Ken Feignberg, The Special Master for Tarp Executive Compensation Concludes the Review of Prior Payments - 23 Jul 2010

Wow.  I almost missed this one....

TG-786: The Special Master for Tarp Executive Compensation Concludes the Review of Prior Payments "The Special Master for Tarp Executive Compensation Concludes the Review of Prior Payments

Today, the Special Master for TARP Executive Compensation, Kenneth R. Feinberg, announced the conclusion of his review of executive pay in late 2008 and early 2009.   The Special Master looked at payments that taxpayer-assisted firms made to "Top 25" executives prior to February 17, 2009, when the Recovery Act introduced additional compensation and corporate governance standards for TARP recipients, and directed a review of their executive pay before that date." http://bit.ly/bzJo9Z

HIGHLIGHTS:

The Special Master's review announced today:

1.      Completes Recovery Act mandate to review executive pay before tightening of standards

�         Covered the 419 firms that received taxpayer assistance prior to February 17, 2009

�         Payments from TARP recipients to "Top 25" executives after taxpayer funds provided

�         Special Master
directed to "seek to negotiate" a reimbursement to the government for a
payment determined to be "contrary to the public interest"

�         Statutory authority to review payments, but no authority to require reimbursement

2.      Focused
on highly compensated employees who received the type of payments later
restricted by the Recovery Act and Treasury regulations

�         Required
detailed submissions on executives who earn more than $500,000 per year,
and company certifications for those who earn less

�         240 companies had no executives over the threshold; 116 had five or fewer

�         Payments limited by subsequent standards: cash bonuses, retention awards, stock grants, golden parachutes and tax gross-ups

�         Of the $2.3 billion of payments analyzed, $1.7 billion in these categories

3.      Did  not determine that payments were contrary to the "public interest" requiring monetary reimbursement

�         Rules at the time allowed these kinds of payments

�         Payments largely from firms that have repaid the taxpayers

4.      Proposes firms adopt policies that provide compensation committees with special restructuring rights:

�         Compensation
committee would have authority to restructure, reduce or cancel payments
to executives--and not be bound by "guarantees"

�         Reaffirms important principles in the Wall Street Reform law and banking regulators' recent guidance on incentive compensation

�         Proposal made directly to 17 firms that paid $1.6 billion of the $1.7 billion (92%)

�         Entirely voluntary proposal--up to companies to adopt