Charity Leaders Should Pay Close Attention to Obama's Pay Guidelines

The guidelines are intended to assure that taxpayers are not in the awkward position of “rewarding” executives of failing organizations. They are not, however, intended to apply to other publicly traded corporations, much less to tax-exempt organizations.

But it is important to note that the president said the guidelines would be part of “long-term effort” to figure out how executive compensation structures have contributed to the current financial mess, and how corporate governance and compensation rules can be changed for the better. From that perspective, the guidelines would open the door to a broader governmental consideration of executive compensation structures and their relationship to tax revenue.
In essence, the federal bailout plan has let the genie out of the bottle by introducing into mainstream discourse topics, such as caps on executive compensation, that were previously considered too extreme to be seriously considered. The age-old lesson, of course, is that once released, the genie can never be put back in.