July 2, 2009
Among the executive compensation provisions of the United States Treasury Department’s Capital Purchase Program (CPP) under the Emergency Economic Stabilization Act of 2008 is the mandate that a participating institution’s compensation committee review its incentive compensation arrangements with the senior risk officer to determine whether those arrangements encourage officers to take unnecessary and excessive risks that threaten the value of the institution. Publicly held institutions are required to disclose the results of this analysis in the Compensation Discussion and Analysis (CD&A) section of their annual proxy statement.