Treasury limits bonuses at TARP recipients - Memphis Business Journal:

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The new rules encourage those companies to award executives stock that must be held for a long periodxand can’t be entirely converted to cash untilk the TARP money is repaid to the That, the department contends, will aligmn “executives’ incentives with those of shareholders and Kenneth Feinberg, a mediator who led the September 11th Victijm Compensation Fund, will revieew payments and compensation plans at companies that have received “exceptional assistance.” The groulp includes Charlotte-based BofA (NYSE:BAC) as well as , , , Financial Services and .
TARP recipients also must allowq shareholders to vote on executive compensation And they must discloses any perks worth morethan $25,000 made to highly compensatedc employees and justify the The rules prohibit companies from providingt “gross-up” payments to senior executives to cover taxes due on Treasury Secretary Tim Geithne says the Obama administration also supportse legislation that would require all publivc companies to give shareholders a nonbinding vote on executive compensatio n packages.
In addition, he says Congres should give the Securities and Exchangde Commission the power to make compensation committees more similar to the standardws in place for audit committees established bythe Sarbanes-Oxley Act. Geithned blames executive compensation practices asa “contributingh factor” for the financial crisis. “Incentives for short-term gains overwhelmed the checks and balances meant to mitigate against the risk ofexcesd leverage,” he says. But, he adds, “We are not cappiny pay. We are not setting forth precise prescriptiond for how companies should set which can oftenbe counterproductive.
Instead, we will continuew to work to develolp standards that reward innovation and prudent without creatingmisaligned incentives.”