U.S. Chamber Warns Against Government Command and Control Compensation Mandate

WASHINGTON, D.C.—The U.S. Chamber of Commerce today warned against a bill that would establish government control and regulation of compensation for executives and other workers at U.S. firms. The Corporate and Financial Institution Compensation Fairness Act of 2009 (H.R. 3269) is being marked up today in the full House Financial Services Committee.

"We believe that strong corporate governance is critical to a vibrant and growing economy," said Tom Quaadman, executive director of the U.S. Chamber's Center for Capital Markets Competitiveness. "However, the passage of this legislation would create a command and control regulatory scheme that would restrict the economic growth and job creation that our nation so desperately needs."

In a letter sent to Capitol Hill, the Chamber said that corporate executives' compensation should be premised on a balance of individual accomplishment, corporate performance, adherence to risk management, compliance with laws and regulations, and a focus on shareholder value. However, H.R. 3269 goes well beyond executive compensation and would allow government regulation of incentive compensation for employees throughout a company—from the CEO to the staff assistant.

"This legislation goes well beyond effective disclosure and sound compensation practices," Quaadman said. "Instead, it moves the government into the role of setting compensation policies for virtually every employee of all financial firms."

The Chamber cited concerns over the bill that would allow for too much government interference in the free market. It specifically warned against Section 4 that represents a large-scale intrusion by the federal government into the operations of U.S. businesses.

The Chamber's letter is available at: http://www.uschamber.com/issues/letters/2009/090727_hr3269.htm

The U.S. Chamber is the world's largest business federation representing more than 3 million businesses and organizations of every size, sector, and region.

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