The Obama administration is expected to announce on Wednesday that it is dropping its plan to limit salaries at firms receiving government taxpayer money, leaving them subject only to Congress’ limits on bonuses, The WSJ reported late Tuesday, citing people familiar with the matter.
From The WSJ: The move is likely to end months of confusion on Wall Street about separate pay directives from the White House and Congress.
The administration is expected to announce the compromise [tomorrow]. In addition to standing behind the restrictions passed by Congress in February, the administration plans to push for broad changes in compensation practices across the financial-services industry, these people say.
It also will appoint a “pay czar” to monitor the firms receiving the most government aid. Treasury Secretary….Geithner is expected to push all firms — not just those receiving funds from the government’s [TARP] — to more closely tie incentive compensation to long-term performance by paying employees in restricted stock, rather than cash.