Corporate And Financial Institution Compensation Fairness Act Of 2009

Floor Speech

Corporate And Financial Institution Compensation Fairness Act Of 2009

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Mr. SCOTT of Virginia. Mr. Speaker, let me just start out by saying this. We're hearing complaints from the other side that we are taking over the private enterprise system; we are taking over the free enterprise system.

Let me remind them that it wasn't us that went to the private enterprise system. It wasn't the government that went to Wall Street. Wall Street came to the government to bail them out from their behaviors.

Now, Mr. Speaker, the American landscape is absolutely littered with company after company that has been driven into the ground by executives who were greedy, who were selfish, cared only about themselves, with these huge salaries, and these companies are left to wither on the vine after they have gotten their golden parachutes and have landed elsewhere.

Somebody needs to say something about the American people. This is a free enterprise system, but it's not just free for top executives. It's free for shareholders. It's free for those men and women who have given their lives, their blood, their sweat, and their tears. And to see their companies in shambles because of excessive pay by executives who have abandoned those companies, what about their pensions? What about their retirements that have gone?

No, Mr. Speaker, this is not about taking over the private enterprise system. Mr. Speaker, this is about saving and protecting the free enterprise system so that we all can be free to participate in this system.

Mr. Speaker, what we have before us here is something because of the fact that financial firms put together compensation packages and bonuses that were based on incentives, that were laden with excessive risk, that caused our financial crisis and brought this economy to the edge of collapse and caused us here in Congress to go and get over $2 trillion of the American taxpayers' money to bail them out.

Now, the first order of business--and this is why this bill that Chairman Frank has pushed, and I'm proud to say that we worked on this together over 3 years ago. Had we had that bill in place 3 years ago, we might not have had this financial crisis, because we would have been able to rein in the risky corporate behavior that brought about the collapse. So that's what we are doing. We're putting forward some reasonable means here.

What is more reasonable than giving the shareholders a simple say, a vote? It's nonbinding. We are not setting the salaries. Even the shareholders are not. But don't they have a right? Isn't it their company? They are the ones that are pumping the money into it.

The other feature about the bill, Mr. Speaker, that is very simple, very reasonable, is that we require these compensation committees that are on these boards to be independent. Right now it's a cozy relationship. The CEO refers to them as his board. They're handpicked. They are paid $50,000, $100,000, $200,000 to come and sit.

They need to be independent. And we have rules and regulations in the bill that allow for the regulators to determine what these conditions will be to make sure they're independent. We make sure that the consultants who come in and help set up these compensation packages are there.

The other point that we do, Mr. Speaker, is this, which is very important: we also want to make sure that as we move forward in this, that risky behavior is disclosed so that we can prevent it.

It's a very good bill, Mr. Speaker, and I urge its passage.

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