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January 09, 2009 at 05:20 PM
Rep. Barney Frank has introduced a bailout program overhaul bill that could affect executive compensation arrangements at companies seeking government help.
Frank, D-Mass., chairman of the House Financial Services Committee, wants the companies to eliminate any bonuses or incentives for the 25 most highly compensated employees, toss out any compensation plan that would encourage the manipulation of earnings, and divest private aircraft or private aircraft leases.
Business groups have criticized a provision that would apply the executive comp and aircraft restrictions to companies already participating in federal rescue programs.
“If they don’t like it, then they can give the money back,” Frank said at a briefing for reporters.
Frank introduced his bill 2 days after American International Group Inc., New York, announced plans to change its approach to terminating 14 executive comp plans.
AIG originally had announced that it would simply shut down the plans and pay all of the cash in the plans to the agents, rank-and-file employees, and executives who had participated.
Some valued agents and employees had been leaving AIG in an effort to cash out their plans, AIG said.
AIG now says it will exclude former agents and employee from the account value payouts, and that it also will exclude current top executives.
The new AIG executive comp plan approach was discussed earlier this week by Rep. Paul Kanjorski, D-Pa., chairman of the House Financial Services Committee’s Capital Markets Subcommittee, and Rep. Joseph Crowley, D-N.Y., a member of the House Ways and Means Committee.
