A New Role for the Fed

The New York Times fronts a story on expectations that the Obama administration will call for increased oversight of executive pay (old news but with renewed urgency) as a prelude to the G-20 summit in April, Obama's first foreign summit. This week, the president will "seek a broad new role for the Federal Reserve to oversee large companies, including major hedge funds, whose problems could pose risks to the entire financial system," the paper says.

Besides requiring increased transparency, the Fed would make sure compensation is actually a measure of performance and aligns with "the financial interests of the company." The rules would apply to all financial institutions, not just those receiving TARP money. Taking a different angle, Bloomberg reports that the regulations to be announced next week will aim "at avoiding a repeat of the financial crisis," not at curbing executive pay.

Bloomberg also expands coverage from yesterday on Citigroup CEO Vikram Pandit's response to a potential 90 percent tax on bonuses given to certain employees to include reactions from the CEOs of Bank of America and JPMorgan. Bank of America CEO Kenneth Lewis sent a memo to employees that called the tax "unfair," while Jamie Dimon, chief executive at JPMorgan, held a conference call with 200 employees discussing concerns over retention.

"Banks, worried that the proposals are distracting employees, are trying to reassure staff and keep them focused on clients," the story says. Lewis warned the taxes could cause "unintended harm" and hamper recovery, while Dimon encouraged employees to call politicians and "voice their opinion," Bloomberg writes.

The Wall Street Journal tops its business coverage with news that Costco, Starbucks, and Whole Foods Market announced yesterday an alliance in the form of the "Committee for a Level Playing Field for Union Elections," which will work to pass a labor law and "bridge the stark divide between business and labor." In a departure from the rest of the business community, the three reputably employee-friendly companies will not support two contentious provisions in the Employee Free Choice Act that would ease the process for unions to enroll workers and would introduce binding arbitration to resolve first contracts after about four months if negotiations failed.

Instead, the CEOs of the companies will be backing six principals that would "level the playing field for union organizers." Those against the proposals, in particular one that would set a fixed time limit for union elections, include the National Federation of Independent Business, which has dropped millions of dollars to defeat the bill, and the Coalition for a Democratic Workplace. Both of the organizations say the provisions will hurt small-business owners and don't represent the priorities of the majority of businesses.  

Continuing the never-ending flow of Madoff coverage, the WSJ sits down with William Nasi, an army fatigue-wearing 60-year-old who worked as Bernard Madoff's personal page for at least part of the quarter century he was employed by the firm. Nasi provides fascinating insights into what it was like to work at the center of Madoff's operations. In addition to the obvious—it was odd that I was never asked to bring back a receipt, he was really jumpy when he dealt with regulators—Nasi reveals that Madoff was a workaholic and clean freak.

"I would open the office at 7:30 a.m. and sometimes I would see Bernie in there, vacuuming the floors, personally," Nasi told the paper. Another time, Nasi opened the office in the morning to overhear Madoff yelling into the phone at his brother, Peter, "Until your name is on that door you keep your f---king mouth shut."