The Pay for Performance Act of 2009 passed the House of Representatives last Wednesday, giving the Treasury Department the power to define what constitutes “unreasonable and excessive” compensation at companies that have received federal bailout money. In a move that has been cheered by the U.S. Travel Association and other observers, Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, has gone on the record to say that the bill is aimed at controlling compensation, not meetings or performance-based incentives.
Frank was asked for the clarification on the House floor by Rep. Shelly Berkley, D-Nev., who explained her request with this statement: “Over the past few months, legitimate business travel for meetings, events, and incentive programs has dramatically decreased across the country, particularly in my district of Las Vegas. The decline is due in part to the state of our economy but also to the perception that Washington is seeking to limit these legitimate business practices. This negative perception has created an environment where every business in the United States is beginning to question whether or not they should hold a meeting, event, or incentive travel program.”
In his reply, Frank said that the bill “deals only with compensation, not with travel. Any incentive that was performance-based would be fully allowed.”
The bill must now pass the Senate.