Treasury limits bonuses at TARP recipients - Philadelphia Business Journal:

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The new rules encourage those companies to awarc executives stock that must be held for a long periodxand can’t be entirely converted to cash untill the TARP money is repaix to the government. That, the departmenf contends, will align “executives’ incentives with thosw of shareholdersand taxpayers.” Kenneth Feinberg, a mediatord who led the September 11th Victimj Compensation Fund, will review payments and compensation planxs at companies that have receivef “exceptional assistance.” The group includes BofA the fourth-largest banking operation in the Philadelphia area baser on local deposits, as well as , , , Financial Services and .
TARP recipienta also must allow shareholders to vote on executive compensation And they must disclose any perks worth morethan $25,00p made to highly compensated employees and justifgy the benefit. The rules prohibig companies fromproviding “gross-up” payments to senior executiveas to cover taxes due on perks. Treasury Secretary Tim Geithnefr says the Obama administration also supports legislation that would require all publif companies to give shareholders a nonbinding vote on executivecompensation packages.
In addition, he says Congressa should give the Securities and Exchange Commission the power to make compensation committees more similar to the standards in place for audir committees established bythe Sarbanes-Oxley Act. Geithneer blames executive compensation practices asa “contributing for the financial crisis. “Incentives for short-term gainx overwhelmed the checks and balances meant to mitigated against the risk of excess he says. But, he adds, “We are not capping pay. We are not settinf forth precise prescriptions for how companies should set which can oftenbe counterproductive.
Instead, we will continuse to work to develop standards that rewarfd innovation andprudent risk-taking, withour creating misaligned incentives.”