The Office of the Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”) issued a report discussing the Treasury’s 2012 executive compensation decisions for the senior employees of corporations within the scope of the rule. SIGTARP found that the Treasury failed to manage pay at such corporations adequately. Even though the Treasury-created Office of the Special Master for TARP Executive Compensation (“OSM”) set pay guidelines, SIGTARP asserted that the Treasury lacked the robust criteria, policies, and procedures to ensure those guidelines were met.
SIGTARP recommends that each year the Treasury should do the following:
- Reevaluate compensation for employees in the Top 25 from the prior year;
- Develop policies, procedures, and criteria for approving pay in excess of Treasury guidelines;
- Independently analyze whether good cause exists to award a pay raise or cash salary over $500,000; and
- Return to using long-term restricted stock for employees, particularly for senior employees such as CEOs.
Lofchie Comment: The report asserts that executives at the various companies assert undue leverage with respect to their pay by reason of their ability to “leave and go elsewhere” and because of their “fail[ure] to view themselves through the lenses of the U.S. Government.” Statements such as these reflect a very odd, and I think troubling, view of a private citizen’s obligations to the government.
Click here to view report in full (links externally to SIGTARP website).