The US government is pushing for new curbs on executive salaries and bonuses, which are in part blamed for causing the financial crisis, dpa cited Treasury Secretary Timothy Geithner as saying today. But the measures were not as far-reaching as some had expected. The Treasury Department will not impose a specific salary cap and its principles will serve only as a voluntary guide for companies. Geithner said the government will propose legislation that gives company shareholders a non-binding vote on executive compensation packages, and wants companies to shift their pay structures towards longer-term rewards. The administration has also named a compensation "czar" with broad powers to restrict the salaries of financial firms that have been bailed out by the government, US media reported. The US Congress has already imposed bonus restrictions on companies that have taken government loans. The measures were aimed at bringing executive compensations "more tightly in line with the interests of shareholders and reinforcing the stability of firms and the financial system," Geithner said. Company salaries, especially on Wall Street, have provoked tremendous public outrage over the past few months, as executives appeared to be rewarded despite bringing their companies to the brink of collapse. Many companies' system of incentives and bonuses have also been blamed for encouraging executives to take unnecessary risks, which nearly brought down the entire banking system in October. "This financial crisis had many significant causes, but executive compensation practices were a contributing factor," Geithner said. "Incentives for short-term gains overwhelmed the checks and balances meant to mitigate against the risk of excess leverage." The US government has spent about 600 billion dollars bailing out Wall Street firms and others that have helped plunge the wider economy into its longest recession since the Great Depression. The announcement comes one day after the government said it would allow 10 major US banks to return their federal loans. The banks had been lobbying for weeks to pay back the government funds, in part to escape the restrictions on executive pay.
