House of Representatives Passes Executive Pay Limits

Today the House of Representatives passed legislation, which if enacted into law, would require publicly traded companies to hold an annual shareholder "nonbinding, advisory vote" on executive compensation, according today's House Financial Services Committee press release.  Additionally, it would require publicly traded companies' compensation committees to be made up of independent directors, also according to today's press release. 
 
The bill, the Corporate and Financial Institution Compensation Fairness Act (H.R. 3269), would require financial institutions with more than $1 billion in assets to "disclose compensation structures that include incentive-based elements," as described in both the bill's summary and today's press release.
 
Click here for the bill's summary, and click here for the press release.

Executive Compensation and Corporate Governance Interim Final Rule for Issued

The Treasury Department published an Interim Final Rule providing further guidance on the executive compensation and corporate governance provisions applicable to financial institutions from which the Treasury is purchasing troubled assets through direct purchases.  The interim final rule provides one technical amendment and two clarifications to the Interim Final Rule issued in October and provides reporting and recordkeeping requirements related to the executive compensation and corporate governance provisions.  The Interim Final Rule now includes requirements of annual certifications from the CEO that the financial institution and its compensation committee have complied with the new and existing TARP executive compensation rules and that the compensation committee has reviewed senior executives' incentive compensation packages with the senior risk officers to ensure they do not encourage unnecessary risk taking.  

Click here for the Interim Final Rule, click here for the Treasury's notice to participating financial institutions, and click here for frequently asked questions.