Senate Banking Committee Chairman Christopher Dodd has given bankers a temporary reprieve on the compensation rules he helped write in the recently enacted economic stimulus package.
The Connecticut Democrat's rules put compensation restrictions on executives at banking companies that accepted government funds, including a ban on most bonuses for the highest-paid individuals.
The Treasury Department has a year to write the regulations that would implement the restrictions, but in a letter dated Feb. 20, Sen. Dodd asked the Securities and Exchange Commission to wait until guidance is issued before enforcing a requirement that the chief executive officer and chief financial officer provide written certification that they have complied with the law.
"As this certification requirement relates to compliance with executive compensation and corporate governance standards that have yet to be established by the secretary of the Treasury, it is my view that this requirement is not yet effective," Sen. Dodd wrote in the letter to SEC Chairman Mary Schapiro.
Sen. Dodd also asked for some leeway in implementing a proposal that would give shareholders a nonbinding vote on executive pay plans.
The stimulus was signed into law Feb. 17. Sen. Dodd wrote that the restrictions should apply to proxy statements filed afterward.