his political base, urging corporate boards to tie executives' lavish pay and bonuses to job performance. "America's businesses have responsibilities here in America," he said in New York City in a speech touting his economic policy and priorities one week before submitting his proposed budget.
Bush said shareholders should know what companies' top executives are paid, and "America's corporate boardrooms must step up to their responsibilities" by linking pay to performance. "Government should not decide the compensation for America's corporate executives, but the salaries and bonuses of CEOs should be based on their success at improving their companies and bringing value to their shareholders," said the U.S. president.
"You need to pay attention to the executive compensation packages that you approve. You need to show the world that American businesses are a model of transparency and good corporate governance," he said.
Bush's message came as opposition Democrats weighed legislation requiring shareholder approval of chief executive officer compensation. "What you have is clear evidence that the boards of directors simply aren't doing the job of representing the shareholders in this one area. And there's a reason for it," said democratic representative Barney Frank, the chairman of the House Financial Services Committee. However, he made clear that Washington would not decided who gets paid what, saying: "We should let the owners of the companies decide what the CEO pay should be."
Copyright Agence France-Presse, 2007