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This document has been submitted to the Office of the Federal Register (OFR) for publication and is scheduled for Federal Register publication on June 15, 2009. The document may vary slightly from the published document if minor editorial changes have been made during the OFR review process. The document published in the Federal Register is the official document.
Billing Code 4810-25-PDEPARTMENT OF THE TREASURY31 CFR Part 30
RIN 1505-AC09TARP STANDARDS FOR COMPENSATION AND CORPORATEGOVERNANCEAGENCY:
Domestic Finance, Treasury.
ACTION
: Interim final rule.
SUMMARY
: This interim final rule, promulgated pursuant to sections 101(a)(1),101(c)(5), and 111 of the Emergency Economic Stabilization Act of 2008 (EESA), asamended by the American Recovery and Reinvestment Act of 2009 (ARRA), providesguidance on the executive compensation and corporate governance provisions of EESAthat apply to entities that receive financial assistance under the Troubled Asset Relief Program (TARP). Section 111 of EESA requires entities receiving financial assistance(TARP recipients) from the Department of the Treasury (Treasury) to meet appropriatestandards for executive compensation and corporate governance. This interim final ruleincludes standards for TARP recipients that implement the provisions of section 111 of
EESA, as well as certain additional standards adopted pursuant to the authority grantedthe Treasury under section 111(b)(2) to promulgate such additional standards.
DATES
: Effective Date: These regulations are effective on [
INSERT DATE OFPUBLICATION IN THE FEDERAL REGISTER
]. Comment due date: [
INSERTDATE THAT IS SIXTY DAYS AFTER DATE OF PUBLICATION IN THEFEDERAL REGISTER
]
.
ADDRESSES:
Treasury invites comments on the topics addressed in this interim finalrule. Comments may be submitted to Treasury by any of the following methods: Submitelectronic comments through the federal government e-rulemakingportal, www.regulations.gov or by emailto executivecompensationcomments@do.treas.gov or send paper comments in triplicateto Executive Compensation Comments, Office of Financial Institutions Policy, Room1418, Department of the Treasury, 1500 Pennsylvania Avenue, NW, Washington, DC20220.In general, Treasury will post all comments towww.regulations.govwithoutchange, including any business or personal information provided, such as names,addresses, e-mail addresses, or telephone numbers. Treasury will also make suchcomments available for public inspection and copying in Treasury’s Library, Room 1428,Department of the Treasury, 1500 Pennsylvania Avenue, NW, Washington, DC 20220,on official business days between the hours of 10:00 a.m. and 5:00 p.m. Eastern Time.You can make an appointment to inspect comments by telephoning (202) 622-0990. Allcomments, including attachments and other supporting materials, received are part of the2
public record and subject to public disclosure. You should submit only information thatyou wish to make available publicly.
FOR FURTHER INFORMATION CONTACT:
For further information regardingthis interim final rule contact the Office of Domestic Finance, Treasury, at (202) 927-6618.
SUPPLEMENTARY INFORMATION:
Executive Summary:This Interim Final Rule sets forth the following standards, which generally applyto all TARP recipients in the programs under the TARP, subject to certain exceptions forTARP recipients that do not hold outstanding obligations: (1) limits on compensationthat exclude incentives for senior executive officers (SEOs) to take unnecessary andexcessive risks that threaten the value of the TARP recipient; (2) provision for therecovery of any bonus, retention award, or incentive compensation paid to a SEO or thenext twenty most highly compensated employees based on materially inaccuratestatements of earnings, revenues, gains, or other criteria; (3) prohibition on making anygolden parachute payment to a SEO or any of the next five most highly compensatedemployees; (4) prohibition on the payment or accrual of bonus, retention award, orincentive compensation to SEOs or certain highly compensated employees, subject tocertain exceptions for payments made in the form of restricted stock; (5) prohibition onemployee compensation plans that would encourage manipulation of earnings reported bythe TARP recipient to enhance an employee’s compensation; (6) establishment of acompensation committee of independent directors to meet semi-annually to reviewemployee compensation plans and the risks posed by these plans to the TARP recipient;3
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