CHICAGO Republican presidential candidate John McCain has spoken out about lavish pay packages for corporate chiefs, but his top adviser said on Monday the senator wants to shine a light on the issue and is not offering specific new proposals to rein it in.
"Job No. 1 of the president is to use the bully pulpit to shine a light on behavior that is less-than-exemplary," McCain's top economic adviser Douglas Holtz-Eakin told Reuters in a telephone interview.
"That's certainly the case here," Holtz-Eakin said, referring to the issue of huge chief executive officer pay packages.
Holtz-Eakin said McCain would like to see shareholders and boards of directors take the initiative to ensure that pay packages for CEOs are reasonable and in line with performance. "We'll see what the response is," he said.
Lawmakers have expressed outrage over huge pay for executives at firms that were leading players in the subprime mortgage lending crisis, such as Bear Stearns Cos Inc and Countrywide Financial Corp.
McCain added his voice to those expressing concern about the vast compensation earned by the executives of those companies at a time when their firms performed disastrously and most shareholders lost millions of dollars.
The disparity comes at a time when the ripple effects of the home mortgage crisis are leading to financial ruin for some middle and lower-income families unable to pay their mortgages.
"I think it is outrageous when someone who is the head of Bear Stearns cashes in millions and millions of dollars in stocks," McCain told reporters in Arizona on Saturday. "I think it is unconscionable when the guy who is the head of Countrywide and his co-conspirators make huge amounts of money when Americans face the threat of losing their homes.
"If there's ways we can motivate shareholders and boards of directors to punish these people we should do it," the Arizona Republican said. "If there's ways we can prevent this from happening again, we should exercise those options."
As the presumptive Republican nominee, McCain will run in November against either Sen. Barack Obama, an Illinois Democrat, or Sen. Hillary Clinton, a New York Democrat.
Obama, who leads Clinton in the delegate count, introduced "say-on-pay" legislation in the Senate last year to give investors more influence on the pay packages of executives.
Clinton supports the Senate bill. She has called the multimillion-dollar pay packages offensive and wants to eliminate tax breaks enjoyed by some Wall Street money managers.
Obama's aides have said that if the say-on-pay bill is not enacted into law this year, he would champion it as president.
In a speech last week to the AFL-CIO, Obama cited Countrywide as an example of a U.S. financial system that he said is in need of overhaul.
"There was this news story about the top two executives at Countrywide Financial, a company that's as responsible as any firm for the housing crisis we're facing today," Obama said in the speech in Philadelphia. "And what we learned is that when Countrywide was sold a few months ago, these two executives got a combined $19 million."
"So millions of Americans are facing foreclosure. Our economy is in turmoil. And the guys behind it all are getting bonuses for their bad behavior," the Illinois senator said.
(To read more about the U.S. political campaign, visit Reuters "Tales from the Trail: 2008" online at blogs.reuters.com/trail08/)