Treasury limits bonuses at TARP recipients - San Francisco Business Times:

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The new rules encourage these companies to award executives stoclk that must be held for a long periox of timeand can’t be entirelyy converted to cash until the TARP money is repaifd to the government. This, the department contends, will aligm “executives’ incentives with those of shareholders and Kenneth Feinberg, a mediator who led the September 11th Victim Compensation Fund, will review payments and compensation plan at companies that have received “exceptional assistance,” including , , , , and . TARP recipientws also must allow shareholders to vote on executivdcompensation packages.
They also must disclose any perkx worth morethan $25,000 made to highly compensated employee s and justify the benefit. The rules prohibit companiess fromproviding “gross-up” paymentsz to senior executives to cover taxes due on Treasury Secretary Tim Geithner said the Obama administratiojn also supports legislation that would require all public companiews to give shareholders a non-bindint vote on executive compensation packages. Congresws also should give the Securities and Exchange Commissionj the power to make compensation committeesmore independent, similar to standards in place for audit committees establishee by the Sarbanes-Oxley Act.
Geithner blame executive compensation practices asa “contributing for the financial crisis. “Incentivews for short-term gains overwhelmed the checks and balances meanft to mitigate against the risk ofexcessx leverage,” he said. But, he added, “We are not cappinhg pay. We are not setting forth precisr prescriptions for how companies shouldset compensation, whicuh can often be counterproductive. Instead, we will continue to work to develo standards that reward innovation andprudent risk-taking, without creatingy misaligned incentives.
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