Why I voted for the Pay for Performance Act...
Washington, Apr 3, 2009 - This week I voted for H.R. 1664, more commonly known as the “Pay for Performance Act of 2009” for corporate executives. The bill passed by a vote of 247 – 171 and I was one of members who voted in favor of this piece of legislation. It is important to understand that this bill aims to protect the taxpayer money used to bail out various firms and other failing corporations who have asked the government for financial assistance.
As you may know, I have consistently voted against every government bailout throughout our current financial crisis. Why? Because I believe in protecting the taxpayers’ money. These dollars should be used wisely, frugally, and in accordance with the spirit and words of the Constitution. As I feared, money from the Treasury spent on the Troubled Asset Relief Program or TARP, has thus far been used irresponsibly. It is for this reason I supported H.R. 1664, and intend to do everything in my power to henceforth ensure it will be used properly.
Once a company takes a federal subsidy or a bailout, as legislators we should be good stewards of the taxpayers money by making sure these companies do not repeat the mistakes that put their company in jeopardy in the first place. The Democrats approach to this problem is different than the way Republicans would tackle the problem. Unfortunately, bailout money has already been given out, so I prefer that we do something to curb corporate irresponsibility from this point on rather than doing nothing.
H.R. 1664 would give the U.S. Treasury the power to prohibit "unreasonable and excessive" compensation and bonuses that are not based on performance standards within the organizations that have received taxpayer money. The new curbs would apply to all employees of firms that have received capital investments from the Treasury's $700 billion financial rescue fund. The standards also would cover compensation paid to an employee after leaving a firm or before joining it to prevent so-called “golden parachutes.”
Please be assured I fully support the rights of private entities to do what they please. Corporations who do not receive federal bailout funds are free to compensate their executives however their stockholder’s see fit. However, when hundreds of billions of taxpayer dollars are allocated to keep failed corporations solvent, I want to make sure the corporate elites are not enriching themselves at the taxpayers’ expense.
As a Member of Congress I believe we have the right to set conditions on these entities which is why I consider my vote in favor of this bill to be in the best interest of the American taxpayer.