The Wonk Room

Where Does McCain Stand On Executive Compensation?

Our guest blogger is Sam Davis, Policy Analyst at the Center for American Progress Action Fund.

This past Saturday, Sen. John McCain (R-AZ) told reporters: “I think it’s unconscionable when the guy who apparently is the head of Countrywide and his co-conspirators make huge amounts of money while Americans are facing the threat of losing their own homes.”

This sounds surprising, but we’ve heard it before. In 2002, President Bush assailed CEOs who “collect huge bonus packages when the value of their company dramatically declines,” promising to give shareholders the leverage they need to ensure greater accountability over a company’s board. More than five years later, the same thing is happening again.

If Senator McCain wants to get serious about the “unconscionable” rise in CEO pay at failing companies, there’s plenty he could do that would bring fairness and accountability back into the executive compensation system — even measures as simple as requiring that public companies submit executive pay plans to a nonbinding shareholder vote.

Reporters should ask Senator McCain what he thinks of that idea.

– Sam Davis

UPDATE: Again, if Senator McCain truly finds it “unconscionable” and “outrageous” that CEOs cash out with millions while shareholders, consumers and employees lose out, and believes shareholders and directors should punish these CEOs, what does he think of his own top economic adviser, Carly Fiorina, and how should she be reprimanded?

The former chief executive of Hewlett-Packard, Fiorina presided over the first layoffs in the 50-year history of the company during her tenure, an imperious drive to acquire Compaq Computer that was ultimately deemed a “lemon,” a 50% drop in the company’s stock, and the layoff of over 20,000 workers. Unconscionably and outrageously taking home $180 million in total compensation and a $21.1 million severance package.