| |||||||||||||||||||||||||
| |||||||||||||||||||||||||
 With all of the talk about Wall Street's cash bonuses, corporate jet purchases and office decorating, there's no question that the Senate, which just gave President Obama access to the second tranche of the Troubled Asset Relief Program and confirmed Timothy Geithner as Treasury secretary, will place heavier restrictions on executive compensation. We spoke with Paul Hastings Janofsky & Walker LLP partner Mark Poerio about what sort of restrictions executives may see on compensation and perks under stricter TARP oversight and Rep. Barney Frank's proposed bill.
Poerio believes there will be a greater emphasis on the disclosure of perks.
"You just can't justify a $1,200 waste basket," Poerio said, referring to former Merrill Lynch & Co. CEO John Thain's expenditure on an office decorating spree. "We have already seen a fair amount of executive compensation disclosure, but I think SEC disclosure rules will require more details to legitimize executive compensation and perks." The SEC overhauled its rules three years ago to include details of executive compensation and perks from salary to chauffeur-driven cars, but there are still some loopholes, according to Poerio. "While companies have been disclosing what, they have not been disclosing why these services have been provided." he said. "Plus, in terms of structuring awards, there is also the question of performance over multiple periods." One plan to address performance over time is Barney Frank's proposed claw-back provisions that set aside portions of bonuses for later years and allows any bonuses or compensation to be recouped if an executive leaves, engages in any manipulation of earnings or inaccurate statements or may have partaken in risky behavior that harms the company. "There will also be a shift away from cash bonuses and an emphasis on more incentives earned over a number of years," Poerio said. Another proposed way that the new administration could deal with executive compensation disclosure will be through so-called "say on pay," an idea supported by SEC head Mary Schapiro, which gives shareholders a nonbinding vote on executive pay. Both ideas are a step in the right direction and would make executive compensation and perks more transparent, according to Poerio. "At the moment many companies are waiting on the sidelines seeing what will pass," Poerio explained. - Maria Woehr Categories Deal Video
    Community
 Elsewhere on The Deal.comDealwatch
The Deal MagazineCorporate Dealmaker
The Deal VideoCategories
Blog roll
Archives
| |||||||||||||||||||||||||
|
|
|
|
|
©Copyright 2009, The Deal, LLC. All rights reserved. Please send all technical questions, comments or concerns to the Webmaster.
