By Cydney Posner

By now, you've all heard about President Obama's new rules limiting compensation of executives of bailout recipients to caps of $500,000, and imposing restrictions on golden parachutes, requiring clawbacks and say-on-pay, and, under the "name and shame" theory, disclosure for luxury perks. (Let's just hope these poor guys were able to save a little from last year's payday of $60 million to tide them over this rough patch). Articles in the WSJ today indicate that the new stinginess has permeated boardrooms beyond the bailout: "Corporate directors and the consultants who advise them say the government's increasingly tough stance -- which began with more limited restrictions in September's bailout legislation -- is shifting discussions inside boardrooms toward limiting pay at companies untouched by the bailout. 'The context of compensation has changed' as a result of the federal bailout, says Arthur C. Martinez, chairman of the board compensation committees at Liz Claiborne Inc. and PepsiCo Inc. and a former chief executive of Sears, Roebuck & Co. Boards realize they can't 'reward behavior that doesn't also reward shareholders,' he adds. 'That's on everybody's lips right now.' " In particular, the focus has been on whether compensation plans encourage excessive risk-taking and clawbacks of inappropriate compensation.

This content is provided for general informational purposes only, and your access or use of the content does not create an attorney-client relationship between you or your organization and Cooley LLP, Cooley (UK) LLP, or any other affiliated practice or entity (collectively referred to as "Cooley"). By accessing this content, you agree that the information provided does not constitute legal or other professional advice. This content is not a substitute for obtaining legal advice from a qualified attorney licensed in your jurisdiction, and you should not act or refrain from acting based on this content. This content may be changed without notice. It is not guaranteed to be complete, correct or up to date, and it may not reflect the most current legal developments. Prior results do not guarantee a similar outcome. Do not send any confidential information to Cooley, as we do not have any duty to keep any information you provide to us confidential. When advising companies, our attorney-client relationship is with the company, not with any individual. This content may have been generated with the assistance of artificial intelligence (Al) in accordance with our Al Principles, may be considered Attorney Advertising and is subject to our legal notices.