The executive-compensation debate continued on Thursday, and Cramer during Stop Trading! reiterated his take on the issue.
“The government has every single right,” he said, “to demand that people at these banks don’t do as well until they return the money.”
The Treasury Department plans to cut the 2009 pay of the 25 top-earning executives at Bank of America , AIG , Citigroup , General Motors, GMAC , Chrysler and Chrysler Financial, the seven companies that received the most federal aid. Senator Chuck Schumer, D-N.Y., chimed in today, saying he supports the measure.
Schumer introduced legislation in May that called for an advisory shareholder vote on executive compensation. While Cramer supports the idea, he said public companies’ compensation committees are even more important. Too often, though, they’re staffed by part-time employees whose recommendations are drowned out by hired pay consultants. Cramer called on these comp committees to “stand up to management.”
“Thoughtful people who run compensation committees,” he said, “will make a bigger difference than what Senator Schumer wants.”
Elsewhere in the market, the action in stocks is “very mixed,” Cramer said. 3M is up while Nucor is down, even though the companies need a strong economy to do well. At the same time, McDonald’s , which does well during a recession, is also higher today.
Still, there is a “gloom-busting element” happening that Cramer likes: Stocks aren’t hostage to oil, which was down on Thursday. Also, there seems to be little chatter about hedge-fund scandals, most notably the troubles at Galleon Group. Though Cramer said to watch for possible news of arrests in Silicon Valley.
“That could be the next shoe to drop,” he said.
Cramer's charitable trust owns Bank of America.
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