Elise had an interesting observation in the comments yesterday: Congress has restricted the compensation of AIG once already, since compensation limits for any recipient of TARP funds were inserted into the stimulus bill, and AIG has received TARP funds.
As far as I know, AIG has followed the letter of the compensation requirements. But will the administration follow them? The compensation restrictions preclude TARP recipients from "paying or accruing any bonus, retention award, or incentive compensation during the period in which any obligation arising from financial assistance provided under the TARP remains outstanding." But the restrictions also say that this clause
shall not be construed to prohibit any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009, as such valid employment contracts are determined by the Secretary or the designee of the Secretary.
My understanding is that AIG contracts in question were all executed before February 11. No one in the administration is claiming they aren't valid (even if the administration is claiming the contracts are an outrage). I suppose that doesn't prevent Geithner or a Geithner-designee from suddenly claiming they aren't valid in the future, but that would be pretty mendacious. At the very least this is evidence that Congress intended to avoid retrospective tinkering with compensation.
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