House Financial Services Committee Chairman Barney Frank, D-Mass., announced today the committee is considering legislation that will prohibit bonus payments by companies who have received capital investments under the TARP program and Housing and Economic Recovery Act. Frank said only until investments are repaid in full will bonuses be considered. Furthermore, the legislation will prohibit any compensation arrangements that are “excessive and non-performance based” bonuses for these companies.
While capital investment is outstanding, recipients will be prohibited from:
- Paying any bonus to any employee, regardless of when any agreement to pay a bonus was entered into;
- Paying any compensation that is “unreasonable or excessive,” as defined in standards set by the Treasury Secretary
- Paying or arranging to pay any retention payment, bonus, or other supplemental payment that is not directly based on performance-based standards set by the Treasury Secretary.
The legislation will be “marked-up” in the Financial Services Committee on Tuesday, March 24th, and the full House of Representatives will be able to consider the legislation the following week.