30.5—Q-5: How does a TARP recipient comply with the requirements under § 30.4 (Q-4) of this part that the compensation committee discuss, evaluate, and review the SEO compensation plans an
At least every six months, the compensation
committee must discuss, evaluate, and review with
the TARP recipient's senior risk officers any
risks (including long-term as well as short-term
risks) that the TARP recipient faces that could
threaten the value of the TARP recipient. The
compensation committee must identify the features
in the TARP recipient's SEO compensation plans
that could lead SEOs to take these risks and the
features in the employee compensation plans that
pose risks to the TARP recipient, including any
features in the SEO compensation plans and the
employee compensation plans that would encourage
behavior focused on short- term
results and not on long-term value creation. The
compensation committed is required to limit these
features to ensure that the SEOs are not
encouraged to take risks that are unnecessary or
excessive and that the TARP recipient is not
unnecessarily exposed to risks.