Fat Cats

Dodd's Bank Regulation Soft on Penalties

Is Sen. Chris Dodd’s bite as big as his bark? No, argues an analysis from Bloomberg News, featuring one pay analyst who characterizes the new bill to restructure the financial industry as “hollow, a toothless tiger.” Under the proposed legislation, introduced by Senate Banking Committee Chairman Dodd, management wouldn't be required to follow shareholder votes on executive pay. This comes on the heels of estimates that TARP-receiving companies Goldman Sachs, Morgan Stanley, and JPMorgan Chase will hand out a record $29.7 billion in bonuses—and accusations that Dodd, who is up for reelection, is too close for comfort with Wall Street’s powerbrokers. Though the bill requires that pay be cut when based on inaccurate financial statements, it also lacks penalties to ensure that companies follow the rules.