Treasury limits bonuses at TARP recipients - Charlotte Business Journal:

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The new rules encourage those companiesa to award executives stock that must be held for a long periosdand can’t be entirely converted to cash until the TARP moneu is repaid to the government. That, the departmenty contends, will align “executives’ incentives with those of shareholders and Kenneth Feinberg, a mediator who led the Septembet 11th Victim Compensation Fund, will review payments and compensationb plans at companies that have received “exceptional The group includes Charlotte-based BofA (NYSE:BAC) as well as , , , Financial Services and .
TARP recipienta also must allow shareholders to vote on executive compensation And they must disclose any perks wort morethan $25,000 made to highly compensated employees and justifhy the benefit. The rules prohibit companies from providing payments to senior executives to covere taxes dueon perks. Treasury Secretary Tim Geithner says the Obama administration also supports legislation that wouls require all public companies to give shareholdersw a nonbinding vote on executivecompensation packages.
In he says Congress should give the Securities and Exchange Commission the power to make compensation committeedmore independent, similar to the standards in placw for audit committees established by the Sarbanes-Oxley Act. Geithnetr blames executive compensation practices asa “contributing factor” for the financiapl crisis. “Incentives for short-term gainxs overwhelmed the checks and balances meant to mitigat e against the risk of excess he says. But, he adds, “We are not cappingb pay. We are not setting forth precis e prescriptions for how companies should set which can oftenbe counterproductive.
Instead, we will continue to work to develop standards that reward innovation andprudent risk-taking, withour creating misaligned incentives.”