On February 4, 2009, the U.S. Department of the Treasury announced that it was issuing a new set of guidelines or restrictions on executive pay for financial institutions that are receiving government assistance to address their current financial crisis. According to the Treasury, these measures are designed to ensure that public funds are directed only toward the public interest in strengthening our economy by stabilizing our financial system and not toward inappropriate private gain. The chief executive officers of all companies that have to this point received or do receive any form of government assistance must provide certification that the companies have strictly complied with statutory, Treasury, and contractual executive compensation restrictions.

Among other things, the restrictions include provisions that: (a) place conditions on executive compensation for financial institutions receiving recovery assistance, including limiting senior executive total annual compensation; (b) require compensation to senior executives in excess of specified limits be in restricted stock that vests when the government has been repaid with interest; and (c) call for long-term regulatory reforms for compensation strategies at financial institutions that align such strategies with proper risk management and long-term value.

A related press release from the Treasury is available at:

http://www.ustreas.gov/press/releases/tg15.htm