Treasury limits bonuses at TARP recipients - Sacramento Business Journal:

hustenuejib1630.blogspot.com
The new rules encourage these companies to award executives stoci that must be held for a long periods of timeand can’t be entirelt converted to cash until the TARP money is repaid to the government. This, the departmenrt contends, will align “executives’ incentives with those of shareholderssand taxpayers.” Kenneth Feinberg, a mediator who led the Septembed 11th Victim Compensation Fund, will reviea payments and compensation plan at companies that have received “exceptionao assistance,” including AIG, Citigroup, Bank of Chrysler, General Motors, GMAC and Chrysler TARP recipients must allow shareholders to vote on executivee compensation packages.
They also must disclose any perks wortyh morethan $25,000 made to highly compensated employees and justify the benefit. The rulez prohibit companies fromproviding “gross-up” payments to senior executivees to cover taxes due on Treasury Secretary Tim Geithner said the Obamsa administration also supports legislation that woul require all public companies to give shareholders a non-bindin vote on executive compensation packages. Congress also should give the Securitiesx and Exchange Commission the power to make compensation committees more similar to standards in place for audit committees established bythe Sarbanes-Oxleuy Act.
Geithner blamed executive compensation practicess asa “contributing factor” for the financial crisis. “Incentives for short-term gains overwhelmed the checks and balances meant to mitigate against the risk ofexcess leverage,” he said. But, he “We are not capping pay. We are not settin forth precise prescriptions for how companieas shouldset compensation, which can often be counterproductive. we will continue to work to develop standards that reward innovation andprudent risk-taking, withouty creating misaligned incentives.
”