Corporate Securities Law Blog

The Emergency Economic Stabilization Act of 2008 ("EESA"), which President Bush signed into law on October 3, 2008, created the Troubled Asset Relief Program ("TARP") under which the United States Treasury (the "Treasury") is generally authorized to purchase troubled assets from certain financial institutions.  EESA establishes different sets of restrictions for financial institutions based on whether they sell troubled assets directly to the Treasury or whether they sell troubled assets through an auction process.  EESA also modified certain tax code provisions that placed limitations on the deductibility of compensation paid to certain executives.  This blog provides a brief overview of EESA provisions that address the executive compensation practices of financial institutions participating in TARP.

Governor Schwarzenegger today vetoed AB2944. The bill would have provided that directors may consider the interests of specific corporate constituencies in addition to the shareholders. For a more detailed description of this legislation, see our earlier article here. In his veto message to the California State Assembly, the Governor noted that        "[w]hile this bill proposes a new model of corporate governance consisting of a package of many intriguing concepts, it is just that; a package of concepts that could produce unknown ramifications and the need for which have not been fully demonstrated." For further information, please contact Peter M. Menard at (213) 617-5483.