Editor's note: Barack Obama will be sworn in as the 44th president of the United States later Tuesday. After his election in November, TheStreet.com wrote a series of articles about how his administration could affect Wall Street. This article was originally published Nov. 7.
Democrat Barack Obama's election to the White House may be the final push needed to rein in over-the-top CEO salaries.
At first blush, the president-elect seems to endorse the idea of curbing excessive pay. Obama in March called for a "shift in cultures of our financial institutions and our regulatory agencies" in a speech at Cooper Union in New York. Among the changes Obama advocated was "to realign incentives and the compensation packages so that both high-level executives and employees better serve the interests of shareholders," according to a transcript of the speech.
Photo gallery: Obama Takes Office)
"The environment is certainly ripe to push for more meaningful reform," says Michael Garland, the director of value strategy at activist pension fund investor CtW Investment Group. "People are disgusted not only by the level of pay, but also by the perverse incentives that our current pay system has fostered."
Both Obama and Republican John McCain had made noise on the campaign trail about the need to rein in executive pay, but Obama's rang more true to some advocates of the issue.
Any major limits put on executive compensation would not be in line with McCain's core constituency "which is big business," says Richard Ferlauto, the director of corporate governance and pension investment at the American Federation of State, County and Municipal Employees, or AFSCME. In contrast, Obama "expanded the grassroots base of the Democratic party by bringing in new constituencies. So reforming CEO pay emerges really as a symbol for a government that believes that the country needs to serve
as well as Wall Street."