As expected, Jim Webb's self-congratulatory speech with empty rhetoric has been praised by the media. However, as liberal Newsweek journalist Jonathan Alter points out in an otherwise praiseworthy evaluation of Webb's speech:

"The problem with the populist theme is that Democrats have no real remedies for the effects of globalization on the middle class. And they are not yet entirely clear on what should be done in Iraq."

As someone who has researched executive compensation, I can tell you that most government involvement to curb the practice has backfired in the past and may do so in the future. The government in the 1990's was concerned about rising executive executive compensation, especially in cases where the managers were generously compensated but thought to have done a lousy job and stock price had not performed up to expectations. As such, the government gave tax incentives to issuing stock options as stock options were thought to be a good way to condition compensation based on company performance (also known as pay-per-performance). An additional incentive was the expense sheet benefits (stock options didn't hve to be expensed). Just on a side note, when the SEC advocated for expensing these options, Silicon Valley and their advocates like Nancy Pelosi (that champion of the working man:)) successfully fought against it on the grounds that stock options were impossible to value.

The granting of stock options as compensation, far from curbing executive compensation actually exacerbated it. At a recent Senate Hearing, SEC Chairman Christopher Cox stated, "[a]s a Member of Congress at the time, I remember the stated purpose was to control the rate of growth in CEO pay. With complete hindsight, we can now all agree that this purpose was not achieved. Indeed, this tax-law change deserves pride of place in the Museum of Unintended Consequences".

The best way to curtail executive compensation is through disclosure, which SOX has already addressed (although it can be quite costly and there has to be a cost/benefit analysis) and through shareholders. For the most part, government can do very little additionally to curb executive compensation without significantly hurting the private sector and the stock market.

If Senator Webb has any additional ideas, he should state what they are. Until then, he should keep quiet and avoid making platitudes. Most people recognize that there is some egregious compensation but recognizing the problem and being able to craft a workable solution are two different matters.