Sen. Barack Obama today assailed hefty pay for corporate bosses and touted legislation he proposed that would give shareholders nonbinding votes on executives’ compensation packages.
“This isn’t just about expressing outrage,” Mr. Obama said. “It’s about changing a system where bad behavior is rewarded — so that we can hold CEOs accountable, and make sure they’re acting in a way that’s good for their company, good for our economy and good for America, not just good for themselves.”
Mr. Obama, the front-runner in a race for the Democratic presidential nomination that has increasingly taken a populist turn, took the stand against executive greed at a press conference in Indianapolis, where he is campaigning ahead of Indiana’s May 6 primary.
Mr. Obama and Democratic rival Sen. Hillary Rodham Clinton of New York have battled for union votes and middle-class voters hard hit by the country’s economic downturn.
“We’ve seen what happens when CEOs are paid for doing a job no matter how bad a job they’re doing,” Mr. Obama of Illinois said. “We can’t afford to postpone reform any longer. That’s why Washington needs to act immediately to pass this legislation.”
As he has done more often recently, Mr. Obama used the occasion to criticize presumptive Republican nominee Sen. John McCain of Arizona, noting Mr. McCain’s recent comments about the disproportionate pay showered on corporate CEOs.
“I was glad to hear it,” Mr. Obama said. “But when he’s had the chance to do something about this problem, he’s opted for continuing the do-nothing approach of the Bush years. And this seems to be a trend with Senator McCain.”
Mr. Obama said America needs a president who understands the “fundamental truth that’s been at the heart of America’s economic success: that each American does better when all Americans do better; that the well-being of American business and the American people are aligned.”
“That’s the kind of leadership the American people deserve, and that’s the kind of leadership I intend to offer as president,” he said.
McCain campaign spokesman Tucker Bounds said Mr. Obama was grandstanding on the issue and his “words don’t match his action,” a criticism the campaign repeatedly lodges against Mr. Obama. “Apparently Senator Obama thinks cheap political attacks and typical Washington shenanigans substitute for real leadership,” Mr. Bounds said. “Corporate boards have the power to serve shareholders and make CEO pay match performance.” He said Mr. McCain opposes CEOs using “cozy relationships with boards … to rake in millions on the backs of small investors” and would use the bully pulpit of the presidency to press the issue.
Mr. Obama’s bill, the Shareholder Vote on Executive Compensation Act, would not limit executive compensation but would highlight for shareholders the salary and benefit packages and give shareholders a nonbinding vote on the deals.
In calling for swift passage of the bill, Mr. Obama cited a recent study in USA Today that showed the top 50 CEOs each pocketed about $15.7 million last year, despite many of their companies losing money.
Mr. Obama said the country’s sagging economy is more than a policy debate for families struggling with rising prices of health care, fuel and college tuition.
“I wasn’t particularly surprised when I read the other day about a poll that shows folks are now more downbeat about their futures than they’ve been in nearly 50 years,” he said. “But we also know that’s only half the story, because Wall Street executives have been doing just fine. Some CEOs make more in one day than their workers make in one year.”
He singled out the home-building company, KB Home, which he said lost nearly $1 billion last year but paid the CEO a $6 million cash bonus on top of his $1 million base salary.
“When Countrywide Financial was sold a few months ago, its top two executives got a combined $19 million,” Mr. Obama said. “Nevermind that Countrywide is as responsible as anyone for the scandalous mortgage crisis we’ve got today — a crisis that’s the source of many of our other economic problems.”
“This is an outrage,” he said.
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