As elected officials look to reduce federal spending, executive compensation within federal contractors has again come under scrutiny. For this year, the ceiling that the government will reimburse towards an executive’s compensation is $763,000.

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Senators Barbara Boxer and Charles Grassley have introduced a bill that limits this amount to the president’s salary of $400,000. The Administration wants to lower the ceiling further to $200,000.

However, Stan Soloway, president of the Professional Services Council, argues in both Politico and in the Washington Business Journal that capping executive compensation will hurt a contractor’s ability to attract the best talent to the most challenging government programs.

Susan Eggleston, a vice president at research firm Deltek writes in Capital Business, that the Boxer/Grassley bill could further erode the thin profit margins of contractors.

Executive compensation may be an easy target, but capping them may lead to unintended challenges.

Of course, you can find links to these stories on WJLA.com/biggov.

I’m Steve Vito of UpsonVito.

About Federal Hot Minute: Federal Hot Minute is a roundup of stores on the business of government. Federal Hot Minute also airs on ABC7 inside Washington Business Report on Sundays at 9:30 a.m. and 11:00 p.m. The segment also airs on NewsChannel 8 on Mondays in the 6 a.m, 10 a.m. and 8 p.m. programming.

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Stories mentioned in Federal Hot Minute:

Contractor pay cap is penny-wise, pound foolish - Politico

Deltek: Contractors should stay aware of compensation cap proposals – Washington Post

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Top federal contractors get 10 percent raise –Washington Post

Compensation Caps: Recipes for Disaster – Washington Business Journal

NY proposes $199K salary cap for state contractors – Business Week

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