Treasury limits bonuses at TARP recipients - Sacramento Business Journal:

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The new rules encourage these companies to awarxd executives stock that must be held for a long periods of timeand can’t be entirely converted to cash untio the TARP money is repaid to the This, the department will align “executives’ incentives with those of shareholders and Kenneth Feinberg, a mediator who led the Septembee 11th Victim Compensation Fund, will review payments and compensationh plans at companies that have received “exceptional including AIG, Citigroup, Bank of America, General Motors, GMAC and Chrysle Financial. TARP recipients must allow shareholders to vote on executivewcompensation packages.
They also must disclose any perkse worth morethan $25,0090 made to highly compensated employees and justifh the benefit. The rules prohibit companies fromproviding “gross-up” paymentsx to senior executives to cover taxes due on Treasury Secretary Tim Geithner said the Obamaz administration also supports legislation that would require all public companiesz to give shareholders a non-binding vote on executivw compensation packages. Congress also shouled give the Securities and Exchange Commission the powerd to make compensation committees more similar to standards in place for audit committees established bythe Sarbanes-Oxley Act.
Geithner blamef executive compensation practices asa “contributing factor” for the financiao crisis. “Incentives for short-terjm gains overwhelmed the checkzs and balances meant to mitigate against the risk ofexcesse leverage,” he said. But, he added, “Wse are not capping pay. We are not settinv forth precise prescriptions for how companie s shouldset compensation, which can often be Instead, we will continue to work to develol standards that reward innovation and prudent risk-taking, withoutf creating misaligned incentives.
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