Stimulus Package Imposes Additional Executive Compensation Restrictions For TARP Recipients

On February 17, 2009, President Obama signed the stimulus bill formally titled the American Recovery and Reinvestment Act of 2009 ("ARRA"). ARRA includes new executive compensation restrictions that apply to institutions that have received or will receive financial assistance under the Troubled Assets Relief Program ("TARP"). TARP is the designation for the overall program under which the U.S. Treasury Department ("Treasury") originally was to acquire billions of dollars in troubled assets currently authorized by the Emergency Economic Stabilization Act of 2008, which was passed on October 3, 2008 ("EESA"). The Treasury abandoned its original plan to buy troubled assets from financial institutions and used TARP money to make direct equity investments in financial institutions.