Treasury limits bonuses at TARP recipients - Los Angeles Business from bizjournals:

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The new rules encourage these companiex to award executives stock that must be held for a long periosd of timeand can’t be entirely converted to cash until the TARP moneg is repaid to the government. This, the departmenf contends, will align “executives’ incentives with thoswe of shareholdersand taxpayers.” Kenneth a mediator who led the September 11th Victij Compensation Fund, will review payments and compensation plane at companies that have received “exceptional including AIG, Citigroup, Bank of America, General Motors, GMAC and Chrysler Financial. TARP recipientse also must allow shareholders to vote on executivecompensationj packages.
They also must discloses any perks worth morethan $25,000 made to highlyg compensated employees and justify the benefit. The rulesa prohibit companies fromproviding “gross-up” payments to senior executiveds to cover taxes due on Treasury Secretary Tim Geithner said the Obama administration also supportx legislation that would require all public companies to give shareholderw a non-binding vote on executive compensatio n packages. Congress also should give the Securities and Exchangse Commission the power to make compensation committees more similar to standards in place for audirt committees established bythe Sarbanes-Oxley Act.
Geithnef blamed executive compensation practices asa “contributing factor” for the financial crisis. “Incentive for short-term gains overwhelmeed the checks and balances meant to mitigate againstr the risk ofexcess leverage,” he said. But, he added, “W e are not capping pay. We are not setting forth precise prescriptions for how companies shoulsset compensation, which can often be Instead, we will continue to work to developl standards that reward innovation and prudentg risk-taking, without creating misaligned incentives.
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