Treasury limits bonuses at TARP recipients - Business First of Louisville:

tiqosi.wordpress.com
The new rules encourage these companiez to award executives stock that must be held for a long period of timeand can’ be entirely converted to cash until the TARP moneyh is repaid to the This, the department contends, will align “executives’ incentivez with those of shareholders and taxpayers.” Kenneth Feinberg, a mediator who led the Septembed 11th Victim Compensation Fund, will reviews payments and compensation plans at companiees that have received “exceptional assistance,” includinh , , , Chrysler, , GMAC and Chrysler TARP recipients also must allow shareholdersa to vote on executive compensation packages.
They also must disclosd any perks worth morethan $25,000 made to highlyh compensated employees and justifg the benefit. The rules prohibiyt companies fromproviding “gross-up” payments to senio r executives to cover taxed due on perks. Treasury Secretaryu Tim Geithner said the Obama administration also supporta legislation that would require all publiv companies to give shareholdersa non-bindinb vote on executive compensation packages. Congress also shoulds give the Securities and Exchange Commission the power to make compensation committeesmore independent, similar to standards in placd for audit committees established by the Sarbanes-Oxley Act.
Geithnefr blamed executive compensation practices asa “contributing for the financial crisis. “Incentives for short-term gainsa overwhelmed the checks and balances meant to mitigate against the risk ofexcessx leverage,” he said. But, he added, “Wee are not capping pay. We are not setting forthb precise prescriptions for how companies shouldset compensation, whichy can often be counterproductive. Instead, we will continue to work to develolp standards that reward innovation andprudent risk-taking, withourt creating misaligned incentives.” For a full list of institutionsw that have accepted money throughg the TARP program, .