House Passes New Bill with More Restrictions on Executive Pay
Wednesday, April 8th, 2009 | Executive Compensation, Federal Legislation
The House has approved H.R. 1664, the Pay for Performance Act of 2009, to restrict executive compensation at companies that have received funds from the Troubled Assets Relief Program (TARP). The decision to impose additional limitations on executive payouts follows a massive public outcry about the $165 million that American International Group, a recipient of nearly $200 billion in bailout funds, has issued in payouts to its executives in the last month. The bill, which amends the executive compensation provisions of the Emergency Economic Stabilization Act of 2008, would bar recipients of TARP funds from paying any bonus that is “unreasonable or excessive” or that is not “directly based on performance-based measures.” The bill also calls for financial institutions subject to the new compensation requirements to submit an annual report to the Treasury Secretary stating how many executives received or will receive total compensation above specified dollar amounts during the fiscal year. To learn more about The Employment Law Group® law firm’s Executive Counsel Practice, go to http://www.employmentlawgroup.net/PracticeAreas/Executive-Compensation.asp.