WASHINGTON, Feb. 14 (UPI) -- A last-minute addition to the economic stimulus bill approved by the U.S. Congress restricts bonuses at bailed-out firms, observers say.
The pay limits bar any company receiving taxpayer bailout funds from paying bankers bonuses equal to more than one-third of their total annual compensation, which firms say could severely crimp pay packages, The Wall Street Journal reported Saturday.
That's because at big banks top officials commonly get relatively modest salaries but often reap huge bonuses. The language was inserted by Sen. Christopher Dodd, D-Conn., reportedly over the opposition of the Obama administration, and is causing consternation on Wall Street because it reaches past the levels of top executives into high-earning brokers and other workers, the Journal said.
"The decisions of certain Wall Street executives to enrich themselves at the expense of taxpayers have seriously undermined public confidence in efforts to stabilize the economy," Dodd said in a statement.
The Washington publication The Hill said the restriction eases burdens on small firms receiving less than $25 million in aid, for whom it applies only to the top official. But for banks receiving more than $500 million in help, the provision applies to the 25 most senior officials.