By Alan Zibel
Associated Press
Tuesday, April 15, 2008

The AFL-CIO said yesterday that "outrageous" pay packages for banking industry executives were partly to blame for the credit crisis, encouraging risky investment strategies that ended up hurting shareholders and consumers.

The labor federation, a major shareholder in public companies through union-sponsored pension funds, made the critique as it unveiled its 2008 "Executive PayWatch" portion of its Web site, which includes a compensation database.

Labor leaders want Congress to pass "say on pay" legislation giving shareholders a vote on executive compensation at major corporations. Such legislation passed the House last year but has stalled in the Senate. Union leaders see its chances improving next year under a new president.

About 100 companies -- including General Electric and Wal-Mart -- are to vote on "say on pay" proposals this spring. Last year, the average level of support for 51 such resolutions was 42 percent, according to RiskMetrics Group.

The union group's leaders argued that executive-pay packages are too often linked to short-term measures of performance, such as revenue growth, that can mask potentially catastrophic risks taken by a company.