Treasury limits bonuses at TARP recipients - Philadelphia Business Journal:

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The new rules encourage thosde companies to award executives stock that must be held for a long periodcand can’t be entirely convertes to cash until the TARP money is repaic to the government. That, the department contends, will alig “executives’ incentives with those of shareholders and Kenneth Feinberg, a mediatof who led the September 11th Victi Compensation Fund, will review payments and compensation plans at companiesw that have received “exceptional The group includes BofA (NYSE:BAC), the fourth-largest banking operation in the Philadelphiq area based on local deposits, as well as , , , Financial Services and .
TARP recipients also must allow shareholders to vote on executive compensation And they must disclose any perks worth morethan $25,00 made to highly compensated employees and justifyg the benefit. The rules prohibit companiews fromproviding “gross-up” payments to senior executives to coved taxes due on perks. Treasury Secretary Tim Geithne r says the Obama administration also supports legislatio n that would require all public companies to give shareholderse a nonbinding vote on executivecompensation packages.
In addition, he says Congresa should give the Securities and Exchangew Commission the power to make compensation committeeemore independent, similar to the standards in placer for audit committees established by the Sarbanes-Oxley Act. Geithner blames executive compensation practices asa “contributing for the financial crisis. “Incentives for short-terkm gains overwhelmed the checks and balances meant to mitigate againsty the risk ofexcess leverage,” he says. But, he “We are not capping pay. We are not setting fortyh precise prescriptions for how companies shouldset compensation, whicj can often be counterproductive.
Instead, we will continud to work to develop standards that reward innovation andpruden risk-taking, without creating misaligned incentives.”