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Executive Compensation

Fat cat compensation has nothing to do with good corporate performance. Prior to the financial crisis, the CEOs of the giant financial institutions that drove our economy off a cliff received exorbitant compensation packages. Corporate officers should be paid for long-term performance, not short-term illusions.

Public Citizen proposes three specific reforms to hold managers of financial firms accountable and ensure that compensation is tied to long-term value:

  • The CEOs who headed companies that received bailouts should pay back any compensation above the salary of the president of the United States for five years leading up to their company’s collapse.
  • Congress should mandate that all annual compensation above $2 million for employees of publicly traded companies be set aside for seven years before they receive it, to ensure that they work to create long-term value, not short-term profit.
  • All compensation for the executives and top-paid employees of publicly traded firms should be approved by votes of long-term shareholders.

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