30.11—Q-11: Are TARP recipients required to meet any other standards under the executive compensation and corporate governance standards in section 111 of EESA?
(a)
(e)
3]Approval of compensation payments
to, and compensation structures for, certain
employees of TARP recipients receiving exceptional
financial assistance. For any period during
which a TARP recipient is designated as a TARP
recipient that has received exceptional financial
assistance, the TARP recipient must obtain the
approval by the Special Master of all compensation
payments to, and compensation structures for, SEOs
and most highly compensated employees subject to
paragraph (b) of § 30.10 (Q-10). TARP recipients
that receive exceptional financial assistance must
also receive approval by the
Special Master for all compensation structures for
other employees who are executive officers (as
defined under the Securities and Exchange Act,
Rule 3b-7) or one of the 100 most highly
compensated employees of a TARP recipient
receiving exceptional assistance (or both), who
are not subject to the bonus limitations under §
30.10 (Q-10). For this purpose, compensation
payments and compensation structures may include
awards or other rights to compensation which an
employee has already received but not yet been
paid or, in some instances, fully accrued.
Accordingly, the Special Master has the authority
to require that such compensation payments or
compensation structures be altered to meet the
standards set forth in § 30.16 (Q-16). However,
this approval requirement is not applicable to
payments that are not subject to paragraph (a) of
§ 30.10 (Q-10) due to the application of paragraph
(e)(2) of § 30.10 (Q-10) or the effective date
provisions of § 30.17 (Q-17), though the Special
Master will take such payments into account in
reviewing the compensation structure and amounts
payable, as applicable, that are subject to
review. Notwithstanding any of the foregoing,
approval is not required with respect to an
employee not subject to the bonus payment
limitations to the extent that the employee's
annual compensation, as modified in § 30.16 (Q-16)
to include certain deferred compensation and
pension accruals but to disregard any grant of
long-term restricted stock, is limited to $500,000
or less, and any further compensation is provided
in the form of long-term restricted stock. For
details, see § 30.16 (Q-16).
(b) Perquisite disclosure—
(1) General rule.
TARP recipients must
annually disclose during the TARP period any
perquisite whose total value for the TARP
recipient's fiscal year exceeds $25,000 for each
of the SEOs and most highly compensated employees
that are subject to paragraph (a) of § 30.10
(Q-10). TARP recipients must provide a narrative
description of the amount and nature of these
perquisites, the recipient of these perquisites,
and a justification for offering these perquisites
(including a justification for offering the
perquisite, and not only for offering the
perquisite with a value that exceeds $25,000).
Such disclosure must be provided within 120 days
of the completion of a fiscal year any part of
which is a TARP period.
(2) Location.
A TARP recipient
must provide this disclosure to Treasury and to
its primary regulatory agency.
(c)
Compensation consultant
disclosure —(1) General rule. The
compensation committee of the TARP recipient must
provide annually a narrative description of
whether the TARP recipient, the board of directors
of the TARP recipient, or the compensation
committee has engaged a compensation consultant;
and all types of services, including
non-compensation related services, the
compensation consultant or any of its affiliates
has provided to the TARP recipient, the board, or
the compensation committee during the past three
years, including any “benchmarking” or comparisons
employed to identify certain percentile levels of
compensation (for example, entities used for
benchmarking and a justification for using these
entities and the lowest percentile level proposed
for compensation). Such disclosure must be
provided within 120 days of the completion of a
fiscal year any part of which is a TARP
period.
(2)
Application to TARP recipients
not required to maintain compensation
committees. For those TARP recipients not
required to establish and maintain compensation
committees under § 30.4(c) (Q-4), the board of
directors must provide the disclosure under §
30.4(c)(1).
(3) Location.
A TARP recipient
must provide this disclosure to Treasury and to
its primary regulatory agency.
(d) Prohibition on gross-ups.
Except as explicitly permitted under this part,
TARP recipients are prohibited from providing
(formally or informally) gross-ups to any of the
SEOs and next twenty most highly compensated
employees during the TARP period. For this
purpose, providing a gross-up includes providing a
right to a payment of such a gross-up at a future
date, for example a date after the TARP
period.