Treasury Issues Guidance on TARP Standards for Compensation and Corporate Governance
Much-anticipated Treasury Regulations were published yesterday in the form of “Interim Final Rules” (“IFRs”) and generally are effective immediately (with a few exceptions), providing guidance on the American Recovery and Reinvestment Act of 2009 (the “ARRA”) that became law in mid-February 2009.
The ARRA imposed significant new compensation limitations and corporate governance requirements on financial institutions that receive financial assistance under the Troubled Asset Relief Program (“TARP”). Lane Powell analyzed the ARRA’s impact on TARP recipients in a March 5, 2009, Financial Institutions Update. At only five pages long, the portion of the ARRA that deals with compensation and corporate governance is full of ambiguities and is heavily dependent on the IFRs and other Treasury guidance.