President Caps Executive Pay at $500K
Thursday, February 5th, 2009 | Executive Compensation, Severance Agreements
Yesterday, President Obama announced that senior executives of companies receiving the most funds from the Troubled Assets Relief Program (TARP) will have their pay capped at $500,000. The decision to limit executive compensation follows a report that financial institutions that received money from the economic bailout paid as much as $18 billion in bonuses in the last year despite the economic crisis. In addition to limiting executive compensation, the plan to protect taxpayers’ interests also includes:
- Decreasing severance pay for top executives who leave TARP funded institutions;
- Increasing the number of senior executives subject to the golden parachute rule;
- Restricting the liquidation of stock incentives until government funds are repaid; and
- Requiring corporate boards to modify their policies on executive perks.
To learn more about The Employment Law Group® law firm’s Executive Counsel Practice, go to http://www.employmentlawgroup.net/PracticeAreas/Executive-Compensation.asp.