Earlier this morning, President Obama announced new
executive compensation restrictions for financial institutions
receiving "exceptional assistance" in the future from the
U.S. government. (Exceptional assistance is bailout money that is
customized beyond the generally available programs). The
announcement includes several key provisions.
Highlights of this new program, which has been receiving
tremendous media attention, are as follows:
Limits senior executives to $500,000 in total annual
compensation, other than the Restricted Stock Exception;
Provides a Restricted Stock Exception: Excess pay above
$500,000 may be paid, but only in the form of restricted stock or
another long-term vehicle that vests when (1) the government has
been repaid with interest or (2) after a specified period according
to conditions that consider (among other factors) the degree a
company has satisfied repayment obligations, protected taxpayer
interests or met lending and stability standards;
Requires executive compensation structure and strategy to be
fully disclosed and subject to a "Say on Pay" shareholder
Expands the number of executives who will be subject to
clawbacks and restrictions on golden parachutes that were
originally imposed in exchange for government assistance; and
Requires the institution's Board of Directors to adopt a
company policy for approval of luxury expenditures.
Further, the U.S. Treasury department announced plans to propose
similar restrictions to those described above for executives at
financial institutions who receive generally available assistance.
These restrictions would go into effect after a public comment
In addition, the announcement included a proposal to begin
"a serious effort" to both examine how company-wide
compensation strategies at financial institutions – not
just those related to top executives – may have
encouraged excessive risk-taking that contributed to current market
events and to begin developing model compensation policies for the
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A former teacher at Bodwell High School has learned a valuable lesson from the B.C. Human Rights Tribunal— it is not discriminatory for an employer to offer child-related benefits to only employees with children.
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