In a noble and unsung effort to bail out lawyers and compensation consultants, last week the Treasury Department announced 3 separate sets of executive compensation rules under the bailout bill.
The first set of rules, which I posted about yesterday, kicks in when banks get a direct capital infusion (in what Treasury’s now calling the CPP, or Capital Purchase Program).
A second set of rules will hit if (when?) Neel Kashkari (that loyal Robin to Mr Paulson’s Batman) starts buying mortgage-related assets from banks using some kind of auction process. They're calling this program the TAAP, which I hope doesn't piss off the Texas Association of Addiction Professionals.
Then there's a third set of rules for direct purchases of really crappy assets. This is the Direct Purchase Program, or DPP, which also includes the PSSFI, or Program for Systematically Significant Failing Institutions. I've put these aside until I shed the carbohydrate brain fog from the jumbo bag of potato chips I swallowed to get through the first two.
Some banks could end up being covered by more than one of these at a time. And the IRS is spewing out lots of new compensation rules for the bailout as well.
Thoroughly confused? Try this handy chart, courtesy of Cleary Gottlieb, where all the lawyers really are above average. Still confused? Feel like you need an attorney or consultant to explain all these rules? Wonderful! Spending during a recession is so patriotic.
Speaking of Batman and Robin, in the 1997 film of that name, the heroes fought a villain named “Mr. Freeze,” played by Arnold Schwarzenegger. Turns out the guy's first name was Credit.
Note: This post has been corrected. I made a mistake, but I'm not going to tell you what it was.
Posts
