Today Nixon Peabody issued a report that noted a few interesting loopholes in the executive compensation rules in the bailout bill. For one, this only applies to companies that sell more than $300 million to the Department of Treasury at auction. Two, it only applies to new contracts. Lastly, it only applies to the top five managers at a public company.
Non-threatening enough. And that’s the problem for Main Street, apparently.
Nixon Peabody warns that Main Street angst against Wall Street will certainly lead to greater restrictions on compensation. There’s already been separate proposals on the topic set forth.
These proposals can include limiting tax deductions for excessive compensation, requiring shareholder review, and/or approval of compensation arrangements, and further limits on severance benefits.
This is covering public companies (many of which do not reside on Wall Street per se), but it sure doesn’t bode well for carried interest, my friends.
In other belt-tightening news, Denise Palmieri advises peHUB readers: “Don’t confuse your ‘worth’ with what you are being paid for the work you do.”