Exec Bonuses Would Shrink Under Stimulus Plan

Buried deep within the $787 billion economic stimulus package is a provision that would impose harsher restrictions on executive bonuses at financial institutions than those recently proposed by the Treasury Department.

The provision -- which the New York Times reported was inserted by Senate Democrats over the objections of the Obama administration -- is aimed at companies that have received financial bailout funds. It would prohibit cash bonuses and almost all other incentive compensation for the five most senior officers and the 20 highest-paid executives at large companies that receive money under the Treasury’s Troubled Asset Relief Program, which has been criticized for a lack of oversight.

The biggest difference between the provision and the Treasury rules is that it would apply to any company that either has received money or will receive money in the future under the TARP. By contrast, the plan announced by the Treasury would apply only to companies that receive federal money in the future.