Barney Frank gets mad, again

The Congressman loses his temper on CNBC while explaining his position on limiting executive compensation


Andrew Leonard
June 11, 2009 9:35PM (UTC)

Taegan Goddard tells us that Barney Frank lost his temper "during a rather heated CNBC interview" on the topic of executive compensation. Well, kind of.

At the very end of a five minute segment Frank appeared to misunderstand the point one of his CNBC questioners was making, got upset, and ended the interview.

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But before that, he delivered substantive explanation of his views on how the government should be involved in limiting executive compensation. He made three points.

1) For corporations receiving TARP money, the government has not just the right, but the responsibility to ensure that taxpayer dollars aren't being wasted on exorbitant salaries and bonus payments. I think most Americans would be in agreement.

2) Shareholders should have more influence on compensation issues. While some critics wonder what tangible effect a non-binding "say-on-pay" shareholder vote could possibly have on executive salaries, it still makes some sense to attempt to strengthen market-based mechanisms for limiting out-of-control compensation, and increasing shareholder input seems like one reasonable approach.

3) Wall Street compensation systems that "over-incentivize" risk taking need to be reined in. How this is achieved is tricky. Does the Treasury simply issue guidelines, or pursue a more heavy-handed regulatory approach? But there seems little question that the status quo gave us a clear example of market failure.

All cogently delivered by Frank, with a little pushback from his questioners, but nothing that could be described as heated. Until the very end, when one CNBC anchor tried to make a technical point that the idea of a "shareholder" has become confused through the intermediation of mutual funds and other institutional investors. Frank appeared to misunderstand the point being made, but when the questioner tried to explain himself, Frank complained about being interrupted, and then the questioner complained about being misinterpreted, and both men start shouting over each other, and then Frank walked off in a huff.

A great moment in journalism? Not quite. But if you want a quick and dirty summary of how a Democratic Congress plans to approach compensation issues, with a flare up at the end, it's worth a look.

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Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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