How to Succeed in Regulating Business

If you think executives who drive their companies to the brink of ruin don't deserve lavish bonuses, you probably feel pretty good right now. After all, the current storm of public outrage against executive excess--whose signature moment was the tongue-lashing Representative Barney Frank bestowed on the titans of finance who appeared before his congressional committee last month--has finally resulted in real legislative action on pay-for-performance. The stimulus law signed by President Obama imposes stringent limitations on the compensation of bank executives whose companies receive TARP funds, restricting the bonuses of executives and banning their use of golden parachutes. But don't break out the champagne just yet. In the struggle over executive pay, CEOs have lost a few battles lately. But these losses are likely to prove fleeting.