Former Fed Prez: Get Control of CEO Pay

Feb 26, 2004

By George Anderson

William McDonough, former president of the Federal Reserve Bank of New York and current chairman of the Public Company Accounting Oversight Board (PCAOB) said the government
may eventually intervene to limit executive compensation if companies don’t begin to exercise restraint.

“If the anger of the American people continues and business leaders do not wake up soon, I predict that there will be legislation,” said Mr. McDonough.

As for those who worry about talent being lost if pay packages are reined in, Mr. McDonough told the audience at a meeting of the Economic Club of Chicago, “I would turn to the
directors and point out that there are lots of fine people in America, many of them in this room, who would be happy to be CEOs at more rational levels of income.”

Moderator’s Comment: Do you agree with William McDonough on the potential for the government
to pass legislation limiting executive compensation? How would you determine what represents fair compensation?

Mr. McDonough has expressed a frustration shared by many. We doubt, however, we will ever see legislation passed limiting executive compensation packages.
Anderson – Moderator

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