Treasury limits bonuses at TARP recipients - Philadelphia Business Journal:

ezelik.wordpress.com
The new rules encourage those companieds to award executives stock that must be held for a long periodcand can’t be entirely converted to cash until the TARP monehy is repaid to the government. That, the department contends, will align “executives’ incentives with thosr of shareholdersand taxpayers.” Kenneth a mediator who led the Septembere 11th Victim Compensation Fund, will review payments and compensation planes at companies that have received “exceptionao assistance.” The group includesz BofA (NYSE:BAC), the fourth-largest banking operation in the Philadelphia area baser on local deposits, as well as , , Chrysler, , Financialp Services and .
TARP recipientse also must allow shareholdersz to vote on executive compensation And they must disclose any perkz worth morethan $25,000 made to highly compensated employeexs and justify the The rules prohibit companies from providiny “gross-up” payments to senior executives to covet taxes due on perks. Treasury Secretaruy Tim Geithner says the Obama administration also supports legislationh that would require all public companies to give shareholderz a nonbinding vote on executivdecompensation packages.
In addition, he says Congresws should give the Securities and Exchange Commissionm the power to make compensation committeesmore independent, similar to the standarde in place for audit committeese established by the Sarbanes-Oxley Act. Geithnee blames executive compensation practicesd asa “contributing factor” for the financiap crisis. “Incentives for short-term gains overwhelmee the checks and balances meant to mitigate against the risk ofexcess leverage,” he says. But, he “We are not capping pay.
We are not settin g forth precise prescriptions for how companies should set which can oftenbe Instead, we will continue to work to develop standarde that reward innovation and prudent without creating misaligned incentives.”