By Sarah Borchersen-Keto, CCH Washington News Bureau, Contributing Author, the CCH Federal Banking Law Reporter.
Reworking roughly $180 million in guaranteed bonus contracts that come due at American International Group’s financial products division next year is a “top priority,” Special Master for TARP Executive Compensation Kenneth Feinberg told Congress October 28. “We will see what we can work out with AIG going forward in an effort to satisfy the statute, satisfy the regulations, satisfy the American people. And I view that as a top priority,” Feinberg told the House Oversight and Government Reform Committee.
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By Sarah Borchersen-Keto, CCH Washington News Bureau, Contributing Author, the CCH Federal Banking Law Reporter.
The Treasury Department and the Federal Reserve Board made dual announcements October 22 concerning efforts to curb executive compensation in the financial industry, marking an unprecedented move by the Obama administration to tackle what it sees as the problem of unchecked risk-taking promoted by excessive pay.
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This story appeared in Bank Digest.
Special Master for TARP Executive Compensation Kenneth R. Feinberg has released determinations on the compensation packages for the top executives at firms that received exceptional TARP assistance. The determinations were intended to: reform pay practices for top executives to align compensation with long-term value creation and financial stability; significantly reduce compensation across the board; require most of salaries to be paid in company stock held over the long term; require incentive compensation to be paid in the form of long-term restricted stock and to be contingent on performance and on TARP repayment; and require immediate reform of practices not aligned with shareholder and taxpayer interests. Treasury Secretary Tim Geithner said the determinations were “a commendable job of applying the strong compensation standards of the Congressional legislation to the companies that received exceptional assistance from the government.”
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