The Interim Final Rules regarding Executive Compensation for TARP recipients provide a number of corporate governance standards for Compensation Committees. While these standards currently only apply to financial institutions that have outstanding TARP investments, many of the standards are likely to be considered best practices for the compensation committees of all companies.
TARP recipients generally are required to have a compensation committee consisting solely of independent directors (with independence determined by reference to the federal securities laws). (Private TARP recipients who received a TARP investment of less than $25 million are not required to have a compensation committee, in which case the full Board of Directors is required to take the actions detailed below).
