After being confirmed by the Senate late last week, William Donaldson, the new Securities and Exchange Commission chairman, will probably not get the requisite honeymoon period accorded most newcomers when they step into a high-profile post.
Bill’s agenda and timetable will more closely resemble the commuter train schedules at Grand Central Terminal rather than someone easing into one of the most difficult regulatory posts in America.
He has promised, among a litany of other to-do items, to appoint a chairman of the Public company Accounting Oversight Board, the body created as a result of Sarbanes-Oxley. In my opinion, he should also mull revamping his communications team, but that’s more than enough fodder for a future column.
But one thing he won’t have to worry about is arbitrating the annual salaries of PCAOB members with lawmakers.
That, thankfully, has already been decided.
But first a little history.
At their first official meeting in January, members of the PCAOB voted themselves annual salaries of $452,000, with the chairman of the group slated to earn $560,000. (I now wonder why I’ve never been able to land a job where I can vote myself a salary).
Although that yearly compensation put the members on par with other financial standard-setters in an effort to attract the proverbial "best and brightest" to the board, that was too much for peripatetic Californian Barbara Boxer. The Democratic Senator felt that for the reformers to earn $52,000 more a year than the primary resident at 1600 Pennsylvania Ave. was, to put it bluntly, "ridiculous."
So she went about attaching an amendment to the 2003 Senate appropriations bill which capped the PCAOB member salaries at 400k. And to be fair, that’s roughly $175,000 more than Mr. Donaldson will earn as SEC chair.
Boxer's amendment was part of the Senate bill but not part of a competing measure by House lawmakers. Last week, the Senate okayed the House version, at least on the PCAOB salary issue.
What seems to be forgotten, at least by the Senator from the Golden State, was that one year ago this month, she teamed with fellow Democratic Senators Chris Dodd of Connecticut and John Corzine of New Jersey, to co-sponsor a bill proposing the formation of an oversight board — one that was eventually used as the model for the PCAOB.
The Boxer-Dodd-Corzine measure required members of the oversight board to be paid commensurate with the private sector. I doubt that any partner in a Big Four firm and even in the ones just below that level earn less than PCAOB members.
Regardless, the issue is decided. The board can finally get on with what’s they’re being paid to do.
Now it’s time to see if the board members are up to their salaries or if they’ll morph into just another high-profile example of government bloat.
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