Highlights of Treasury's Guidance on Executive Compensation Standards for TARP Recipients

Highlights of Treasury's Guidance on Executive Compensation Standards for TARP Recipients

Bracewell &Giuliani
News & Publications

Highlights of Treasury's Guidance on Executive Compensation Standards for TARP Recipients
June 16, 2009

Excerpts:

On June 10, 2009, the U.S. Department of the Treasury ("Treasury"), issued long awaited guidance in the form of an interim rule ("Interim Rule") implementing Section 111 of the Emergency Economic Stabilization Act of 2008 ("EESA"), as amended by the American Recovery and Reinvestment Act of 2009 ("ARRA"). Since the passage of the ARRA on February 17, 2009, there has been confusion as to the application of the executive compensation and corporate governance standards applicable to an entity receiving financial assistance ("TARP recipient") under the Troubled Asset Relief Program ("TARP"). In an attempt to eliminate this confusion, the Interim Rule consolidates all of the executive compensation and corporate governance related provisions applicable to TARP recipients and supersedes all prior guidance on the subject.

Generally, Section 111 of the EESA, as amended, imposes corporate governance and executive compensation requirements on TARP recipients. These requirements apply for so long as any obligation arising from financial assistance under the TARP remains outstanding (the "TARP period"), but do not apply at any time that the Treasury only holds warrants to purchase common stock of the TARP recipient.

In this update we provide highlights of the more significant considerations raised by the Interim Rule related to executive compensation. Shortly following this update, we will provide highlights of the more significant matters related to the Interim Rule with respect to corporate governance.

Read full article: http://www.bracewellgiuliani.com/index.cfm/fa/news.advisory/item/fc872ea1-63c4-4363-aedc-7053bc9f733c/from_rss.cfm

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This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.