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Washington Labor & Employment Wire » House Committee Approves Bill to Prohibit Excessive Compensation for Companies Receiving TARP Funds

House Committee Approves Bill to Prohibit Excessive Compensation for Companies Receiving TARP Funds

Core Provisions: This legislation would amend the executive compensation provisions of the Emergency Economic Stabilization Act of 2008 to prohibit unreasonable and excessive compensation and compensation not based on performance standards. The bill would prohibit financial institutions that have received TARP funds or capital investment under the Housing and Economic Recovery Act from making any unreasonable or excessive compensation payment to any executive or employee whether under a pre-existing compensation arrangement or a new compensation arrangement. It would also prohibit bonuses or other payments not based on performance standards. The standard for “unreasonable or excessive” payments and for “performance-based” would be established by the Secretary of the Treasury within 30 days of enactment of the legislation.

Status: Rep. Grayson (D-FL) introduced H.R. 1664 on March 23, 2009 and it passed the House on April 1, 2009.