More than at any time in a decade, official Washington is focused on how to curb the gilded pay packages of corporate executives. The problem: It's not easy to legislate a pay cut for some of America's most powerful people.
It's clear that the issue has gained traction this month, thanks to public concern about income inequality, investor outrage over pay at companies such as The Home Depot, and the politics of a new Democratic Congress.
The recent signs include:
•As part of a minimum-wage hike under consideration in the US Senate, new taxes would be imposed on one important form of executive pay.
•Rep. Barney Frank (D) of Massachusetts, who chairs the House Financial Services Committee, plans to introduce a bill to require public companies to put their executive compensation plans before shareholders for an annual vote.
•On Wednesday, President Bush used a podium on Wall Street to admonish corporate boards. "You need to pay attention," to see that top-level pay is tied to good performance, he said.
But this doesn't mean action regarding CEO pay will be easy or effective.
"It's going to be extremely difficult to limit in any manner or form," says Howard Silverblatt, an analyst at Standard & Poor's in New York.
The last time Congress tried, the effort backfired. A $1 million cap on salaries enacted in 1993 helped fuel a surge in non-salary pay – namely stock options – pushing total compensation for CEOs toward a record as the stock market peaked in 2000.
And some experts see evidence that disclosure rules, intended to empower corporate directors and shareholder watchdogs, tend to push pay up, as executives look over their shoulders and expect rewards similar to their peers.
This doesn't mean federal laws can't ever restrain executive compensation. But to many experts, the constituencies in the best position to hold pay in check are investors – who have the most to gain or lose from poor pay practices.