It is good to see that President Obama’s first law concerned The fight for fair pay.

President Barack Obama’s first bill, the Lilly Ledbetter Fair Pay Act he signed into law, loosens the statute of limitations under which workers can sue employers for pay discrimination based on characteristics such as gender, race, age or disability.  To ward off discrimination suits, companies will need to meticulously document pay decisions and retain detailed employment records, legal experts say.

It is rather ironic that should have been the first bill, since at the same time he is acting on salaries and compensation at the other end of the scale.

The President proposes to limit the total compensation for senior executives of those companies receiving support under the bailout arrangement.  The top brass would no longer have golden parachutes and the severance packages to those in the second tire would be limited to one year’s salary.  Although it may sound perfectly reasonable to you and me, it immediately raises criticisms from others.

For example, Carly Fiorina, former chief executive of HP, believes that Government shouldn’t decide executive pay.

Americans are outraged over excessive CEO pay and perks. That outrage is justified, particularly when American taxpayers are footing the bill.  Our capitalist system works best when there is transparency and accountability. There has been too little of both on Wall Street.

She is concerned that the proposed cap for top executive pay at $500,000 for institutions that have received bailout money is arbitrary and applies only to them.  She calls for an across-the-board approach.

• To strengthen transparency, all aspects of CEO pay and perks should be fully disclosed on a regular basis. This should include airplanes, cars, golf-club memberships, bonuses, stock options, retirement plans and salaries — in short everything that a common-sense person would consider part of a CEO reward package.
• To strengthen accountability, all aspects of CEO compensation should be voted on by shareholders on an annual basis.

These are very reasonable suggestions and legislation to bring them in would receive wide support.  However the President’s proposed limits send a strong message and prepare the ground for such legislation down the road.  Open government requires transparency and equity.  Fair pay for all should apply at all levels.

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