Bush: Link exec salaries to performance

[Ron Burgundy]

AP - President Bush took aim Wednesday at lavish salaries and bonuses for corporate executives, standing on Wall Street to issue a sharp warning for corporate boards to "step up to their responsibilities" and tie compensation packages to performance.

Bush's "State of the Economy" speech, delivered from the financial center of the world, was aimed at bringing his economic message out of the shadows of the Iraq war. On his second day in a row focused on the economy, the government reported faster-than-expected growth of 3.5 percent in the final quarter of last year.

The president acknowledged people's continuing nervousness about their financial picture, despite a string of similar reports that provide some reason for optimism. He said he realized that stories about the enormous salaries and other perks for CEOs, for instance, create anger and uncertainty that affect the country's investors.

The president does not endorse any government role in reducing those packages. Instead, Bush highlighted new federal rules that the administration thinks are a better path toward wise compensation decisions by companies.

"Government should not decide the compensation for America's corporate executives," he said. "But the salaries and bonuses of CEOs should be based on their success at improving their companies and bringing value to their shareholders."

In effect starting last month, the rules give investors access to clearer and more detailed information from public companies on their top executives' pay packages and perks. Their impact will become apparent as corporations begin issuing 2006 annual reports.

"America's corporate boardrooms must step up to their responsibilities," Bush said. "You need to pay attention to the executive compensation packages that you approve. You need to show the world that America's businesses are a model of transparency and good corporate governance."

source: http://news.yahoo.com/s/ap/20070131/ap_on_go_pr_wh/bush [link]