Congressman Frank: Executive Bonuses Are Wrong And Will Be Stopped
Barney Frank, Congressman (D-Mass) Chairman Of The House Finance Committee joined The John Gambling Show to discuss bonuses for Fannie Mae and Freddie Mac, Federal Funds for mutual banks and the economy.
Congressman Frank said the the Finance Committee has proposed a bill that banned executive bonuses going forward and would also repeal, if adopted by the Senate would ban retroactive bonuses as well. The bonuses going to Fannie Mae and Freddie Mac is not the only problem; there are one way streets of bonuses going to many companies. So if a company or an investment fails, the bonuses should be paid out anyway which is the problem according to Congressman Frank. Congressman Frank said that if his bill passes in the Senate, these bonuses would not be paid out.
Congressman Frank added the problem with Executive compensation is that when they take risks that make money, either way regardless if the risk blows up in their face. Congressman Frank said that he never gave any guarantee to those investing with Fannie or Freddie; in fact he said quite the opposite. The bottom line: these bonuses are wrong and he hopes his new bill will put a stop to them.
Finally, Congressman Frank said that next week, there will be a vote on a bill that imposes tough rules on Credit companies, regardless if they received bailout money or not. Congressman Frank believes this will pass the House and get to the Senate in early May.
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