Loopholes riddle Obama’s comp-limits plan
President Obama’s limits on compensation for executives with firms about to receive federal bailout money might be riddled with loopholes.
President Obama’s limits on compensation for executives with firms about to receive federal bailout money might be riddled with loopholes, according to executive-compensation consultants.
Senior executives might be able to get paid more than the $500,000 cap set by the president on Wednesday by changing their titles or rearranging pay packages, experts told The Wall Street Journal.
For example, companies can boost restricted stock awards so an executives’ total pay is even higher than before.
In addition, stock options whose value has declined might be repriced to make them more valuable for executives, and new deferred-compensation or pension arrangements may also be arranged, the pay consultants said.
The $500,000 limit on annual compensation for senior executives applies to companies that will receive future “exceptional” government aid, under the president’s order.
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