Friday, February 13, 2009

Clawback in the Stimulus Bill Revealed

Well here is the details of the clawback that was written into the final deal.

The bill would impose bonus restrictions on senior executive officers and the next 20 highest paid employees at companies that receive more than $500 million from TARP. Companies receiving between $250 million and $500 million would face restrictions on bonuses to their senior executive officers and their next 10 highest-paid workers. The restrictions would apply to the top five employees at companies receiving between $25 million and $250 million.

In other words all of the top traders at the firm will get their bonuses cut even though they probably never traded the CDOs that are choking out these companies. Way to incentive these people so that they stay on at the firm and continue raking in big trading profits. They might actually like their new digs in Dubai after they leave the firm.

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