Obama's Executive Pay Limits Have Loopholes: Report
President Barack Obama's crackdown on Wall Street pay contains loopholes, and may have limited impact in restraining compensation, the Wall Street Journal said, citing executive-pay consultants and management attorneys.
Some compensation professionals are already pointing out potential holes in the rules, including tactics such as changing executives' titles or rearranging pay packages, the paper said.
Obama set a $500,000 annual cap on executive pay and imposed other restrictions on companies that receive money from the Treasury Department's Troubled Asset Relief Program, or TARP.
The Journal said just as past attempts by the government to restrict executive pay largely backfired, the new curbs may also have unintended consequences, citing its sources.
Some critics suggested that the restrictions be retroactively applied to companies that already have received federal bailout cash, the paper said.
The critics noted that the most stringent restrictions likely would affect only a few firms and others could avoid some of the curbs by putting extra pay to a shareholder vote.
Others believe the plan does not limit total compensation because it allows companies to boost awards of restricted stock, the paper said.
The Senate voted on Thursday to ban bonuses for top executives at banks or companies receiving taxpayer money from the Treasury Department's $700 billion bailout fund.
Reporting by Ajay Kamalakaran in Bangalore; Editing by Valerie Lee