Treasury Department And Sec Address Plans For Reforming Executive Compensation

On June 10, 2009, Treasury Department Secretary Timothy Geithner announced the Obama administration’s initiatives on executive compensation reform.  These initiatives, which are intended to apply not just to financial institutions but to all public companies, consist of several broad-based principles for companies to consider when designing and implementing their executive compensation programs, as well as proposals for Congress to pass “say-on-pay” legislation and legislation giving compensation committees greater independence.  In addition to the Treasury Department’s statement, SEC Chairman Mary Schapiro issued a statement on June 10, identifying several new executive compensation proxy disclosure rules that the SEC is actively considering.  If these reforms move forward, they will likely have a major impact on executive compensation practices at all U.S. public companies.

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