12 2 STA T .37 77 PUBLIC LA W 11 0– 3 4 3 —O CT. 3 , 200 8(A)lim i tsonc om pe ns a tion t h ate x cl ud e incenti v es f o r senior executive officers of a financial institution to ta k e unnecessar y and excessive risks that threaten the value of the financial institution durin g the period that the S ec - retary holds an e q uity or de b t position in the financial institution
( B ) a provision for the recovery by the financial institu- tion of any bonus or incentive compensation paid to a senior executive officer based on statements of earnings , gains, or other criteria that are later proven to be materi- ally inaccurate; and ( C ) a prohibition on the financial institution making any golden parachute payment to its senior executive officer during the period that the Secretary holds an equity or debt position in the financial institution . ( 3 ) DEFIN I T I O N. —F or purposes of this section, the term ‘ ‘senior executive officer ’ ’ means an individual w hoisoneof the top 5 highly paid executives of a public company, whose compensation is required to be disclosed pursuant to the Securi- ties E xchange Act of 19 3 4 , and any regulations issued there- under, and non-public company counterparts. (c) A UC TION P U R C HAS ES.— W here the Secretary determines that the purposes of this Act are best met through auction purchases of troubled assets, and only where such purchases per financial institution in the aggregate exceed $ 3 0 0,000,000 (including direct purchases), the Secretary shall prohibit, for such financial institu- tion, any new employment contract with a senior executive officer that provides a golden parachute in the event of an involuntary termination, bankruptcy filing, insolvency, or receivership. T he Sec- retary shall issue guidance to carry out this paragraph not later than 2 months after the date of enactment of this Act, and such guidance shall be effective upon issuance. (d) SUNSET.—The provisions of subsection (c) shall apply only to arrangements entered into during the period during which the authorities under section 101(a) are in effect, as determined under section 120. SEC.1 1 2 .C O O RDINAT ION W IT HF OREI G NA U THORITIES AND CENTRA LB AN K S. The Secretary shall coordinate, as appropriate, with foreign financial authorities and central banks to work toward the establishment of similar programs by such authorities and central banks. To the extent that such foreign financial authorities or banks hold troubled assets as a result of extending financing to financial institutions that have failed or defaulted on such financing, such troubled assets qualify for purchase under section 101. SEC. 11 3 . M INIMI Z ATION OF LONG - TERM COSTS AND MA X IMIZATION OF BENEFITS FOR TAX P A Y ERS. (a) L ON G -TER M COSTS AN D BENEFITS.— (1) M INIMI Z ING NEGATI V EIM P ACT.—The Secretary shall use the authority under this Act in a manner that will minimi z e any potential long-term negative impact on the taxpayer, taking into account the direct outlays, potential long-term returns on assets purchased, and the overall economic benefits of the program, including economic benefits due to improvements in economic activity and the availability of credit, the impact 12USC5 22 3. 12 USC 5222. Guidance . D ead l ine. Ef fec t i v e date. E mp l oy ment. Cont r act s . P ro h i b ition.
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