Last year the Congress, Treasury and the Federal Reserve took unprecedented steps to shore up the financial industry.  With that came unprecedented government oversight.  Statutory limitations on executive compensation at companies receiving direct assistance were enacted.  Regulations have been released to expand the oversights to cover all compensation arrangements (not just executives) at nearly 7,000 banking organizations.  In the past, regulators have mandated bank governance to ensure safety and soundness only when organizations were in trouble.  Now the focus has changed to proactive and sweeping mandates. 

Creating and managing a principled compensation program that rewards desired behaviors and outcomes and offers market-driven compensation levels to attract and retain talent should be the responsibility of an organization not the federal government.  Federal mandates satisfy the needs of small thinkers to be consistent and treat all entities and all people the same.  This is the road to mediocrity, stagnation, malaise and eventual failure. 

The pendulum is swinging left.