White House Unveils New Executive Compensation Restrictions

By Henry J. Pulizzi

Amid populist outrage over Wall Street excess, U.S. President Barack Obama unveiled compensation rules for financial institutions that accept government assistance, saying it is "in bad taste" and bad strategy for banks to give executives lavish pay packages during an economic crisis.
The new rules also touch on firms that participate in "generally available capital access programs," such as the Treasury's Capital Purchase Program. Senior executives at those banks will be subject to the $500,000 compensation cap, though the cap can be waived after full public disclosure and a shareholder vote. Under current rules, the firms were required to review and certify that their top five executives' compensation arrangements did not encourage excessive and unnecessary risk-taking.
Obama also continued his push for the economic recovery package being considered by the Senate this week, warning that a failure to act quickly could "turn crisis into a catastrophe and guarantee a longer recession, a less robust recovery, and a more uncertain future."

Posted by Chaoran Hu

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