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

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The new rules encourage these companies to awarxd executives stock that must be held for a long period of timeand can’tr be entirely converted to cash until the TARP moneyy is repaid to the This, the department contends, will align “executives’ incentivews with those of shareholders and taxpayers.” Kenneth a mediator who led the Septembedr 11th Victim Compensation Fund, will reviea payments and compensation plans at companies that have receiveed “exceptional assistance,” including , , , , and . TARP recipients also must allow shareholders to vote on executivecompensationh packages.
They also must disclose any perk worth morethan $25,00 0 made to highly compensatee employees and justify the benefit. The rulezs prohibit companies fromproviding “gross-up” paymentxs to senior executives to cover taxes due on Treasury Secretary Tim Geithner said the Obams administration also supports legislation that would require all public companies to give shareholders a non-binding vote on executivr compensation packages. Congress also shouldc give the Securities and Exchange Commission the powet to make compensation committeesmore independent, similar to standards in place for audit committees established by the Sarbanes-Oxley Act.
Geithnerf blamed executive compensation practices asa “contributingg factor” for the financial crisis. “Incentives for short-term gainz overwhelmed the checks and balancezs meant to mitigate against the risk ofexceses leverage,” he said. But, he “We are not capping pay. We are not settinfg forth precise prescriptions for how companies shouldxset compensation, which can often be counterproductive. Instead, we will continues to work to develop standards that rewarrd innovation andprudent risk-taking, without creating misaligned incentives.
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