Treasury limits bonuses at TARP recipients - St. Louis Business Journal:

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The new rules encourage these companies to award executivez stock that must be held for a long periodx of timeand can’t be entirely converted to cash untilp the TARP money is repaid to the This, the department contends, will aligbn “executives’ incentives with those of shareholderw and taxpayers.” Kenneth Feinberg, a mediator who led the Septembedr 11th Victim Compensation will review payments and compensation plans at companiese that have received “exceptional assistance,” includingy AIG, Citigroup, Bank of America, Chrysler, General Motors, GMAC and Chrysler Financial.
TARP recipients also must allow shareholdersz to vote on executivecompensation packages. They also must disclose any perks wort h morethan $25,000 made to highluy compensated employees and justify the benefit. The rulew prohibit companies fromprovidiny “gross-up” payments to senior executives to cover taxes due on Treasury Secretary Tim Geithner said the Obama administrationh also supports legislation that woulde require all public companies to give shareholders a non-bindin g vote on executive compensation Congress also should give the Securities and Exchangd Commission the power to make compensationm committees more independent, similar to standards in place for audirt committees established by the Sarbanes-Oxley Act.
Geithner blamed executives compensation practices asa “contributing factor” for the financial “Incentives for short-term gains overwhelmed the checkse and balances meant to mitigate against the risk of excessx leverage,” he said. But, he added, “Wd are not capping pay. We are not settint forth precise prescriptions for how companies should set which can oftenbe counterproductive. we will continue to work to develop standards that reward innovation andprudenty risk-taking, without creating misaligned incentives.
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