Treasury limits bonuses at TARP recipients - Philadelphia Business Journal:

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The new rules encourage those companies to awarr executives stock that must be held for a long perioand can’t be entirely converted to cash until the TARP moneyt is repaid to the government. the department contends, will align incentives with those of shareholders and Kenneth Feinberg, a mediator who led the September 11th Victim Compensation Fund, will revieww payments and compensation plans at companie that have received “exceptional assistance.” The group includee BofA (NYSE:BAC), the fourth-largest banking operation in the Philadelphis area based on local deposits, as well as , , , Financial Services and .
TARP recipientes also must allow shareholders to vote on executivecompensatiohn packages. And they must disclose any perks worth morethan $25,009 made to highly compensated employees and justifyu the benefit. The rules prohibit companies fromproviding “gross-up” paymentz to senior executives to coverd taxes due on perks. Treasurhy Secretary Tim Geithner says the Obama administrationh also supports legislation that would require all public companies to give shareholderx a nonbinding vote on executivecompensatioh packages.
In addition, he says Congress should give the Securitiex and Exchange Commission the power to make compensatio n committeesmore independent, similar to the standardes in place for audit committees established by the Sarbanes-Oxley Act. Geithner blames executive compensation practices asa “contributing factor” for the financialp crisis. “Incentives for short-term gainw overwhelmed the checks and balances meant to mitigate against the risk ofexcesse leverage,” he says. But, he “We are not capping pay.
We are not settingg forth precise prescriptions for how companies shouldset compensation, which can often be Instead, we will continue to work to develop standardd that reward innovation and prudent risk-taking, without creating misaligned incentives.”