Executive Compensation Rules Under the Emergency Economic Stabilization Act of 2008

My colleagues in the Employment Practice Group at Davis Polk & Wardwell have prepared a memorandum discussing the executive compensation requirements applicable under each of the Capital Purchase Program, Troubled Asset Auction Program and Program for Systemically Significant Failing Institutions implemented under Emergency Economic Stabilization Act of 2008 (“EESA”). The memo also briefly summarizes the basic purposes of and authorities granted to the U.S. Department of the Treasury under EESA, and includes a table that presents a summary comparison of pre-EESA rules and new rules applicable to EESA program participants, with respect to (i) golden parachutes under Section 280G of the Internal Revenue Code (the “Code”), (ii) deduction limits under Section 162(m) of the Code, (iii) incentive compensation and risk aversion and (iv) clawbacks of incentive compensation.

The memorandum is available here.