Corporate Governance

Executive Compensation and Federal Preemption of Delaware Law: Proposed Governance Provisions in the Draft Bailout Bill (Part 3)

By J. Robert Brown

We noted yesterday that the draft of the House Bill on the Bailout Bill included limitations on executive compensation and say on pay.  The version of the Senate bill posted on the Senate Banking Committee's web site includes limitations on executive compensation but not say on pay. 

SEC. 17. EXECUTIVE COMPENSATION.

The Secretary shall require that all entities seeking to sell assets through a program established under this
Act meet appropriate standards for executive compensation and shareholder disclosure in order to be eligible,
which standards shall include?

(1) limits on compensation to exclude incentives for executives to take risks that the Secretary deems
to be inappropriate or excessive;
(2) a claw-back provision for incentive compensation paid to a senior executive based on earn6
ings, gains, or other criteria that are later proven to be inaccurate; and
(3) such limitations on the entity paying severance compensation to its senior executives as are determined to be appropriate in the public interest in light of the assistance being given to the entity.

Full post as published by The Race to the Bottom on September 23, 2008 (boomark / email).