(Updates with more details)
WASHINGTON, Feb 5 (Reuters) - The U.S. Senate voted on Thursday to ban bonuses for top executives at banks or companies receiving taxpayer money from the Treasury Department’s $700 billion bailout fund.
The move came a day after President Barack Obama set a $500,000 cap on executive pay and imposed other restrictions on companies that receive money from the Treasury Department’s Troubled Asset Relief Program, or TARP.
On a voice vote, the Senate approved its measure as an amendment to an unrelated $900 billion economic stimulus package headed toward anticipated passage.
Obama’s rules are not retroactive, but Sen. Christopher Dodd of Connecticut, chairman of the Banking Committee, said his proposal would affect all recipients of TARP money, past and future.
Specifically, Dodd’s amendment would take the following actions involving companies that have received TARP money:
* Ban bonuses for the 25 most highly paid employees.
* Require each to include on its annual proxy statement a “say on pay” proposal allowing shareholders to vote on the company’s executive compensation program.
* Require the Treasury Department to review bonus awards already paid to determine if any were “excessive” and to seek reimbursement if so.
* Give the government the power to claw back any bonus paid to an executive based on reported earnings or other criteria later found to be materially inaccurate.
* Require each board of directors’ compensation committee to be composed only of independent directors.
* Require each board of directors to ban luxury expenditures such as private jets.
* Prohibit compensation plans with incentives for employees to take unnecessary and excessive risks. (Reporting by Thomas Ferraro and Julie Vorman; Editing by Peter Cooney)