At the risk of saying anything about health care reform (lest I be attacked by an angry Town Hall-roving mob), I had not really considered the connection that may exist between the debate over health care and the debate over executive compensation until I saw these letters sent out last week by Representative Henry Waxman (D-CA) and Representative Bart Stupak (D-MI). Representative Waxman is, of course, the Chairman of the House Committee on Energy and Commerce, and Representative Stupak is the Chairman of that Committee’s Subcommittee on Oversight and Investigations.
The letters request that 52 health insurers provide five years of essentially Summary Compensation Table data for each employee or officer who was compensated more than $500,000 in any one of those years, as well as five years of compensation data for the board of directors. The letters also seek, among other things, information about company-paid outside conferences, retreats or events, company financial performance, documents used by the compensation committee in developing or applying compensation plans, and details about the companies’ health care insurance products. Some of the information must be provided by September 4 and some by September 14.
A number of the insurers are public, while others are not (including, e.g., a number of Blue Cross/Blue Shield systems), but in any event developing the compensation data and the other requested information will likely be quite a chore. The letters from Waxman and Stupak follow a letter from Representative John Dingell (D-MI) and Representative Sander Levin (D-MI) to Blue Cross Blue Shield of Michigan asking about executive compensation and a series of rate hikes.
It is not yet clear how the compensation and other information will be used by the Committee in the course of its deliberations on health care policy, or whether this is just a political move designed to demonize the insurance industry through the perennial hot button issue, compensation. I think that I will keep my thoughts on that topic to myself.
Treasury Responds to TARP Criticisms
Recently, the Treasury released responses to recommendations made in the GAO’s June report on the TARP programs, as well as a handful of recommendations from prior reports. The Treasury’s responses indicate general progress on the development of TARP programs. The Treasury’s Office of Financial Stability has 194 full-time employees with a goal of reaching 225, internal controls have been put into place and it appears that efforts toward increasing the tracking of funds and the transparency with respect to recipients are beginning to pay off. But much still remains a work in progress; Treasury is still in the process of developing a risk assessment procedure for the programs, is continuing to renegotiate existing vendor conflict of interest mitigation plans and is considering ways in which to provide more information about the costs of TARP contracts and agreements. The Treasury will have more recommendations to respond to soon – the GAO is required to issue a report on Treasury’s operation of TARP every 60 days.
Former SEC Commissioner Paul Atkins Joins the Congressional Oversight Panel
Speaking of TARP accountability, it was announced last week that former SEC Commissioner Paul Atkins will join the Congressional Oversight Panel, which was set up to oversee the expenditure of TARP funds. The Chair of the Oversight Panel is Harvard Law Professor Elizabeth Warren. Atkins will fill a slot vacated by former Republican Senator John Sununu,
– Dave Lynn