The House Financial Services Committee approved legislation Thursday to put limits on executive compensation at any company receiving Troubled Asset Relief Program capital injections.
The bill, which the full House could take up next week, would strike a provision from the stimulus law that kept intact compensation contracts entered before Feb. 11. It would also ban unreasonable compensation, along with any bonuses not based on performance.
The bill would require the Treasury secretary to define appropriate compensation parameters along with the head of the Tarp congressional oversight panel and the agencies that are members of the Federal Financial Institutions Examination Council.
The measure is one of several to pop up in the House in response to the $165 million of bonuses paid to American International Group Inc. employees. Its outlook is unclear, since similar action in the Senate has slowed.