Five new pay rules and action to stop huge pay and bonuses
President Obama has said Kenneth Feinberg will oversee pay at companies such as AIG that received 'exceptional' taxpayer bailouts, gaining the name executive pay Czar the Telegraph and Reuters report
The 63-year-old Washington-based lawyer was the attorney who handed out US Government compensation for the 11 September terrorist attacks.
Timothy Geithner, the Treasury Secretary, also laid out five principles to guide the Government’s reforms on compensation.
Five point plan
- Compensation plans should properly measure and reward performance
- Compensation should be structured to account for the time horizon of risks
- Compensation practices should be aligned with sound risk management
- Reexamine whether golden parachutes and supplemental retirement packages align the interests of executives and shareholders
- Promote transparency and accountability in the process of setting compensation
- Compensation committees to be independent from companies’ management. The Securities and Exchange Commission (SEC) to monitor compliance
- Pass say-on-pay laws to give shareholders a non-binding vote on executive compensation.
