Ethics

The Empty Executive Compensation Rules

By Ed Brayton

A few weeks ago, the CEOs of Ford and GM offered to work for a salary of $1 a year if they had to take federal bailout funds and I immediately wondered if that included all compensation, like stock options and bonuses, or whether it was just salary. When Obama announced the new rules on executive compensation for companies receiving bailout funds, limiting it to $500,000 a year, I wondered the same thing. Here's the answer: Apparently not.

The plan, announced Wednesday, includes a $500,000 cap on annual compensation for senior executives of companies that receive future "exceptional" government aid. Additional compensation would have to be paid in restricted stock or similar long-term incentive arrangements, which the executives could cash in only after the government is repaid, with interest.

Full post as published by Dispatches from the Culture Wars on February 23, 2009 (boomark / email).