Fed & Treasury Pitch Pay Rules, But Will They Work?

In the article, "Fed & Treasury Pitch Pay Rules, But Will They Work?", Theo Francis discusses how the Federal Reserve and Treasury will be compensate the pay structure for some companies. The companies who had gotten extraordinary taxpayer aid are the companies being scrutinized for this compensation. The Fed's guidelines count on the agency to succeed where it failed before while the Treasury's dictates fall back on some of the old assumptions about pay and performance that lay behind pre-crisis compensation practices. The Fed's new rules consist of telling bank holding companies just how the agency intends to assess their pay practices to ensure the idea that bonuses and other incentives don't encourage bankers to take outsize risk and then putting the banks in jeopardy. While it was always their responsibility, they really mean it this time around. The Treasury's rules are firmly anchored in the top echelons of the corporate org chart. Kenneth Feinberg has the massive task of enforcing these compensation rules no matter what. His mandate was to police pay only for the top five executives and 20 highest paid other employees at each firm. His ideas lead to swapping chunks of cash for stock. No matter what plans either come up with, the main focus should always be to make sure people are focusing on what they're responsible for individually as opposed to just the firm as a whole.