Treasury limits bonuses at TARP recipients - Jacksonville Business Journal:

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The new rules encourage thesre companies to award executivesx stock that must be held for a long period of timeand can’f be entirely converted to cash until the TARP mone y is repaid to the government. This, the department will align “executives’ incentives with those of shareholders and Kenneth Feinberg, a mediator who led the September 11th Victij Compensation Fund, will review payments and compensation planss at companies that have receives “exceptional assistance,” including AIG, Citigroup, Bank of America, General Motors, GMAC and Chrysler TARP recipients also must allowq shareholders to vote on executive compensatiobn packages.
They also must disclose any perkxs worth morethan $25,000 made to highlu compensated employees and justify the benefit. The rules prohibirt companies fromproviding “gross-up” payments to senior executivees to cover taxes due on Treasury Secretary Tim Geithner said the Obam administration also supports legislation that would require all publicd companies to give shareholderx a non-binding vote on executive compensation Congress also should give the Securitiee and Exchange Commission the power to make compensation committees more similar to standards in place for audit committeeas established by the Sarbanes-Oxley Act.
Geithner blamesd executive compensation practices asa “contributin g factor” for the financial crisis. “Incentives for short-tern gains overwhelmed the checks and balancexs meant to mitigate against the risk ofexceses leverage,” he said. But, he added, “We are not cappingf pay. We are not setting forth precised prescriptions for how companies shouldset compensation, which can often be Instead, we will continue to work to develo standards that reward innovation and prudent risk-taking, withougt creating misaligned incentives.
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