Client Alert
Impact Of The Emergency Economic Stabilization Act Of 2008 On Executive Compensation Design
October 7, 2008
Because of the rapidly changing conditions in the financial markets, we have established this special series of Client Alerts to advise you of the newest economic and legal developments and their wide-ranging business implications.
Financial institutions electing to sell troubled assets through the federal bailout program enacted last week as part of the Emergency Economic Stabilization Act of 2008 ("EESA") will be forced to comply with certain EESA executive compensation restrictions as one of the costs of participating in the program. The EESA executive compensation restrictions are noteworthy in part because they restrict certain elements of executive compensation design, as opposed to just imposing federal tax consequences for certain types of compensation. Although the EESA executive compensation restrictions technically only apply to affected financial institutions, given the current environment of intense investor and political scrutiny of executive compensation practices, the restrictions can be expected to have some "trickle-down" effect on executive compensation practices for many companies.
Click here to read our client alert regarding the EESA executive compensation requirements.
Contact Information
If you have any questions regarding the EESA executive compensation requirements, please contact the Womble Carlyle attorney with whom you usually work or one of our Employee Benefits or Corporate and Securities attorneys.
Womble Carlyle client alerts are intended to provide general information about significant legal developments and should not be construed as legal advice on any specific facts and circumstances, nor should they be construed as advertisements for legal services.
IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice within this client alert is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in a client alert.
