The House of Representatives today approved legislation that, among other things, would empower the government to prevent “inappropriate or imprudently risky compensation practices” and ban pay that “could threaten the safety and soundness of financial institutions” with more than $1 billion in assets. This, of course, is pretty crazy, and White House spokesman Robert Gibbs has already skeptically pointed out that “while there are a lot of good things” in said bill, it sure “puts the government in charge of setting a lot of different salaries.” We think that this was probably a vote of passion, not one of common sense, and that the House was perhaps overstimulated by the executive-compensation report released by Andrew Cuomo’s office yesterday. But the report, which bears the fiery title “No Rhyme, No Reason: The ‘Heads I Win, Tails You Lose’ Bank Bonus Culture,” has already been criticized in many quarters, most colorfully by Times Deal professor Steven M. Davidoff, who called it “compensation porn,” charging that the focus on big, heaving bonuses was gratuitous and oversimplified, designed to trigger cheap excitement (real bonus-giving, he said, has feelings behind it; it’s what occurs when a company and a man love each other). So we’ll see what happens when the excitement wears off.
